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2018 (9) TMI 1008
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....learned CIT(A) erred in upholding addition made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 of Rs. 75,00,000/- alleging the same as unexplained share application money. It is submitted that the said amount representing share capital and share premium of Rs. 75,00,000/- was properly explained and on the facts and in the circumstances of the case, the addition is wrong and not in accordance with law. It is therefore, prayed that the said addition requires to be now deleted." 2. Briefly stated facts are that the case of the assessee pertaining to the assessment made u/s 143(3) of the Income Tax Act (hereinafter called as "the Act") framed vide order dated 30.12.2009. While framing the assessment, the A.O. observed that the assessee has received share application money from 5 different entities amounting to Rs. 75 lakhs. The A.O. was not satisfied with the explanation of the assessee, therefore, invoked the provisions of section 68 of the Act for addition of the share application money. The A.O. observed that these notices issued u/s 133(6) of the Act were returned with remark "not found". The A.O. thus made addition of entire amount of Rs. 75 lakhs in the income of ....
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....following grounds of appeal: "That the learned CIT(A) erred in upholding addition made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 of Rs. 25,00,000/- alleging the same as unexplained share application money. It is submitted that the said amount of Rs. 25,00,000/- was properly explained and on the facts and in the circumstances of the case, the addition is wrong and not in accordance with law. It is therefore, prayed that the said addition may very kindly be now deleted. That the learned CIT(A) erred in upholding the A.O's action of disallowing Rs. 87,157/- u/s 14A holding that the assessee has utilised borrowed funds for non-business purposes. It is submitted that on the facts and in the circumstances of the case, the said addition is patently wrong and uncalled for and in any case is highly excessive and requires to be deleted/considerably reduced." 8. For Ground No.1, the Ld. Counsel for the assessee has adopted the same argument as were in ITA No.404/Ind/2012 for the assessment year 2007-08. 9. Ld. D.R. has opposed the submissions and adopted the arguments which were in ITA 404/Ind/2012. 10. Taking into consideration the assessment year....
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.... assessee submitted that the issue is covered in favour of the assessee. 18. Ld. D.R. could not controvert the contention of the Ld. Counsel for the assessee that there was no exempt income during the year under appeal, therefore, respectfully following the decision rendered by Hon'ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT-IV in ITA No.749 of 2014 dated 2.9.2015 and the decision held by Hon'ble Allahabad High Court in the case of CIT Vs. Shivam Motors (P) Ltd. in ITA No.88 of 2014 dated 5.5.2014, we direct the A.O. to delete the disallowance. 19. In ITA No.961/Ind/2012 pertaining to the assessment year 2011-12, the assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming addition of Rs. 828721 out of "Interest" u/s 14A of the Act. 2. On the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the disallowance of Rs. 758272 on account of "Defrayed payment of Employee contribution to ESI and PF". 3. On the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming disallowance of Rs. 58259 of "Interest" paid on l....
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.... Court has held as under: "3. However, taking into consideration, the judgement of this court in the case of assessee itself in D.B. Income Tax Appeal No.150/2016 (Principal Commissioner of Income Tax, Jaipur-2 Vs. M/s. Rajasthan State Beverages Corpn. Ltd.) decided on 4.8.2016 wherein Division Bench observed as under: "5. So far as the question relating to privilege fees amounting to Rs. 26.00 Crores in the instant year as well as the deduction of claim of Rs. 17,80,765/- on account of Provident Fund (PF) and ESI is concerned, the Court has extensively considered the aforesaid two questions in assessee's own case vide judgement and order dated 26.5.2016 referred to (supra) and has held that the privilege fees being a revenue expenditure, is required to be allowed as a revenue expenditure. This court in the aforesaid case has also allowed the claim of the assessee, in so far as payment of PF& ESI etc. is concerned, on the finding of fact that the amounts in question were deposited on or before the due date of furnishing of the return of income and taking in consideration judgement of this Court in Commissioner of Income Tax Vs. State Bank of Bikaner & Jaipur and C....
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....horities were not justified in making disallowance and confirming the same. 28. On the contrary, Ld. D.R. has supported the orders of the authorities below. 29. We have heard the rival contentions and we find that in para 5.1 of the impugned order, Ld. CIT(A) has given finding of facts as under: "5.1 The Assessing Officer has disallowed the interest of Rs. 58,259/- paid on late deposit of TDS and DDT. As these are statutory liabilities of the assessee the same should have been discharged within the stipulated time. This interest has been paid as the assessee is in default. The assessee is not entitled to deduction of tax deducted at source per se, as such the interest paid for the default in payment of tax deducted/deductible at source also does not qualify for deduction. The interest charged on account of late deposit cannot be therefore be allowed. Ground No.3 is dismissed." The above finding of fact is not controverted by the Ld. Counsel for the assessee. The interest has been charged as per the law as the assessee was required to deposit the tax within the stipulated period, any default thereon attracts levy of interest. Such interest cannot be termed as a bus....
