TaxTMI 
TaxTMI 
2020 (8) TMI 730
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.... notice dated 12.03.2015? 2. Whether the penalty imposed u/s. 271(1)(c) of the Act for the Assessment Year 2012-13 is sustainable in law despite the complete disclosure of the sale of windmills and vacant lands in the financial statements which formed part of the annual report and return of income? 3. Whether the penalty under consideration is sustainable on the debatable issue on the reporting of capital gains pertaining to the sale of wind mills and vacant lands? 3. We have elaborately heard M/s. S. Yogalakshmi, learned counsel for the appellant/assessee and M/s. K.G. Usha Rani, learned Standing Counsel appearing for the respondent/revenue. 4. The assessment for the year under consideration, AY 2012-13 was completed under Section 143(3) of the Act by order dated 12.03.2015. During the course of the scrutiny assessment, the Assessing Officer noticed that the assessee had sold two landed properties at Kalapatti and Dharapuram and the capital gain was worked out for both the properties at Rs. 1,37,31,142/-. However this was not admitted by the assessee in the return of income. Further, the Assessing Officer found that the sale of windmill amounting to Rs. 21,....
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....der dated 25.09.2015 levied minimum penalty of 100%. 5. Aggrieved by such order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)[CIT(A)]. Apart from reiterating the stand regarding the bonafide inadvertent mistake, the assessee submitted that the entire Unit of the assessee has been sold by the bankers, that the assessee did not even have an office space to function, that the assessee had disclosed the relevant details regarding the sale of the lands and windmill in their annual report, which was published and that there was no concealment to the said effect. The CIT(A) rejected the stand taken by the assessee and held that there was concealment of income and penalty was leviable and accordingly confirmed the order of the Assessing Officer. Aggrieved over such order, the assessee preferred an appeal before the Tribunal reiterating the stand that there was no willful concealment of particulars and prayed for deleting the penalty. The Tribunal took note of the submissions, more particularly, the submission that it was an inadvertent mistake and rejected the same, after noting the conduct of the assessee and accordingly confirmed the order passed by....
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..... CWT [(1980) 122 ITR 114] 10. Acit Circle-4(1) Visakhapatnam V. Sri Ganta Srinivasa Rao Visakhapatnam. [2016 SCC ONLINE ITAT 1631] II- Penalty set-aside for invoking two limbs of Section 271 (1) (c) of IT Act by AO: 1. CIT vs. SSA Emerald Meadows [(2016) 73 taxmann.com 248 (SC)]. 2. CIT V. Manjunatha Cotton and Ginning Factory [(2012) SCC OnLine Kar 8862] 3. CIT vs. SSA Emerald Meadows" [in ITA No. 380/2015 (Kar)] 4. Ventura Textiles Vs CIT [(2020) SCC Online Bom 709] 5. S Chandrasekar Vs ACIT [(2017) SCC Online Kar 853] 6. Gayathri Exports VS ACIT [ITA 640/2015 (Kar HC)] 7. SHRI S P PRASAD V. ACIT [(2018) - ITA 170/2010 (Kar HC)] 8. CIT v. Virgo Marketing (P) Ltd. [2008] 171 Taxman 156 9. CIT v. Manu Engg. [1980] 122 ITR 306 10. Pr. CIT vs. Smt. Baisetty Revathi - [2017] 398 ITR 88 (Andhra Pradesh HC) 11. Nayan C. Shah vs. Income Tax Officer ITA No.2822/ Ahd/2011 12.Muninaga Reddy vs. Assistant Commissioner of Income Tax ITA NOS. 251/2016 & 390/2016 (T-IT) 13. Safina Hotels Private Limited vs. CIT ITA No.240/2010 III- Sec 271 (1) (C) of IT Act - Conc....
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....essee at any point of time and now canvassing for the first time before this Court cannot be a substantial question of law. The learned Standing Counsel referred to the return of income filed on 26.09.2012 and pointed out that under the head 'capital gains', the assessee has shown 'Nil' in all the columns. That apart, the assessee never filed a revised return and for the first time, the assessee admitted to do so on 1st March 2017 when the matter was before the Tribunal. This will clearly establish that the conduct of the assessee is not bonafide. Further it is submitted that the penalty proceedings cannot be set aside merely on the ground that the return of income and the assessed income was a loss. In this regard, placed reliance on the decision of the Hon'ble supreme Court in CIT vs. Shree Chowatia Tubes (India) (P) Ltd. [(2017) 80 Taxmann.com 388]. Further, it is submitted that the non-disclosure of the capital gains came to light based on the annual information report and that is how the Assessing Officer came to know that the sale of the land and windmill were not admitted by the assessee in the return of income, which led to issuance of notice under Section 143(2) of the Act....
