AI Drafter 
TaxTMI 
TaxTMI 
2016 (12) TMI 1185
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....ated on 31-3-2011 by the A.C.I.T Circle-5 Baroda bad in law and cancelled. (2) The learned C.IT (A) has erred in conforming penalty order u/s 271(1)(c) of the Income Tax Act of Rs. 1,13,430/- for A.Yr. 2006-07. On the facts and circumstances of the case that penalty u/s 43-B on trading receipt is not applicable in respect of exempted u/s 65 Sub Section 27 of Service-Tax is not liable for Service and Service-Tax is not liable to the Govt. Authority. The learned C.IT is levied penalty "Concealed The Particulars of its income and furnished inaccurate particulars is not justified". (3) The learned C.IT (A) has wrongly conclude that penalty is leviable for Service-Tax payable on without deciding for exempted u/s 65 Sub Section 27 of Service-Tax Act and the liability for the Trading receipts for exempted amount u/s 43-B of the Income Tax Act has not accrued on the facts and circumstances of the appellant submits that conclusion learned by the C.IT (A) is erroneous. (4) The C IT(A) wrongly conclude that raising a legal plea would not make the false one when the facts are fully disclosed in the accounts mere rejection claim does not that the furnished inaccurate ....
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....l Rs. 18,68,543/- In this connection the assessee explained to the assessing officer that Shri Dilip J Patel was having current account balance of Rs. 25,69,842 and debit balance of petrol pump account Rs. 823754/ and further loan of Rs. 16,68,544 was taken from HDFC bank for purchase of two trucks. The assessing officer stated that the payment was made in carting of Dilip J. Patel which was not the expenses of the assessee. Accordingly, interest disallowances @ 12% on Rs. 18,68,543/- was made at Rs. 2,24,225 and added to the total income of the assessee. The Ld. Commissioner of Income Tax(A) has restricted this disallowance to Rs. 24,000/- stating that the loan amount raised from the HDFC by Shri Dilip J Patel cannot be treated as the interest free advance from the assessee against the credit balance in the current account. 4.2 The assessing officer has initiated penalty proceedings on income of Rs. 3,36,959(Rs.312959+Rs.24000) stating that the assessee has furnished inaccurate particular particulars of income. Thereafter the assessing officer had levied penalty of Rs. 1,13,430/- u/s 271(1)(c) of the act. 5. Aggrieved against the penalty order of the assessin....
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....e". What the AO means that by furnishing inaccurate particulars of income, that true quantum of income has not been shown or has been 'concealed' by the appellant and the quantum of income concealed is the income in respect of which tax was sought to be evaded. There is a difference between "concealment of income" and "concealment of particulars of income". The former is a general expression and refers to the failure to returning the correct income and the later is the specific charge mentioned in section 271(1)(c) and refers to the, failure to produce factual material on the basis of which the Assessing Officer can compute correct income. Considering all these facts, the technical grounds as raised by the appellant are hereby rejected. Thus, the ground of appeal no. 4 of the appellant is dismissed. 5.2 As per ground of appeal no. 5 (i.e. ground of appeal no, 5 which is raised by the appellant on legality of order), the show-cause notice issued by the AO along with the assessment order is vague, capable of two views, not certain as to the nature of offence if any and since show cause notice goes to the root of levy of penalty, the penalty levied is bad in law and v....
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....s not found to be tenable. The fact is that the appellant had collected total Service Tax of Rs. 20,21,750/- and out of which he had paid only an amount of Rs. 17,08,15Q/- and thus the remaining amount of Rs. 3,36,959/- was stilt lying with the appellant. This amount was not credited by the appellant to the Profit & Loss account. The provisions of section 271(l)(c) of the IT Act are attracted in the case of appellant in case if he had collected Service Tax and has failed to pay the same to the Government account and such amount of Service Tax has also not been credited to the P&.L account. In my opinion, the AO has correctly relied upon decision of Hon'ble High Court of Bombay in the case of CIT Vs Bassein Metals Pvt. Ltd., 263 ITR 518. The relevant part of decision of Hon'ble High Court of Bombay is reproduced hereunder for reference: "2. Assesses is a private limited company engaged in the business to manufacture of non-ferrous alloys. During the" course of a ssessment, the Assessing Officer noticed that an amount of Rs. 9,90,953 was collected by the assessee. However, it was not credited to P&L a/c. In reply to a query, the assessee submitted that it had maintai....
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....hs, which was on account of sales-tax collected by the assessee for the last quarter of the relevant accounting year ending 30th June, 1983. The amount was payable within 30 days from end of the quarter. The deduction claimed by the assesses was disallowed under section 43B, which was inserted in the statute w.e.f. 1st April, 1984. The assessee filed an appeal to the CIT(A) against the disallowance. That appeal was dismissed. The Tribunal also dismissed the appeal following the judgment of the Delhi High Court in the case of Sanghi Motors v. Union of India [1991] 187JTR 7032 and Escorts Ltd. v. Union of India [19911 189 ITR 811. It was held by the Supreme Court that in view of the proviso to section 43B of the Income-tax Act, and sum payable by way of tax or duty, etc., liability for which was incurred in the previous year, Was allowable as deduction if it was actually paid by the due date of filing the returns under section 139(1) of the Income-tax Act The Supreme Court found, on facts, that the assessee had actually paid the tax collected before the due date of furnishing the returns under section 139(1) of the Income-tax Act This fact is very important In the present case, the s....