No Penalty on tax liability which is based on decision not available at the time of filing ROI

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HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL No. 397 of 2012

COMMISSIONER OF INCOME TAXVersus
FRIENDS SALT WORKS AND ALLIED INDUSTRIES

 

The revenue authorities had imposed penalty on the ground that deduction under section 80HHC of the Act was wrongly claimed. The Tribunal however, deleted such penalty. The Tribunal noted that tax liability against the assessee was confirmed on the basis of the decision of the Apex Court in the case of CIT v. Ravindranathan Nair, 295 ITR 228. The Tribunal noted that such decision was not available when the assessee filed the return. On such basis, the Tribunal was prompted to delete the penalty.

In our view, the Tribunal committed no error. The Tribunal relied on the decision in the case of CIT v. Reliance Petro Products Pvt.Ltd., 322 ITR 158 wherein it has been highlighted that filing of wrong claim per se would not give rise to penalty proceedings.