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[2007] 294 ITR 88 (Delhi) [2007] 159 TAXMAN 31 (DELHI) HIGH COURT OF DELHI Commissioner of Income-tax* v. Freementle India Televisio MADAN B. LOKUR AND VIPIN SANGHI, JJ. IT APPEAL NO. 485 OF 2006 JULY 20, 2006 Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1997-98 - Assessee claimed deduction of certain amount as format fee - Assessing Officer disallowed assessee's claim for deduction and initiated penalty proceedings for furnishing inaccurate particulars - Assessee contended that it had sent a letter on 2-6-1999 giving, its recomputation in which it had withdrawn its claim regarding format fee and amount towards format fee had already been offered for tax in assessment year 1997-98 in its return of income filed as far back as on 30-11-1997; said fact had been overlooked by Assessing Officer in penalty proceedings - Whether since assessee had withdrawn claim for deduction and had offered amount for tax in November, 1997 well in advance of assessment order being passed in March, 2000, penalty could not be sustained - Held, yes Ms. P.L. Bansal for the Appellant. ORDER 1. The revenue is aggrieved by an order dated 27-4-2005 passed by the Income-tax Appellate Tribunal, Delhi Bench 'C' in ITA No. 2607/Delhi/2001 for the assessment year 1997-98. 2. A penalty of Rs. 4,58,393 was levied against the assessee under section 271(1)(c) of the Income-tax Act, 1961. This has been set aside by the impugned order. 3. The assessee produces TV serials and returned a total income of Rs. 15,60,920, which was assessed to Rs. 24,94,950 under section 143(3) of the Act. The assessee claimed a deduction of Rs. 10,66,029 as format fee. The Assessing Officer did not allow this deduction and, therefore, this amount was added to the total income. The Assessing Officer also initiated penalty proceedings under section 271(1)(c) of the Act for furnishing inaccurate particulars. 4. According to the assessee, it had sent a letter on 2-6-1999 giving, its re-computation in which it had withdrawn its claim regarding format fee. It was also contended by the assessee, based on the Audit Report submitted on 24-12-1999 that the amount towards…

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