2014 (7) TMI 340

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....ts and in the circumstances of the case and in law, the learned CIT (A) erred in confirming penalty of Rs. 3, 09, 381/- under section 271(1)(c) of the Income Tax Act, 1961. Your Appellant reserves the right to add to, alter or amend the ground of appeal. " 2. The only ground of appeal is about confirmation of penalty of Rs. 3. 09 lakhs imposed by the AO u/s. 271(1)(c) of the Act. Assessee-company, engaged in the business of share operations, filed its return of income on 30. 10. 2007 declaring total income of Rs. 2. 48 crores. Assessing Officer (AO) finalised the assessment on 24. 12. 2009, determining the income of the assessee at Rs. 2, 58, 28, 029/-. 3. During the course of assessment proceedings, AO found that assessee was earn....

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....e, that even then assessee had debited an amount of Rs. 9. 37 lakhs as forex loss from Non-Tonnage Income. Referring to explanation 1 to section 271(1)(c) he held that assessee had concealed the particulars of income. Finally, he imposed the penalty of Rs. 3, 09, 381/- u/s. 271(1)(c) of the Act. 4. Assessee preferred an appeal before the First Appellate Authority (FAA). After considering the submissions of the assessee and the penalty order, he held that AO had issued notice u/s 143(2) on 07. 08. 2008, that assessee had filed a letter before the AO on 25. 09. 2009, in that letter it stated that forex loss on Tonnage Vessel had been wrongly claimed under the Non-Tonnage Income, that assessee had revised the return for AY 2008-09 on 27. 01....

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....d forex loss on Tonnage Vessel under the Non-Tonnage Income and such claim is not allowable. Provisions of the Act are very clear about the loss that could be claimed or not claimed under the Tonnage income/non Tonnage income. Assesse is a corporate entity and assisted by the professionals. After the AO had issued notice u/s. 143(2)that the assessee revised its computation of income for subsequent year and agreed for addition for the year under appeal. In our opinion, it was not voluntary compliance of the provisions of the Act. In our opinion, after receiving notices u/s. 142/143 if the assessee admits some income it cannot be taken as voluntary disclosure. Secondly, penalty under the Act is of not of criminal nature. Before imposing the p....

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....otally different from the facts of Price Water House Pvt. Ltd. (supra). In that matter error had occurred in filing the return and not in the statement or the audit report. Secondly, AO in the present case had found that the claim made by the assessee was not an allowable deduction. As far matter of Harshad B Desai(supra) is concerned it is found that in that matter penalty was deleted considering the peculiar facts of that matter. As both the cases, relied upon by the assessee are distinguishable on facts, so, in our opinion same are of no help to the assessee. We find that the Hon'ble Supreme Court has deliberated upon the issue of levy of penalty u/s. 271(1)(c)of the Act, in the case of Mak Data(supra), as under: "Explanation 1 to ....