Allahabad High Court
Commissioner Of Income Tax -Ii vs M/S Euro Footwear Ltd. on 8 December, 2015
Bench: Tarun Agarwala, Vinod Kumar Misra
HIGH COURT OF JUDICATURE AT ALLAHABAD
?A.F.R.
Court No. - 37
Case :- INCOME TAX APPEAL DEFECTIVE No. - 114 of 2012
Appellant :- Commissioner Of Income Tax -Ii
Respondent :- M/S Euro Footwear Ltd.
Counsel for Appellant :- Shambhu Chopra
Counsel for Respondent :- A. Bansal,S.K. Garg
and
Case :- INCOME TAX APPEAL No. - 799 of 2012
Appellant :- Commissioner Of Income Tax -Ii
Respondent :- M/S Euro Footwear Ltd.
Counsel for Appellant :- Shambhu Chopra
Hon'ble Tarun Agarwala,J.
Hon'ble Vinod Kumar Misra,J.
Both the appeals involve the same question of law and are being decided together. For facility, the facts in the appeal of the assessment year 2003-04 is being taken into consideration.
For the assessment year 2003-04, the assessee claimed deduction under Section 80 HHC and 80IB. The assessee claimed 30 percent of the gross total income under Section 80 IB on the income derived from Duty Entitlement Pass Book Scheme (DEPB) as well as on Duty Draw Back Scheme etc. The Assessing Officer held that the income derived from DEPB and other export incentives are not the income derived from an industrial undertaking. The
Assessing Officer allowed the deductions under Section 80 IB after deleting duty draw back and export incentives. The Assessing Officer was also of the opinion that for claiming deductions on duty draw back etc, the Assessee had furnished inaccurate particulars and therefore, initiated penalty proceedings under Sections 271 (1) (c) of the Act and considered the decision of the Supreme Court rendered in Liberty India Vs. CIT (2009) 317 ITR 218 and levied penalty under Section 271 (1) (c) amounting to Rs.20,20,000/-.
The assessee, being aggrieved, filed an appeal before the CIT Appeals, which was allowed and the order of penalty was set aside. The department, being aggrieved, filed a second appeal, which was rejected.
The department has now filed the present appeal under Section 260 A of the Tax Act contending that a substantial question of law arises and that the tribunal committed a manifest error in deleting the penalty imposed under Section 271 (1) (c) of the Act.
Having heard Sri Ashok Kumar, the learned counsel for the appellant and Sri Ashish Bansal, the learned counsel for the respondents, we find that the assessee had disclosed all the income and claimed certain deductions, which were disallowed. The mere fact that certain deductions were disallowed, does not mean that the assessee had furnished inaccurate particulars or had concealed the particulars of his income. The words "inaccurate particulars" means details supplied in the return, which was not accurate or which was not exact or correct or which was not according to the truth or which was erroneous.
In the instant case, there is no finding of the Assessing Officer that the details supplied by the assessee in its return was inaccurate, incorrect, erroneous or false. In the absence of any finding of this nature, the question of imposing penalty under Section 271 (1) (c) on the mere making of the claim could not arise nor such imposition of penalty would be sustainable in law.
In our opinion, a mere making of the claim for certain deductions by itself would not amount to
furnishing inaccurate particulars regarding the income of the assessee.
In Commissioner of Income Tax Vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158, the Supreme Court held that the mere making of the claim, which is not sustainable in law, by itself, would not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made by the assessee in the return, would not amount to inaccurate particulars.
Similar view was taken by this Court in Commissioner of Income Tax Vs. M/S Arvidn Footwear Pvt. Ltd. Dated 11.04.2012 in Income Tax Appeal No. 507 of 2012 as well as Income Tax Appeal No. 340 of 2006, the Commissioner of Income Tax-II, Kanpur Vs. M/S J.K., Syntehtics Ltd. decided on 04.12.2015.
We also find that the Supreme Court in the Case of Liberty India (supra) has only clarified the law, which was subsequent to the filing of the return of the assessee.
In the light of the aforesaid, we are of the opinion that the order of the tribunal does not suffer from
any error of law. No substantial question of law arises.
Both the appeals fail and are hereby dismissed, accordingly.
Order Date :- 8.12.2015
YK
(Vinod Kumar Misra, J.) (Tarun Agarwala, J.)
