Section 80IA, 271(1)(c) of Income Tax Act, 1961—Deduction u/s 80IA— In the instant case, appeal is filed by revenue challenging the judgment of ITAT . the issue revolves around the penalty imposed by the assessing officer under Section 271(1)(c) which eventually, the Tribunal deleted by the impugned judgment. In the judgment, the Tribunal accepted the assessee's contention that certain direct expenses were reduced from CFS income inadvertently.

It was pointed out that the expenses pertaining to indirect expenditure, interest on term loan and depreciation were missed out while claiming original deduction under Section 80IA of the Act. Similarly, inadvertent errors were also made by the auditors who were issued the audit report in prescribed format. However, upon realizing the error, the assessee issued suo motu revised computation of income before the assessing officer during the course of the assessment proceedings. In addition, relying upon the judgments of various High Court, the assessee also relied on the the decision of the Supreme Court in the Price Waterhouse Coopers Pvt Ltd Vs. CIT & Anr. [2012] 348 ITR 306 (SC).

Held that—We may also notice that the Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt Ltd [2010] 322 ITR 158 (SC) has held that every case of rejection of claim would not give rise to penalty proceedings.[PR. COMMISSIONER OF INCOME TAX, CENTRAL 3 VERSUS M/S. UNITED LINER AGENCIES OF INDIA P LTD.] [2019] 9 ITCD Online (12) [BOMBAY HIGH COURT]