AO held that payment could have been deducted only to extent of 20 per cent under section 35DDA. Tribunal held that a view that two views were possible i.e., whether amount paid was allowable as deduction under section 37(1) or deduction was to be allowed under section 35DDA . Accordingly the Tribunal set aside penalty order holding that it was not a case of furnishing inaccurate particulars of income or concealment of income. High Court up held the view of the Tribunal.
PCIT v. Modipon Ltd. (2018) 100 taxmann.com 57/ 259 Taxman 426 (Delhi)(HC) Editorial : SLP of revenue is dismissed, PCIT v. Modipon Ltd. (2018) 259 Taxman 425 (SC)
S. 271(1)(c) : Penalty–Concealment-Claimed deduction in respect of payments made to employees under VRS Scheme–Levy of penalty is held to be not justified.[S. 35DDA, 37(1)]