TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 9
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....are being disposed off by this consolidated order. 2. In A.Y. 2006-07, the revenue is aggrieved by deletion of penalty of Rs. 20,92,925/- and in A.Y.2007-08, deletion of penalty of Rs. 17,21,427/- by the Ld.CIT(A). 3. Brief facts of the case are that the assessee is an association constituted as a nonprofit organization and registered u/s 25 of Companies Act, 1956. The association was constituted for the purpose of treatment of industrial effluents generated by its members. The cost of the treatment of industrial effluents is met by the contribution made by the members themselves and it does not render any services to any outsiders. Since there was a complete identity between the contributors and participators, therefore, it has claimed b....
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....ee vide letter dated 18.10.2012 filed detail explanation which has been reproduced at page 2 of the impugned penalty orders. The sum and substance of assessee's explanation was that the ITAT in respect of all the earlier assessment years right from A.Ys. 1997-97 to 2005-06 had held that, all the interest income earned by the assessee are not exigible to tax. Even the Hon'ble Bombay High Court in the earlier assessment years has restored the question of taxability of other deposits and income tax refunds for fresh decision by the Tribunal. In the impugned years which are under consideration for penalty proceedings, the Tribunal has confirmed the taxability of interest, which decision had come subsequently, that is much after the fili....
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.... case of Union of India Vs. Dharmendra Textile Processors (2008) 174 TAXMAN 571 and held that, assessee had furnished inaccurate particulars of income, hence liable for penalty u/s 271(1)(c). Accordingly he levied the penalty of Rs. 17,21,427/- for the A.Y. 2007-08 and of Rs. 20,92,925/- for the A.Y. 2006-07. 5. Before the Ld.CIT(A), the assessee reiterated the same explanation and submitted that issue of taxability of interest had always been decided in favour of the assessee by the Tribunal up to the A.Y. 2005-06. Therefore, at the time of filing of return of income the assessee had a bona fide belief that its interest income also falls within the "Principles of Mutuality". Simply because addition has been confirmed in the quantum procee....
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....1(1)(c). 8. Before us learned counsel for the assessee submitted that, the very fact that in the earlier years, the Tribunal in series of decisions have held that interest income earned by the assessee falls within the ambit of Principle of Mutuality and hence outside the purview of taxation, therefore, it cannot be held that the assessee' claim for exemption of tax on interest income is not bona fide as at the time of the filing of return of income, all the Tribunal decisions for the earlier years were in the favour of the assessee. It was only from the year 2010 onwards, this issue has been decided against the assessee. He submitted that once there is a debatable issue with regard to the taxability of a particular income in the case ....
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....time of the assessment for the impugned assessment years has held that such a claim is not allowable on the ground that the question of law on this issue has been admitted by the Hon'ble Bombay High Court. On this premise alone, the interest income was held to be taxable as income from other sources. The Hon'ble Bombay High Court vide judgment and order dated 17.06.2010 decided the issue of taxability of interest in favour of the revenue. Following the said decision of the Hon'ble Bombay High Court vide order dated 24.02.2012, the Tribunal has decided this issue of taxation of interest against the assessee. Now on this background, it has to be seen, whether penalty u/s 271(1)(c) is leviable on such a claim made by the assessee. ....