TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 333
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....ng for Revenue presses only the following questions for our consideration: - "(a) Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied u/s. 271(1)(c) of the Act, on account of furnishing inaccurate particulars of income by making inadmissible claim of Rs. 64,02,228/- on account of interest paid to foreign party? (b) Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty u/s. 271(1)(c) of the Act, on account of furnishing inaccurate particulars of income by making inadmissible claim of Rs. 64,74,300/ - on account of compensation paid?" 3. Regarding Question (a): - (a) The Respondent-Assessee had debited the i....
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.... the audited account that the assessee was awaiting permission from the RBI, to make payment of the interest to the lender. Pending such approvals, provision of interest has been made in the account although no tax was deducted. This the CIT(A) held was on account of bona fide belief on the part of the Respondent-Assessee that it was not required to deduct tax on such uncertain liability. This after having made full disclosure. In any case, tax had been deducted and deposited on obtaining permission from the RBI to remit the amount of interest to the lender in U.K. Thus, holding no penalty under Section 271(1)(c) of the Act was imposable upon the Respondent-Assessee; (d) On further appeal by the Revenue, the Tribunal upheld the finding of ....
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....uantum proceedings would not ipso facto lead to imposition of penalty. The tests to be applied in imposing penalty are different and distinct from the tests to be applied in disallowing an expenditure in quantum proceedings. Section 271 (1)(c) of the Act provides that where an Assessee has concealed the particulars of his income or furnished inaccurate particulars of such income but if the explanation offered for the same is found to be satisfactory, then no penalty is imposed upon the party. In the present case, Respondent-Assessee has made a complete disclosure of particulars of income and expenditure by disclosing it in its account and also making a note in its Accounts viz. awaiting the permission of the RBI to make the payment; (g) Mo....
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....did not accept the Respondent-Assessee's explanation. In particular, its submission that no inaccurate particulars had been filed and they had made a bona fide claim, was not accepted. Besides, it imposed penalty upon the Respondent-Assessee on the ground that in quantum proceedings, appeal of the Respondent-Assessee had been dismissed by the CIT(A); (c) On Appeal, the CIT(A) upheld the order of the Assessing Officer imposing the penalty. This was on an additional ground that expenditure did not arise in the subject Assessment Year as compensation was to be paid at the time of completion of project. The final payment of Rs. 45 lakh to Shahs was evidence of payment on completion of project. Moreover, as the Respondent-Assessee had not d....
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....he present case. In particular, he invites our attention to the fact that in Reliance Petro Products (supra), the question was interpretation of Section 14A of the Act and a claim had been made by the Assessee therein on the basis that the expenditure had been allowed in the earlier year and, therefore, there was a bona fide belief. In the present case, there are no such facts; (f) It is true that both the Assessing Officer and the CIT(A) have held the Respondent-Assessee is liable for penalty. However, the Assessing Officer imposed a penalty on the basis that in quantum proceeding, the expenditure has been disallowed in view of the failure to deduct the tax under Section 40(a)(i) of the Act. In Appeal, the CIT(A) held the Respondent-Asses....