TaxTMI 
TaxTMI 
2010 (3) TMI 714
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....al, as stated above as and when need of doing so arises." 3. This appeal by the Revenue is directed against the action of the CIT(A) in deleting the penalty of Rs. 7,96,200 levied by the AO under s. 271(1)(c) of the IT Act, 1961 (In short "the Act") for the asst. yr. 2003-04. The brief facts relating to this issue are that the assessee filed return of income on 29th March, 2004 declaring an income of Rs. 42,01,300. The AO framed the assessment under s. 143(3) of the Act determining the taxable income of the assessee at Rs. 69,10,841 on 31st March, 2006. The assessee is engaged in the proprietary concern M/s Shyam Solutions and an export sales of softwares to the tune of Rs. 2,33,66,220 has been shown. The assessee has shown a net profit of Rs. 2,25,36,542 from these export sales. The assessee in Form No. 56G attached with the return of income, reported that an amount of Rs. 1,60,81,545 was brought into India and for the remaining amount permission has been applied for. The assessee claimed that the entire profit of Rs. 2,25,36,542 was eligible for exemption under s. 10B of the Act. The AO noticed that extension was granted upto 31st Dec., 2003 which was further extended upto 31s....
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....re, no penalty was leviable. 7. The Revenue preferred an appeal before the Tribunal and the Tribunal vide its order dt. 12th Sept., 2008 passed in ITA No. 564/Luc/2008 held as under: "8. We have considered the submissions of both the parties and carefully gone through the materials available on record. In the instant case it is not, in dispute that the assessee was engaged in the export of software and realizing the amount on account of export sale. Some of the amounts were not realized upto the extended period and the said amount was added to the income of the assessee. It is well-settled that the assessment proceedings and the penalty proceedings are two separate and distinct proceedings and even if some addition had been made but if there was no concealment of the income or inaccurate particulars of income were not furnished, the penalty under s. 271(1)(c) of the IT Act cannot be levied. In the present case, the assessee claimed the exemption under s. 10B on the basis of report of the chartered accountant given in Form No. 56G as per r. 16E of the IT Rules, 1962. The said report was dt. 28th Oct., 2003 given by Tripathi & Jain, chartered accountants which is placed at pp. ....
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....f chartered accountant dt. 28th Oct., 2003 and in view of such subsequent development exemption was not admissible. Tribunal has considered the case of the assessee but all these development which had taken place after report has been given by chartered accountant dt. 28th Oct., 2003, i.e., extension of time upto 31st Dec., 2003 and further extension of time upto 31st March, 2004 in respect of the amount to be brought in India and the fact that amount was not received till extension was granted and exemption was in respect of its total export sale, the said facet of the matter has not at all been dealt with. Tribunal ought to have adverted to, on the version of Revenue authority also instead of proceeding to place reliance on the version of the assessee alone. Decision making process is vitiated. Consequently, order dt. 12th Sept., 2008 passed by Tribunal is hereby set aside. Matter is remitted back to Tribunal to decide afresh in accordance with law preferably within next two months from the date of presentation of certified copy of this order." 9. After receipt of above judgment of the Hon'ble High Court, this Bench of the Tribunal has provided a fresh opportunity of ....
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.... (Kol) in which it has been held that claiming of excess deduction also amounts to concealment of income. Shri Anadi Verma, learned senior Departmental Representative also relied on the following observations of the Tribunal, Pune Bench 'B' in the case of Praj Industries Ltd. vs. Jt. CIT (2009) 118 ITD 447 (Pune), the Pune Bench of the Tribunal has referred to its earlier decision in the case of Asstt. CIT vs. Malhotra Mukesh Satpal, ITA No. 183/Pn/2003 etc., order dt. 31st May, 2006 [reported at (2008) 113 TTJ (Pune) 401-Ed.], wherein the Tribunal has concluded and summarized the scope and effect of s. 271(1)(c) r/w Expln. 1 as under: "12. This is a case relating to the imposition of penalty under s. 271(1)(c) of the Act. The Tribunal, Pune Bench 'A', Pune in the case of Asstt. CIT vs. Malhotra Mukesh Satpal, ITA No. 183/Pn/2003, etc., constituted by the present Members, has vide its order dt. 31st May, 2006 [reported at (2008) 113 TTJ (Pune) 401-Ed.] has analyzed and deliberated upon the provisions of s. 271(1)(c) r/w Expln. 1 thereto, and, after referring to a number of decisions of the various Courts, namely: (1) B.A. Balasubramaniam & Bros. Co. vs. CIT (1999) 157 CTR (SC....
