ITA 54/MUM/2014, (Assessment Year: 2007-2008). Case: The DCIT-9(2) Vs Hindustan Oil Exploration Co. Ltd.. ITAT (Income Tax Appellate Tribunal)

Case Number:ITA 54/MUM/2014, (Assessment Year: 2007-2008)
Party Name:The DCIT-9(2) Vs Hindustan Oil Exploration Co. Ltd.
Counsel:For Appellant: Shashi Bhusshan Prasad and For Respondents: Sivam Subramanian
Judges:G.S. Pannu, Member (A) and Sanjay Garg, Member (J)
Issue:Income Tax Act, 1961 - Sections 14A, 271(1)(c), 42, 42(1), 80 IB(9), 80-IB(9), 80IB, 80IB(9)
Judgement Date:August 31, 2015
Court:ITAT (Income Tax Appellate Tribunal)


G.S. Pannu, Member (A), (ITAT Mumbai 'H' Bench)

  1. The captioned appeal by the Revenue is directed against the order of the CIT(A)-20, Mumbai dated 23/10/2013 pertaining to the assessment year 2007-08, which in-turn has arisen from an order passed by the Assessing Officer dated 20/03/2012 levying a penalty of Rs. 34,24,75,519/- under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act'). The Ground of Appeal raised by the Revenue Reads as under:-

    "1. Whether on the facts and in the circumstances of the case and in law, the Learned CIT (A) erred in deleting the penalty imposed by the Assessing Officer u/s. 271(1)(c) of I.T. Act, 1961, amounting to Rs. 34,26,79,519/- without appreciating that the assessee had furnished inaccurate particulars in so far so was not eligible to claim deduction u/s. 80IB(9) as no commercial production or refining of mineral oil was carried on and that the claim for deduction u/s.80IB being patently inadmissible, and penalty on disallowance u/s. 14A amounting to Rs. 19,75,991/- and u/s. 42A amounting to Rs. 2,55,07,582/- were levied as assessee has furnished inaccurate particulars of the income and the facts of the assessee's case are different from those of Reliance Petro Products Pvt. Ltd. (322 ITR 158 SC) relied on by the CIT(A)?"

  2. The respondent assessee before us is a company incorporated under the provisions of Companies Act, 1956 and is inter-alia, engaged in the business of exploration, development and production of crude oil and gas. For the assessment year 2007-08, it filed a return of income declaring nil income, which was subject to scrutiny assessment, whereby the total income was determined at an amount of Rs. 93,03,56,160/-. Subsequently, the Assessing Officer found the assessee guilty of concealment and/or furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act, qua the additions made in the course of assessment proceedings and, accordingly, levied a penalty of Rs. 34,24,75,519/- under section 271(1)(c) of the Act. The said penalty has since been deleted by CIT(A), against which the Revenue is in appeal before us on the aforesaid Ground of appeal.

  3. In brief, the relevant facts are that, penalty under section 271(1)(c) of the Act has been levied on the difference between the reported and the assessed income on the following four additions made in the Quantum assessment proceedings:-

    (i) Denial of deduction u/s. 80-IB(9) of the Act amounting to Rs. 84,87,05,610/-;

    (ii) Treating Income from Other sources amounting to Rs. 14,89,91,744/- as ineligible for deduction u/s. 80-IB(9) of the Act;


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