Income Tax Appellate Tribunal - AhmedabadNarmada Chematur Petrochemicals ... vs Department Of Income Tax on 10 August, 2007IN THE INCOME TAX APPELLATE TRIBUNAL : A' BENCH : AHMEDABAD

(Before Hon'ble Shri G.D. Agrawal, Vice-President(AZ) & Hon'ble Shri T.K. Sharma, J.M.)

                            I.T.A. Nos. 3991 & 3992/AHD./2007
                          Assessment Year : 2001-2002 & 2002-2003

     Deputy Commissioner of Income Tax, -vs. M/s. Narmada Chematur Petrochemicals Ltd.
     Bharuch Circle, Bharuch                 Bharuch, Gujarat (PAN : AAACN 6804 E)
           (Appellant)                                         (Respondent)
                                       &
                                      C.O. Nos. 4 & 5/AHD/2008
                         (arising out of ITA Nos. 3991 & 3992/AHD/2007)
                              Assessment Year : 2001-2002 & 2002-2003

      M/s. Narmada Chematur Petrochemicals Ltd. -vs.- Deputy Commissioner of Income Tax,
      Baruch, Gujarat                                 Bharuch Circle, Bharuch.
              (Cross Objector)                                        (Respondent)

                Assessee by        :    Shri Sanjay R. Shah
                Department by      :    Shri Govind Singhal, Sr. D.R.
                                        ORDERPer Bench :These appeals filed by the Revenue and Cross Objections by the assessee are against the
common order dated 10.08.2007 of Learned Commissioner of Income Tax(Appeals)-VI, Baroda
cancelling the penalty of Rs.8,02,210/- and Rs.65,675/- levied by the A.O. undersection
271(1)(c)of the Income Tax Act for the assessment years 2001-02 and 2002-03 respectively.2.     Briefly stated the facts are that for both the assessment years, the Assessing Officer
levied the penalty undersection 271(1)(c)of the Income Tax Act on the ground that the assessee
has claimed more deduction undersection 80HHCthan it is allowable. On appeal, in the
impugned order, the Learned Commissioner of Income Tax(Appeals) cancelled the penalty on
the ground that the assessee has adopted a view based on the decisions obtained at that point of
time, whereas the Assessing Officer and the Learned Commissioner of Income Tax(Appeals)
adopted a different view on the same set of facts. In the impugned order, the ld. C.I.T(A) has
observed that ITAT, Special Bench, Mumbai in the case of Syncome Formulations Ltd. [108 TTJ2ITA No. 3991-3992/AHD/2007 & CO-4-5/AHD/2008

105 (Mumbai) concluded that for the purpose of 115JB, the deduction undersection 80HHCis to
be calculated on the basis of book profit. On that basis, he cancelled the penalty.3.     Aggrieved by the impugned order of Learned Commissioner of Income Tax(Appeals)
cancelling the penalty of Rs.8,02,210/- and Rs.65,675/- levied by the A.O. under section
271(1)(c) of the I.T. Act for both the assessment years respectively, the Revenue is in appeals
before us.4.     At the outset, Shri Sanjay R. Shah appearing on behalf of the assessee produced the
decision dated 06.02.2009 of ITAT, 'A' Bench, Ahmedabad in ITA No. 1151/AHD/2006 for the
assessment year 2001-02, wherein the Tribunal following the decision of ITAT, Special Bench,
Mumbai in the case of DCIT -vs.- Syncome Formulations (I) Ltd. (2007) 106 ITR 93
(Mum.)(SB) held that deduction undersection 80HHCis correctly claimed by the A.O. The ld.
counsel of the assessee pointed out that in the assessment year 2002-03 also, ITAT, 'D' Bench,
Ahmedabad in assessee's own case in ITA No. 928/AHD/2006 vide order dated 12.12.2008
following the decision of ITAT, Special Bench, Mumbai in the case of DCIT -vs.- Syncome
Formulations (I) Ltd. (supra) directed the A.O. to allow the deduction undersection 80HHCas
claimed by the assessee on the basis of book profit. The ld. counsel of the assessee accordingly
submitted that since the addition on the basis of which penalty is levied undersection 271(1)(c)has been deleted by the Tribunal, there remains no basis at all for levying penalty for
concealment. In such cases, no penalty can survive. He accordingly submitted that the order of
Learned Commissioner of Income Tax(Appeals) cancelling the penalty undersection 271(1)(c)for both the assessment years be upheld.5.     Shri Govind Singhal, Sr. D.R. appearing on behalf of Revenue fairly admitted that for
both the assessment years, the Tribunal has deleted the additions, which were made by the A.O.
on account of re-computation of deduction undersection 80HHC. Therefore, for both the
assessment years, penalty undersection 271(1)(c)is not leviable.6.     We have carefully gone through the orders of authorities below and the decisions dated
06.02.2009 and 12.12.2008 of the Tribunal in quantum appeals in ITA Nos. 1151/AHD/2006 and
928/AHD/2006 respectively for both the assessment years. Admittedly for both the assessment
years, in the quantum appeals, the addition on the basis of penalties undersection 271(1)(c)for3ITA No. 3991-3992/AHD/2007 & CO-4-5/AHD/2008

both the assessment years were levied, are deleted. Therefore, there remains no basis for levying
penalty for concealment. In these circumstances, no penalty can survive. We, therefore, incline to
uphold the order of Learned Commissioner of Income Tax(Appeals) cancelling the penalty for
both the assessment years. These grounds of appeals of Revenue are dismissed.7.     The Cross Objections filed by the assessee have not been pressed by the ld. counsel of the
assessee at the time of hearing. Therefore, the same are being dismissed as not pressed for both
the assessment years.8.     In the result, both the appeals of the Revenue as well as Cross Objections by the assessee
are dismissed.The Order was pronounced in the Court on 23.02.2010

                        Sd/-                                              Sd/-
                    (G.D. Agrawal)                                    (T.K. Sharma)
                 Vice-President (AZ)                                 Judicial Member

                        DATED : 23 / 02 / 2010


              Copy of the order is forwarded to :
       1) The Assessee
       (2) The Department.3) CIT(A) concerned, (4) CIT concerned, (5) D.R., ITAT, Ahmedabad.True Copy

                                                                   By Order

                                                        Deputy Registrar, ITAT, Ahmedabad

Laha/Sr.P.S.