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.... The burden placed upon the assessee to rebut the presumption raised under Expln. 1 to s. 271(1)(c) would not be discharged by any fantastic or fanciful explanation. It is not the law that any and every Explanation by the assessee must be accepted. (ix) Mere offer of income by the assessee cannot justify cancellation of penalty. Though it cannot he laid down as a principle of universal application that whenever an addition is made on a concession, penalty is not to be levied, the factual position in each case has to be considered and the background in which the agreement is made for the addition has to be taken note of. (x) Where penalty is exigible with reference to the Explanation to s. 271(1)(c), the mere fact that the AO has not specifically invoked the same would not justify cancellation of penalty. 3.21 In this view of the matter, it is thus clear that so long as the assessee gives bona fide explanation and unreservedly gives all the documents and information without withholding any information relating to the computation of assessee's total income, the assessee's explanation unless found to be false, would deserve acceptance for the purpose of penalty imposable unde....
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....medy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under s. 276C of the Act. Shri Anadi Verma, learned senior Departmental Representative also relied on the decision of the Tribunal, Delhi Bench in the case of Naresh Kumar Verma vs. Dy. CIT (2009) 124 TTJ (Del) 156 : (2009) 26 DTR (Del)(Trib) 17 : (2009) 29 SOT 511 (Del). In that case, the assessee claimed deduction under s. 10B of the Act. The Tribunal upheld the order of CIT stating that levy of penalty was justified: "In view, of the aforesaid, it was to he held that Expln. 1 to s. 271(1)(c) was applicable to the facts of the case. The assessee had furnished inaccurate particulars of his income which resulted into excess claim of exemption under s. 10B in the return of income filed by him. The bona fide of the assessee had not been established as all the facts relating to the claim of deduction under s. 10B were not duly and correctly stated by the assessee while filing the return-of income. The facts came to the notice of the AO during the course of the assessment proceedi....
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.... audit report depicted the position of remittances in India as existed upto date of audit report. The assessee had duly applied for extension of time, as per which first extension was granted upto 31st Dec., 2003. Subsequently, further extension was granted vide letter dt. 26th Dec., 2003 up to 31st March, 2004. Thus, as on the date of filing the return on 29th March, 2004, the assessee was armed with extension order dt. 26th Dec., 2003, which was yet to expire, the date of expiry being 31st March, 2004. Shri S.K. Garg, learned counsel for the assessee vehemently argued that the assessee's explanation before the AO during the course of assessment proceedings as well as penalty proceedings was that he was under a bona fide belief that whole of the remaining sum i.e., Rs. 1,62,84,675 (total export turnover of Rs. 2,33,66,220 - Rs. 1,60,81,545 representing the receipts upto the date of report) was also to be received within the extended period that was available upto 31st March, 2004. Shri S.K. Garg, learned counsel for the assessee pointed out that in this extended period from 1st Nov., 2003 to 31st March, 2004 substantial sums had duly been received leaving a balance of Rs. 29,48,84....
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....export turnover of Rs. 2,33,66,220 as aforesaid) in convertible foreign exchange. The assessee had claimed exemption under s. 10B of the Act on the basis of the aforesaid report. It is seen that the assessee had duly applied for extension of time and first extension was granted upto 31st Dec., 2003. Subsequently, further extension was granted vide letter dt. 26th Dec., 2003 upto 31st March, 2004. From these facts, it is clear that on the date of filing the return on 29th March, 2004, the assessee was armed with extension order dt. 26th Dec., 2003 which was yet to expire, the date of expiry being 31st March, 2004. The main contention of the assessee during the assessment proceedings as well as during the penalty proceedings before the AO was that he was under bona fide belief that whole of the remaining sum i.e., Rs. 1,62,84,675 (Rs. 2,33,66,220 - Rs. 1,60,81,545 representing the receipts upto the date of audit report) shall also be received within the extended period that was available upto 31st March, 2004. There is no dispute that in this extended period from 1st Nov., 2003 to 31st March, 2004, substantial sums had duly been received, leaving a balance of Rs. 29,48,843 only. From....
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.... reason that "return" is a media through which particulars of income are furnished, unless the "return" itself is non est or the same is revised/modified subsequently to make patently wrong claim. It is an undisputed fact that in the present case, the "return" was filed on 29th March, 2004, which was a valid return under s. 139(4) of the Act and there was no subsequent revision or modification of the said return (so far as the assessee is concerned). We observe that as on 29th March, 2004, when the return was filed, benefit of exemption was claimed with reference to the entire export turnover of Rs. 2,33,66,220 which yielded income of Rs. 2,25,36,542. On that date, the period extended from 1st Jan., 2004 to 31st March, 2004 was yet to expire, therefore, it could not have been said or held that the assessee had consciously made a wrong claim. It is seen that during the extended period commencing from 1st Nov., 2003 to 31st March, 2004, the assessee had received substantial remittances out of its "export turnover" therefore, it could not have been said that there did not exist any justification for the assessee to assume th8J whole of the export proceeds shall be remitted and receive....