TaxTMI 
TaxTMI 
2010 (7) TMI 560
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........................ 3. The CIT(A) erred in law and on facts in upholding levy of penalty under section 271(1)(c) in respect of the alleged wrong claim of deduction of Rs. 5,90,000 under section 80-GGB of the Act. 5. While upholding levy of penalty under section 271(1)(c) in respect of the alleged wrong claim of deduction under section 80 HHC inasmuch as the same was made in the following manner:- (a) while making the increase in terms of the Proviso to Sub-section 80 HHC the total turnover of export business was only considered and not the total turnover of business of the appellant. (b) While calculating deduction under section 80 HHC relief available u/s 80IA was not reduced.." 2. .............................. Thereafter penalty proceedings under section 271(1)(c) were initiated and levied penalty against the following items:- (i) in respect of alleged wrong claim of deduction under section 80 HHC. (ii) Deprecation claim Rs 7,69,392 toward lease hold land. (iii) Interest of Rs 10,539 on account of late payment of TDS. (iv) In respect of alleged wrong claim of short term capital loss of Rs. 33,80,390 on sale of securities in terms of the pro....
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....clear contrary to the provisions of the Act and regarding which assessee has not made any disclosure in its computation of income that it has claimed deduction under section 80 GGB without paying the same to any politically party. The ITAT vide order dated 10-02-2009, in ITA No. 3209/M/06 for AY 2004-05 has remitted this issue back to the file of the AO with certain directions. The AO levied penalty under section 271(1)(c). 6. The CIT (A) confirmed the penalties levied by the AO on the above three issues. in respect of alleged wrong claim of deduction under section 80 HHC. In respect of alleged wrong claim of short term capital loss of Rs. 33,80,390 on sale of securities in terms of the provisions of section 94(7) of the Act, and In respect of the alleged wrong claim of deduction of Rs. 5,90,000 under section 80GGB of the Act. 7. The learned AR submitted that effectively there are three items on which penalty under section 271(1)(C) has been confirmed by the CIT(A) and the assessee agitated in the grounds of appeal. These are penalty under section 271(1)(c) levied in respect of calculation of deduction under section 80 HHC, short term capital loss under section 94(7) ....
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.... in support of his contentions relied upon following decisions:- 1. Reliance Petroproducts Pvt.Ltd. (322 ITR 158) (SC), 2. Jhavar Properties (P.) Ltd. Vs. ACIT, 28 ITR 26 (Mum.) 3. Glorious Realties Pvt. Ltd. Vs. ITO, 29 SOT 292 The learned AR submitted that similar arguments are in respect of deduction under section 80GG & calculation of deduction u/s 80 HHC. 8. The learned DR referring charging section 4 of IT Act submitted that when the assessee filed a return of income all the provisions of the Act are to be considered and return of income should be in accordance with provisions of Income-tax Act including section 94(7). The learned DR submitted that the judgment cited by the learned AR in case of 244 ITR 188 is not applicable to the fact of the case under consideration as in the case under consideration the assessee did not press the relevant ground of merit appeal before ITAT. The learned DR submitted that particulars do not mean information. The learned DR submitted that there was no disclosure of loss under section 94(7) by the assessee. The assessee is duty bound to point out such loss under section 94(7) of the Act. The learned DR submit....
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....te particulars of such income'. Therefore, both in cases of concealment and inaccuracy the phrase 'particulars of income' are used. It will be noted that as regards concealment, the expression in clause (c) of the section 271(1) is 'has concealed the particulars of his income' and not 'has concealed his income'. The expressions "has concealed the particulars of income" and "has furnished inaccurate particulars of income" have not been defined either in section 271(1)(c) or elsewhere in the Act. Two words are important words for considering a matter for levy of penalty under section 271(1)(c) of the Act . These words are "conceal" and "inaccurate particulars" .The Apex Court in the case of Reliance Petroproducts Pvt.Ld. (322 ITR 158) (at page 164 ) regarding the word 'particulars' used in this section, of the section 271(1) (C) has held as under:_ "There can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise". 10.1 Now coming to the meaning of words 'inaccurate' and 'conceal'. As state....
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....nt in Dilip N. Shroff's case (supra) was upset. In Dharamendra Textile Processors' case (supra), after quoting from section 271 extensively and also considering section 271(1)( c), the Court came to the conclusion that since section 271(1)( c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing Return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of section 271(1)( c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section 276C of the Act. The basic reason why decision in Dilip N. Shroff's case (supra) was overruled by this Court in Dharamendra Textile Processors' case (supra), was that according to this Court the effect and difference between section 271(1)(c) and section 276C of the Act was lost sight of in case of Dilip N.Shroff (supra). However, it must be pointed out that in DharamendraTextile Processors' ca....
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....ch figure will also make the total income inaccurate in particulars to the extent it does not include such income. In other words the AO cannot invoke provision of section 271(1)(c) on the basis routine and general presumptions. Whether it be a case of only concealment or of only inaccuracy or both, the particulars of income so vitiated would be specific and definite and be known in the assessment proceedings by the ITO, who on being satisfied about each concealment or inaccuracy of particu­lars of income would be in a position to initiate the penalty proceedings on one or both of the grounds of default as may have been specifically and directly detected. 10.6. In addition to main provisions of concealment "has concealed the particulars of his income" or "has furnished inaccurate particulars of such income" there are deemed to represent the income in respect of which particulars have been concealed .The deemed concealment is provided in explanations. Often a question arose whether in cases where additions or disallowances made by the ITO the penal provisions of section 271(1)(c) would attract. Explanation 1 takes care of this situation. The explanation 1 to section 271(1) of t....
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.... penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9(2) of the Central Sales Tax Act, 1956 have been examined by the Apex Court in the case of Cement Marketing Co. of India Ltd. vs. Assistant Commissioner of Sales Tax [1980] 4 Taxman 44 (SC), 124 ITR 15 (SC). Facts in brief of this case were that the assessee-company effected certain transactions of sale of cement in accordance with the provisions of the Cement Control Order during the assessment period 1-8-1971 to 31-7-1972. The amount of freight included in the "free on rail destinations railway station" was paid by the purchasers and hence the assessee deducted from the price shown in the invoices sent to the purchasers. In the course of its assessment to sales tax under the Madhya Pradesh General Sales Tax Act, 1958 and the Central Sales Tax Act, 1956, the assessee did not include the said amount of freight in its taxable turnover on the ground that it did not form part of the sale price. In his two separate assessment orders, one under the Central Sales Tax Act, 1956, and the other under the Madhya Pradesh General Sales Tax Act, 1958, the Assistant Commissioner,....
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....ver shown in the returns and the Assistant Commissioner was not justified in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9(2) of the Central Sales Tax Act, 1956. 10.9. From the above discussion of scheme of the Act, two important things come out are that it is the duty of the assessee to furnish particulars of income simultaneously he has right to claim all exemptions and deductions provided in the Act, according to the assessee for which he is entitled. The duty of the Assessing Officer is to assess real and correct income in accordance with law. The CBDT in its Circular No. 14(XL35) of 1955 dated 11-04-1955 'regarding departmental attitude towards' - stated that The CBDT in its Circular No. 14(XL35) of 1955 dated 11-04-1955 'regarding departmental attitude towards' - stated that Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where proceedings or other p....