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....f time and for the first time before this Court such a contention is advanced. The submission of the learned counsel is that this, being the question of law, can be raised. We do not agree with the submission for more than one reason. Firstly a defect in the notice, if according to the assessee would result in a jurisdictional error, is not merely a pure question of law, but a mixed question of fact and law. If such is the position, the vigilant assessee, more particularly, a listed Company like the assessee before us should point out the factual issue at the very first instance. If that was not done by the assessee, then it goes to show that the assessee was not prejudiced by the use of the expression 'or'. 9. This very question was considered in the case of Sundaram Finance Ltd., wherein an identical submission was made by the assessee by placing reliance on Manjunatha Cotton and Ginning Factory. The Court taking note of the fact that the authorities concurrently rejected the explanation offered by the assessee and refused to interfere with the factual finding. In paragraph 16 of the judgment, the argument regarding the defective notice was considered and answered against the ....
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....ny such contention regarding the validity of the notice. 11. M/s. S.Yogalakshmi, learned counsel for the appellant strenuously contended that the assessee acted bonafidely, voluntarily disclosed the details, that there was no intention to suppress the material, that the sale of lands and windmill were disclosed in the annual report and that without considering this aspect, the Assessing Officer has levied penalty. 12. Among the decisions relied on, emphasis was laid on the decision in the case of CIT vs. Pricewaterhouse Coopers Pvt. Ltd. To answer this issue, it would be first necessary to examine the factual position and to assess the conduct of the assessee, which is being projected as being absolutely bonafide. The return of income was filed by the assessee on 26.09.2012. A notice under Section 143(2) was issued on 13.08.2013 for which there was no response and the Assessing Officer issued notice Section 142(1) dated 09.09.2014 calling for details. The assessee submitted their reply dated 22.09.2014 in which, admittedly no information was disclosed about the sale the lands and windmill. On 03.03.2015, a letter was filed by the assessee, which is in response to the notice u....
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.... One more attempt made by the assessee was 24 months after the assessment were completed by attempting to file a revised statement of income on 01.03.2017. This statement can never improve the case of the assessee nor exonerate them from penalty. Another contention advanced by M/s.S.Yogalakshmi is that the Assessing Officer had not recorded his satisfaction that penalty proceedings have to be initiated, by relying to the decision in the case of D.M.Manasvi to support the argument that the enire circumstances should have been considered, more particularly, the financial distress to which the assessee was thrown. 14. We have carefully perused the penalty order dated 25.09.2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. The decisions relied on by the assessee were also taken note of and each of the decisions was dealt with. The Assessing Officer placed reliance on the decision of the Hon'ble Supreme Court in Mak Data P. Ltd vs. CIT-II [(2018) 38 taxmann.com 448 (SC)] and stated that voluntary disclosure does not release the assesee from mischief of penalty proceedings und....
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....tered Accountant was dismissed. The operative portion of the judgment of the High Court of Bombay in [(2019) 103 taxmann.com 207(Bom) is as follows: 2. We are unable to agree for more than one reason. The assessee is a Firm. It was throughout being advised and represented by a Chartered Accountant. The Tribunal rightly proceeded on the basis that a Chartered Accountant is deemed to be aware of the law and its intricacies. Being a professional, he could not have committed a mistake as was attributed to him. The tax paid is undisputedly an inadmissible expenditure from the profits of the business. Hence this amount should have been statutorily added back. Further, from the computation of income, the assessee added back certain inadmissible expenditure. However, he excluded the amount of income tax paid to the extent of Rs. 48,90,114/-. Thus, the addition was only partial and not full. Unless and until the legal provision then in force permitted exclusion of the amount of income tax already paid, the Chartered Accountant could not have done this. The Chartered Accountant cannot feign ignorance of Section 40(ii) of the Income Tax Act as he is well trained and well versed in la....