Law:

Section:

Section 271(1)(c), read with sections 80-IA and 154, of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessee filed its return of income claiming deduction under section 80-IA - Assessing Officer noticed that it was a firm and that under provisions of Act, only companies registered in India were entitled to deduction under section 80-IA - He, thus, issued notice under section 154 calling upon assessee to show cause as to why deduction claimed under section 80-IA should not be disallowed - Prior to issue of said notice, assessee had already filed a revised return of income under section 139(5) wherein no claim under section 80-IA was made - Assessing Officer, however, did not consider revised return and took a view that assessee had made a wrong claim under section 80-IA - He, accordingly, imposed penalty on assessee under section 271(1)(c) - On appeals, Commissioner (Appeals) as well as Tribunal set aside penalty order - Whether since assessee had made a bona fide claim for deduction under section 80-IA, which came to be rectified by filing a revised return withdrawing claim, there was no concealment or furnishing of inaccurate particulars of income on part of assessee - Held, yes - Whether, therefore, authorities below were justified in setting aside penalty imposed under section 271(1)(c) - Held, yes FACTS The assessee filed its return of income claiming deduction under section 80-IA. The Assessing Officer noticed that it was a firm and that under the provisions of the Act, only companies registered in India were entitled to deduction under section 80-IA. He, therefore, issued a notice under section 154 calling upon the assessee to show cause as to why deduction claimed under section 80-IA should not be disallowed. In reply to the said notice, the assessee informed the Assessing Officer that it had already filed a revised return of income under section 139(5) wherein no claim under section 80-IA had been made. The Assessing Officer did not consider the assessee's claim under the revised return and framed assessment determining total income at Rs. 69,74,621 as against the returned income of Rs. 18,96,110. In penalty proceedings, the…

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