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....te the disallowance. 36. Now coming to the appeals filed in penalty proceedings filed by the assessee, we take up appeal in ITA No.752/Ind/2016 for the assessment year 2007-08. The assessee has raised following ground of appeal: "On the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the penalty of Rs. 50,00,000/- imposed by the Ld. Assessing Officer u/s 271(1)(c) of the Act." 37. Briefly stated facts giving rise to this ground of appeal are that u/s 143(3) of the Act, the A.O. made addition of Rs. 75 lakhs in respect of share application money and also initiated penalty proceedings thereon. Subsequently, the A.O. imposed the penalty u/s 271(1)(c) of the Act vide order dated 25.3.2014 of Rs. 50 lakhs. Against this, assessee preferred appeal before the CIT(A). After considering submissions the CIT(A) has dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal. Ld. Counsel for the assessee submitted that the penalty so imposed is not sustainable as the notice issued u/s 271(1)(c) of the Act does not specify the charge. Ld. Counsel reiterated the submissions as made in the written synopsis. The synopsis of the ....
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....imposing penalty u/s 271(1)(c) for concealment or furnishing inaccurate particulars of income in a pre-printed form without striking off the relevant clause has held as defective for non application of mind by the Assessing Officer. The apex court in the case of Ashok Pai reported [2007 292 ITR 11 (SC) has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of Manu Engineering reported in 122 ITR 306 and the Delhi\High Court in the case of Virgo Marketing P. Ltd.,171Taxmn 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non application of mind. Your kind attention is also invited to the decision of the Bombay High Court in the case of CIT vs. L&T Finance Ltd. where it is held tha....
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....Trib.) * CIT vs. Amar Nath (2008) (173 Taxman 395) (P&H) (HC) Case laws in support of various propositions: A. Inaccurate claim different from giving Inaccurate particulars of income: We humbly submit that in case of any inaccurate claim alleged to be made, it cannot be treated as a case of giving inaccurate particulars of income. To elaborate this contention of ours, we place our reliance on the decision of the Supreme Court in case of CIT v. Reliance Petroproducts Pvt. Ltd. (322 ITR 158) wherein it is held that the argument of the revenue that "submitting an incorrect claim for expenditure would amount to giving inaccurate particulars of such income" is not correct. By no stretch of imagination can the making of an incorrect claim in law tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 271(1)(c). That is clearly not the....
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....re possible and when no clear and definite inference can be drawn, in penalty proceedings, penalty cannot be imposed. 6. Alpha Associates Vs. DCIT (66 TTJ 758) (Bom.) It was held that where two interpretations were possible and the AO has taken a view different from that of the assessee, the assessee could not be said to have furnished inaccurate particulars of income and consequently penalty u/s. 271(1)(c) is not imposable. C. Concealment can be only of fact and it cannot be of law It is most humbly submitted that we have not concealed any facts relating to income. If at all there is any concealment, it can be only of fact and it cannot be of law. Under such circumstances, no penalty should be levied. For this proposition reliance is placed on the following cases: * Impulse India (p.) Ltd. vs. ITO (40 ITD 36) (Delhi); * ITO vs. RBGM Modi and Others Ltd. (31 TTJ 550)(Delhi); * Yasmin Properties Ltd (46 ITD 331); * DM Dahanukar v CIT (65 ITR 280) and * ITO vs. Bakul Cashew & Co. (28 ITD 197)(Coch) Further, the Hon'ble Ahmedabad Tribunal in case of Himat Vallanji Karia (36 ITD 76) has held that "Conce....
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.... material or circumstances leading to a reasonable conclusion that the additions made during the assessment represent assessee's income and merely because the particular amount has been assessed as income it is not enough for the purpose of levying penalty. The Hon'ble Court has also observed that mere rejection of the assessee's explanation for the difference between the returned income and assessed income cannot be ipso facto prove that there was concealment and that absence of the evidence acceptable to the Department cannot be equated with fraud or willful neglect. Further, in the case of Gem Granites Vs DCIT (ITA No. 715/Mad/2007) wherein it was held that merely because an addition is confirmed does not ispo facto attract penalty u/s 271(1)(c) of the Act and the onus to prove that there was concealment of income with a view to evade tax is on the Department and that levy of penalty is not automatic and the department has to establish a foolproof case of attracting the penalty. In the recent decision of M/s Jyothy Laboratories Limited Vs DCIT (ITA No. 5447/Mum/05), the Mumbai Tribunal held that where the assessee has claimed expenditure after putti....
