- (1.) This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 6.2.2015 (Annexure A-5) passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 964/CHD/2014, for the assessment year 2007-08, claiming the following substantial questions of law:- i) Whether the Hon'ble ITAT is right in law in upholding the decision of the CIT(A) deleting the penalty levied by relying upon the decision of Reliance Petro Products, when the issue was clearly covered by the decision of the Hon'ble Delhi High Court in the case of CIT vs. Zoom Communication (P) Ltd., 2010 327 ITR 510 ii) Whether the Hon'ble ITAT is right in law in deleting the penalty without considering that non furnishing of documentary evidences regarding any expenditure claimed tantamounts to furnishing of inaccurate particulars of income iii) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in law in deleting the penalty levied by the AO u/s 271(1)(c) without considering that an incorrect claim in law was made in reducing the deferred tax liability from the books profits and tax liability u/s 115JB was maliciously reduced when such amount was never credited in the P&L Account
(2.) Put shortly, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 30.10.2007 declaring nil income. The case was selected in scrutiny and the Assessing Officer vide assessment order dated 13.11.2009 (Annexure P-1) under Section 143(3) of the Act made the following additions:- (i) Rs. 57,64,059/- on account of diversion of funds to sister concern; (ii) Rs. 2,38,74,691/- on account of capitalization of interest on capital work in progress; (iii) Rs. 27,562/- on account of disallowance of proportionate interest under Section 14-A of the Act; (iv) Rs. 3,01,940/- on account of disallowance under Section 40(a)(ia) of the Act; and (v) Rs. 16,14,610/- on account of capitalization of expenditure on account of building repair and maintenance. Besides charging interest under Sections 234B, 234C and 234D of the Act, proceedings for levy of penalty under Section 271(1)(c) of the Act were also initiated.
(3.) Feeling aggrieved by the aforesaid assessment order, Annexure A-1, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity "the CIT(A)"]. The CIT(A) vide order dated 1.3.2011 confirmed the additions mentioned at Sr. No. (ii) to (v) and deleted the addition mentioned at Sr. No.(i) above. Against the order dated 1.3.2011, the assessee filed an appeal challenging the additions at Sr. No. (ii) to (v) confirmed by the CIT(A) whereas the revenue challenged the addition at Sr. No. (i) deleted by the CIT(A) before the Tribunal. The Tribunal vide order dated 28.1.2015 (Annexure A-2) set aside the order of the CIT(A) and directed the Assessing Officer to make disallowance on pro-rata basis. However, the appeal of the revenue was allowed for statistical purposes. The Assessing Officer vide order dated 28.3.2013 (Annexure A-3) imposed penalty amounting to Rs. 1,10,78,245/- under Section 271(1)(c) of the Act on the issues confirmed by the CIT(A). The assessee assailed the order, Annexure A- 3, passed by the Assessing Officer before the CIT(A) who vide order dated 13.8.2014 (Annexure A-4) deleted the said penalty imposed under Section 271(1)(c) of the Act. The order, Annexure A-4, was challenged by the revenue in appeal before the Tribunal. The Tribunal vide order dated 6.2.2015 (Annexure A-5) confirmed the order of the CIT(A) and dismissed the appeal. Hence, the present appeal.;