TaxTMI 
TaxTMI 
2017 (11) TMI 378
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....1961. 2. Whether on the facts and in the circumstances of the case the CIT(A) was right holding that the Revenue Receipts directly taken to the General Reserve fund as capital receipt does not amounts to furnishing inaccurate particulars of income. 3. Whether on the facts and in the circumstances of the case the CIT(A) was right in relying on the decision having different facts wherein the revised return was filed during the assessment proceeding. 4. Whether on the facts and in the circumstances of the case the CIT(A) was right holding that the Ld. Assessing Officer has grossly erred in imposing penalty of Rs. 17,51,000/- 271 (1)(c) of the Act by alleging the concealment or inaccurate particulars of income." Grounds of ITA No. 1030/JP/2016 1. Whether on the facts and in the circumstances of the case the CIT(A) was right in deleting order passed by Assessing officer u/s 271 (1)(C) of Income tax Act, 1961. 2. Whether on the facts and in the circumstances of the case the CIT(A) was right holding that the Revenue Receipts directly taken to the General Reserve fund as capital receipt does not amounts to furnishing inaccurate particul....
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.... Income over expenditure [being exemption denied U/s 10(23C) Rs. 44,27,078/= b) Transfer of General Reserve Rs. 55,83,342/- * Computer bank receipts Rs. 12,500/- * Book Bank Income Rs. 6,05,000/- * Forms/Late fees Rs. 41,50,842/- * Profit on sale of equity share Rs. 8,15,000/- (c) Excess depreciation claim on buses disallowed Rs. 5,68,512/- Out of the above additions, AO considered amounts Rs. 55,83,342/- and Rs. 5,68,512/= for penalty leviable u/s 271 (1) (c) of the Act. The depreciation claimed at higher rate was based on bonafide belief that buses for transportation of students will entails higher rate of depreciation. However, this addition can be said to be a case of addition on account of debatable issue and also on account of genuine difference of opinion between the AO and the Appellant Society, therefore on debatable issue penalty u/s 271 (1)(c) of the Act may not be imposable. In this case, assessee had already made full disclosure of particulars before the AO, accordingly this amount cannot be the subject matter of concealed income or furnishing of inaccurate particulars....
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....ucceed on legal interpretation. Further, it is also submitted that the question of tax sought to be evaded or imposition of penalty does not even arise for the simple reason that in the first place, the Appellant Society after setting off the brought forward losses had its total income at Rs. Nil. Now, I find it a case where assessee has made a claim under a bonafide belief in respect of which full particulars were filed with the return, the disallowance of such claim which was ultimately held to be a wrong claim would not mean that assessee/Appellant Society has concealed the particulars of income or has furnished inaccurate particulars of income so as to warrant levy of penalty. Here in this case, Hon'ble ITAT Bench Jodhpur's decision in case of The Udaipur Central Co- Operative Society Supra) is directly applicable wherein it is held as under: "These are two different omissions or defaults, albeit, they refer to a deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of either 'suppressio veri or suggestio falsy'. By the mere reason of such concealment or of furnishing of inaccurate particulars alone, the....
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....on arising out of the assessment passed by the Assessing Officer for the reason that such additions got set off with the brought forward losses. Considering all these facts and circumstances, we sustain the order of the ld. CIT(A) on this issue. 6.1 Similarly in the case of A.Y. 2012-13, the penalty has been levied and the amount of Rs. 62,60,006/- has been transferred to general reserve for which we have already taken a view that the assessee has made the claim in the return of income and has submitted all relevant documents. Further it was a debatable issue, therefore, in this year also, we sustain the order of the ld. CIT(A). The other issue for levy penalty of Rs. 9,45,825/- was that income over expenditure. The issue was debatable and it was simply a difference of opinion between A.O. and assessee society. The assessee had neither concealed income nor filed inaccurate particulars of income. On this issue also, we agree with the findings of the ld. CIT(A) that this was a debatable issue and there was different opinion on such issue. Considering all these facts, we find no fault in the order of the ld. CIT(A) and accordingly, we sustain the same. 7. In the result, both the....
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....appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., CIT v. Anand Prasad [1981] 128 ITR 388 (Delhi), CIT v. Karamchand Premchand P. Ltd. [1969] 74 ITR 254 (Guj) and CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499 (Guj) [FB]). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. - Jute Corporation of India Ltd. vs. CIT (1990) 88 CTR (SC) 66 relied on." 11. At the time of hearing, the additional ground raised by the assessee was not pressed, therefore, the same stands dismissed as not pressed. 12. The ld. CIT(A) has confirmed the penalty levied by the Assessing Officer by holding as under: "5.5 I have carefully considered the submissions of the appellant as also the findings of the AO. It may be noted that the assesse....
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.... and that for such bonafide claim penalty u/s 271(1)(c) cannot be imposed. Another contention of the appellant is that mere addition of income or disallowance of an expenditure claimed by the assessee will not lead to imposition of penalty u/s 271(1)(c) as also that the rejection of claim of exemption u/s 11 & 12 is a debatable issue and on the debatable issue no penalty can be imposed u/s 271(1)(c). It is also submitted that as per the settled proposition of law where a claim of deduction is made under a bonafide belief then simply on the reasons that such claim is rejected the penalty may not be imposed. For such contentions, the appellant has also relied on various case laws. The appellant further submitted that alter the decision of worthy CIT(A) the appellant has been allowed benefit of carry forward business losses and after such allowance, the positive income is reduced to nil/ negative income and that accordingly on loss income penalty u/s 271 (1)(c) may not be imposed. On careful consideration of all relevant facts, there is no dispute on the fact that the assessee wrongly claimed exemption u/s 10(23)(c) of IT Act when such exemption has not been allowed to the assessee by....
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....e after providing benefit of earlier year business losses etc. is reduced to loss, penalty u/s 271(l)(c) can be imposed. For such finding reliance is placed on the following decisions: a. CIT vs. RMP Plasto Pvt. Ltd. (2009) 313 ITR 397 (SC) b. JCIT vs. Saheli Leasing and Industries Ltd. (2010) 324 ITR 170 (SC) c. Virtual Soft Systems Ltd. Vs. CIT (2007) 289 ITR 83 (SC) Keeping in view of the facts and circumstances discussed above, I am of the considered view that the claim of the assessee u/s 10(23)(c) was not of bonafide nature. Similarly the claim of benefit u/s 11 & 12 was also not of bonafide nature. It is also fact that in respect of such claim rejected by the AO there cannot be any debatable issue or two opinions and therefore the various case laws relied upon by the appellant are not relevant to the facts and findings of the assessee's case. Accordingly, when the assessee was found to have furnished inaccurate particulars of income for Rs. 6075130, penalty u/s 271(1)(c) was imposable. Accordingly the AO has rightly imposed penalty of Rs. 1957310 u/s 271(1)(c) and the same is confirmed." 13. After hearing both the sides on this issue, w....
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....rticulars of income. This shows that the assessee had committed the default as prescribed U/s 271(1)(c) of the IT Act, 1961 and is therefore liable for penalty." We would also state that considering the law laid down by the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC), the penalty cannot be sustained. The Hon'ble Supreme Court has held as under: 10. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. 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 transcript." 11. We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the * [2007] 291 ITR 519 ....