TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 481
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....assed by the Income Tax Appellate Tribunal (Tribunal, for short) is dated 13th September, 2010 and deletes the penalty imposed under Section 271(1)(c) of the Act. 3. The respondent-assessee had filed e-return for the assessment year in question on 30th November, 2006, declaring loss of Rs. 1,89,44,380/-. In the return, under head profit and loss, the assessee had claimed business loss amounting to Rs. 2,33,07,349/- on account of sale of fixed assets. 4. During the course of assessment proceedings, details of which we will refer to subsequently, the assessee filed a revised return on 8th March, 2008 declaring total income of Rs. 33,62,974/-. In the revised return, the loss of Rs. 2,33,07,349 on account of sale of fixed assets was not treated as "business loss", rather shown as capital loss. The Assessing Officer, vide its assessment was order dated 5th June, 2008, made some additions and assessed the total income of assessee at Rs. 40,19,974/- and taxable income at "NIL" after giving benefit of brought forward losses. 5. Pursuant to the satisfaction recorded in the assessment order, penalty proceedings for concealment under Section 271(1)(c) of the Act were initiated and penalty ....
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....d any communication from the AO to the assessee seeking explanation regarding the claim of loss occurring on account of sale of assets. Therefore, in such circumstances, it has to be held that the revised return was bona-fidely filed u/s 139(5) of the Act. 6.5 Coming to the decision in the case of Reliance Petro Products Pvt. Ltd. (supra), the ratio of the case is that a claim in respect of which all facts have been disclosed will not lead to inference of furnishing inaccurate particulars of income under Explanation-1 of section 271 (I)(c). In this case, the assessee has furnished all facts along with the 'return of income. In particular, the details filed by it include the profit & loss account, statement of income and the schedule of fixed assets. The schedule of fixed assets shows deduction of the assets. It has also been explained that the return was prepared by the then chartered accountant and, thus, the assessee was not properly advised by the chartered accountant. In view thereof, his services were dispensed with and a new-chartered accountant was engaged. We may now examine the explanation of the assessee in the light of the decision in the case of Zoom Communication ....
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....of any person under this Act:- (A) Such person falls to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) Such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bone fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 10. The word "concealment" would refer to somewhat malicious and mala fide conduct on the part of the assessee. The expression "inaccurate particulars" is copiously wider and broader and would include cases where particulars furnished are not accurate and which results in avoidance or evasion of tax. In Webster's Dictionary, the word "inaccurate" has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or tran....
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.... is on the assessee. Both the conditions are cumulative and when the conditions are satisfied, penalty under section 271(1)(c) of the Act should not be imposed. 13. When we refer to the facts of the present case and the return of income originally filed, it is noticeable that the assessee in Schedule-16 "General Expenses" of the profit and loss account had shown a debit of Rs. 2,33,07,349/- on account of loss on sale of the fixed assets. Thus, the fact that the assessee had incurred losses was indicated in Schedule-16 of the profit and loss account. To this extent, the facts were stated in the original return. It is plausible for the assessee to urge that material facts were submitted and stated in the original return. 14. The second question, which arises for consideration is whether the assessee has been able to show that his conduct was bona fide. 15. We have recorded the findings of the Tribunal on the aforesaid aspect in paragraphs quoted from the impugned order. The reasoning of the Tribunal is two-fold. Firstly, the assessee had relied upon the report submitted by the Chartered Accountant and the return of income prepared by the said Chartered Accountant. The mistake or e....
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....ort to be filed with the return. We cannot, therefore, accept the contention of the assessee as universal and comprehensive that all claims howsoever untenable, once certified by a Chartered Accountant or the Directors of the company, cannot be made a subject matter of penalty proceedings. This will be stretching and making the requirement to prove bona fide conduct illusionary and ineffective and would fail to, check and stop fanciful and incredible claims. It is noticeable that most of the income tax returns are accepted without scrutiny or regular assessment and self-compliance of tax provisions is a rule required to be followed. The view, which we have taken, is in consonance with the ratio expounded in Reliance Petro Products Pvt. Ltd. (supra). 19. The second aspect, which arises for consideration, is whether the revised return was filed voluntarily and before the notice of the inaccurate particulars by the Assessing Officer. Factum of filing a revised return to rectify an earlier mistake is an important and relevant factor to determine whether the conduct of the assessee was bona fide. The Tribunal, in the impugned order has held that the revised return was filed before any ....