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....e or filing inaccurate particulars of income, the Ld. Counsel of the appellant has relied on the notices issued on 30.12.2009,24.12.2010 and 26.12.2001 however from the penalty order it may be seen that before imposing penalty further notice were also issued on 10.03.2014 for the A Y 2007-18,2008-09 and 2009-10 as evident from the penalty orders itself. The relevant para of penalty orders for A Y 2007-08 and 2008-09 read as under: " ... Hence another show cause notice u/s 271 (l)(c ) was issued to the assessee on 10.03.2014 asking as to why penalty should not be levied for furnishing inaccurate particulars of income within the meaning of section 271 (1)(c ) of the IT Act. The date of hearing was fixed on 18.03.2014" The relevant para for the A Y 2009-10 reads as under: " .. .Hence another show cause notice u/s 271 (l)(c) was issued to the assessee on 22.01.2014 asking as to why penalty should not be levied for furnishing inaccurate particulars of income within the meaning of section 271 (1) (c) of the IT Act. The date of hearing was fixed on 29.01.2014. " It can this be seen that charge (i.e. furnishing of inaccurate particulars) was learly speci....
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....income by furnishing inaccurate partuiuclars of his income and committed default as per provisions of Section 271 (l)(c) of the Act .... " 8. That the appellant in grounds of appeal before this Honble Bench has not taken any ground as contended in the hearing on 19.07.2018, The only ground taken by the appellant before this I-Ion'ble Bench reads as under: 9.For A Y 2007-08 10." On the facts and circumstances of the case, ld. CIT(A) erred in confirming the penalty of Rs. 5000000/- imposed by the Ld. AO u/s 271 (l)(C) of the Act" 11.For A Y 2008-09 12." On the facts and circumstances of the case, ld. CIT(A) erred in confirming the penalty of Rs. 1600000/- imposed by the Ld. AO u/s 271 (l)(C) of the Act" 13.For AY 2009-10 14." On the facts and circumstances of the case, ld. CIT(A) erred in confirming the penalty of Rs. 1600000/- imposed by the Ld. AO u/s 271 (J)(C) of the Act" 15. That before the Ld CIT(A) also no such ground was raised by the appellant. 10.That in view of the above it may be submitted that the decisions relied upon by the Ld. Counsel of the appellant are not applicable in the facts a....
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....called ambiguous wordings in the notice impaired or prejudiced the right of the assessee of reasonable opportunity of being heard. After all, section 274 or any other provision in the Act or the Rules, does not either mandate the giving of the notice or its issuance in a particular form. Penalty proceedings are quasi-criminal in nature. Section 274 contains a principle of natural justice of the assessee being heard before levying penalty. Rules of natural justice cannot be imprisoned in any straight-jacket formula. For sustaining a complaint for failure of principles of natural justice on the ground of absence ofopportunity, it has to be established that prejudice is caused to the concerned person by the procedure followed. The issuance of notice is an administrative device [or informing the assessee about proposal to levy penalty in order to enable him to explain as to why it should not be done. Mere mistake in the language used or mere non-striking off of inaccurate portion cannot by itself invalidate the notice. Entire factual background would fall for consideration in the matter and no one aspect would be decisive. In this context useful reference may be made to the following o....
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....rders of the authorities below and considered the rival written submissions. The assessee has challenged penalty order on the ground that there is no specific charge by the A.O. In support of the submissions, reliance is placed on the judgement of the Hon'ble jurisdictional Madhya Pradesh High Court rendered in the case of PCT vs. Kulwant Singh Bhatia (ITA 9 of 2018) and also in the case of SSA's Emerald Meadows. 41. On the contrary, Ld. D.R. has placed reliance on the judgement of the Hon'ble Mumbai High Court in the case of CIT Vs. Smt. Kausalya and Others 216 ITR 660 (Mum). 42. During the course of hearing, Ld. D.R. pointed out that the A.O. had mentioned about the issue of notice dated 10.3.2014 in respect of the assessment years 2007- 08, 2008-09 & 2009-10. However, this notice is not furnished by the revenue. The Ld. Counsel for the assessee has placed reliance on the judgement of the Hon'ble jurisdictional High Court in the case of PCT vs. Kulwant Singh Bhatia (ITA 9 of 2018). The Hon'ble court has held as under: "10. It is submitted that the provision of Section 271(1)(c) together with Explanation 5(A) brings the assessee liable for imposition....
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....bsp; Date: 30.12.2009 To M/s. Industrial Filters and Fabrics Pvt. Ltd. 155, Anoop Nagar, Indore. Whereas in the course of proceedings before me for the A.Y. 2007-08 it appears to me that you:- *Have without reasonable cause failed to furnish me return of Income with you were required to furnish by a notice given under section 22(1)/22(2)/34 of the India Income Tax Act, 1922 or which you were required to furnish under section 139(1) or by a notice given under section 139(2)/148 of the Income Tax Act, 1961, No..................dated ..............or have without reasonable cause failed to furnish it within the time allowed and the manner required by the said section 139(1) or by such notice. *Have without reasonable cause failed to comply with a notice under section 22(4)/23(2) of the India Income Tax Act, 1961 or under section 142(2)/143(2) of the hearing fixed on 16.11.2007. *Have concealed the particulars of your Income or ....................