TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 1227
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....aring total income of Rs. 12,23,550/-. However, the assessment u/s. 143(3) of the Act was completed at a total income of Rs. 59,89,670/- In the assessment order, the AO has made the additions of Rs. 34,66,017/- on account of professional income and Rs. 2,76,893/- on account of disallowance of partners salary. The AO has made the disallowance u/s. 14A of the I.T Act 1961 (hereinafter referred to as Act) amounting to Rs. 10,23,474/-. However, the AO has initiated the penalty proceedings u/s. 271( 1) ( c) of the Act for the additions made on account of professional income of Rs. 34,66,017/- and disallowance of partners salary amounting to Rs. 2,76,893/-'. The AO levied the impugned penalty u/s. 271(1)( c) of the Act by observing that the amount of Rs. 34,66,017/- had no relation to mutual funds at all and were actually receipts from professional services. He also observed that there was no provision in the partnership deed relating to payment of salary/commission to the partners and the assessee had admitted this fact, but attributed it to an error of the accountant. He also observed that even by the most benevolent interpretation the érror' reveals a casual and irresponsible a....
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....dded the sum of Rs. 34,66,017/- being a mistake detected and admitted by the assessee. It was contended by the assessee that since the mistake was detected by the assessee while filing details before the AO, the AO had not issued any show-cause notice etc. to the assessee. It was also contended that in the assessment order the AO himself has mentioned that there were certain errors in representation and computation, which were admitted by the assessee. It was submitted that even in the penalty order, the AO has mentioned that the error committed by the assessee reveals its casual and irresponsible attitude towards tax accounting. Therefore, it could not lead to the conclusion that the assessee intentionally has committed such mistakes and that it has concealed the income or filed inaccurate particulars of its income. It was further stated that during the penalty proceedings an explanation was offered before the AO, which was not found to be false or not bonafide. 5. With regard to the disallowance of partners remuneration of Rs. 2,76,893/-, it was submitted by the assessee that during the course of assessment proceedings, it was explained before the AO that the required provision ....
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.... Ltd 122 TTJ 289 (Mum) c. ITO Vs. Parikh Investment & Development P.Ltd 43 SOT 537 (Mum) d. CIT Vs. Tania Investments P.Ltd 322 ITR 394(Bom) e. DCIT Vs. M/s. Sree Gouri Shankar Jute Mills ITA No.945/Kol/2010 dt 21/4/2011 f. Kanbay Software Vs. DCIT ITA No.300/Pn/07 dt 28.4.09,ITAT,Pune The ld.CIT(A) also observed that the Hon'ble SC in the case of Dharmendra Textiles Processors, has held that penalty u/s. 271(1)( c) is a civil liability and 'willful concealment 'and 'mens rea' are not essential ingredients for imposing penalty cannot be read to mean that in all cases where addition is confirmed, penalty shall mechanically follow. If penalty is imposed under such circumstances also there will remain no course open to an assessee to raise disputed claims and as such proposition is beyond recognized cannons of law. 7. The ld.CIT(A) held that in case of the assessee the AO had made the addition on account of professional income and made disallowance on partners' salary. It was explained before the AO that the mistake was committed by the assessee's account by writing the books and such mistake was detected and disclosed by the assessee to the AO while filing the details at th....
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.... Air Express (P) Ltd Vs. ITO, W 9(1), Kol, wherein the Tribunal has held as under: "3. We have heard the rival submissions and carefully considered the same and the penalty order. We noted that u/s. 271(1) ( c) of the Act the penalty can be imposed either for filing inaccurate particulars or concealing particular of income. The AO is required to satisfy the charge for which the penalty is imposed. We have gone through the assessment order as well as the penalty order. We noted that the AO has not initiated penalty in respect of any specific charge nor specified any particular charge while imposing the penalty on the assessee. The AO simply observed that the penalty is leviable u/s. 271(1)( c). The Hon'ble Supreme Court in the case of CIT vs. Atul Mohan Bindal 317 1(SC) has laid down that before imposing the penalty by the AO the Revenue must comply with the conditions as specified u/s. 271( 1) ( c) of the Act. Similar view has been taken by the Hon'ble Supreme Court in the case of Dilip N.Shroff vs. JCIT and Another 291 ITR 519(SC). The Hon'ble Gujarat High Court in the case of New Srathia Engg. Co vs. CIT 282 ITR 642 has laid down that order of penalty must clearly state whether....