This article provides a detailed analysis of the ITA No. 1548/DEL/2019 case, where Mercury Rubber Mills disputed a tax penalty related to deductions claimed under Section 80IC of the Income Tax Act for the assessment year 2009-10.
Mercury Rubber Mills filed a return declaring nil income after claiming a deduction of Rs.78,49,966 under section 80IC for the AY 2009-10. The assessment resulted in a disallowed claim and a subsequent penalty of Rs.25,00,000 under Section 271(1)(c), which the company contested up to the Income Tax Appellate Tribunal.
The primary contention revolves around the penalty notice’s validity, which did not specify whether the penalty was for concealing income particulars or furnishing inaccurate particulars, leading to arguments based on the precedent set by the Hon’ble Delhi High Court in PCIT vs. Sahara India Life Insurance Co. Ltd. (2021).
The Tribunal, aligning with the Delhi High Court’s decision, found the penalty notice defective and quashed the penalty, offering relief to Mercury Rubber Mills. This decision highlights critical aspects of procedural correctness required in tax penalty proceedings.
The outcome of this case underscores the importance of precise and clear communication in penalty notices and the implications of administrative oversights on the outcomes of tax disputes.
Mercury Rubber Mills’ Tax Penalty Dispute Over Section 80IC Deduction, ITA 1548/DEL/2019
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