2008 (5) TMI 292

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....ances under which penalty come to be imposed on the assessee are as follows:- The assessee is a company engaged in the business as a tour operator. Under the provisions of section 80HHD of the Act, an 1najan company engaged in the business of tour operator, approved by the prescribed authority, namely, Director General, Directorate General of Tourism, Government of India shall be entitled to certain percentage of the deduction of the profits derived by him from services provided to foreign tourists. For the assessment year 1997-98, the assessee filed its return of income on 27-10-1997. It claimed deduction under section 80HHD of the Act of a sum of Rs. 47,59,148. The assessee in accordance with the condition laid down under section 80HHD....

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.... 29-4-1998. Later on vide letter dated 7-5-1999 prescribed authority granted approval from 2-7-1997 modifying the grant of approval given earlier from 20-5-1998. It was in the aforesaid circumstances, in course of assessment proceedings, when the question of allowing deduction under section 80HHD came up for consideration, the assessee through his AR by a letter dated 27-3-2000 submitted before the Assessing Officer as follows:- "In respect of our assessees for a deduction claim under section 80HHD of Rs. 47,59,148, we have been instructed by our client to state that our client had applied for approval from the prescribed authority being the Government of India. Department of Tourism as approved tour operator and in terms of the discussi....

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....n that view of the matter, the Assessing Officer imposed penalty on the assessee. 6. On appeal by the assessee, learned CIT(A) confirmed the order of the Assessing Officer. According to learned CIT(A), the assessee did not withdraw the claim for exemption under section 80HHD even prior to deduction by the Assessing Officer in course of assessment proceedings. In this regard, learned CIT(A) noticed that on 24-3-2000 in course of assessment proceedings before the Assessing Officer, the Assessing Officer noticed that the approval was only with effect from 2-7-1997; and when this was pointed out, the assessee filed a letter dated 27-3-2000 withdrawing the claim for deduction under section 80HHD. Thus, learned CIT(A) concluded that the withdr....