TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 163
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....sequential demand notice dated 31.03.2023 (Annexure-11) issued under Section 156 of the Income-tax Act, 1961 by the Respondent No. 1; c. To issue writ of mandamus and/or any other appropriate writ to declare that disallowance of deduction in respect any surcharge of cess which is not allowable as deduction under Section 40 then in terms of Section 155(18) of the Act for the purpose of levy of penalty under Section 270A of the Act the same shall be considered as under- reported income and therefore immunity from Imposition of penalty as envisaged under Section 270AA of the Act shall not be denied if an assessee qualifies conditions as enumerated under sub section (1) and (2) of Section 270AA of the Act d. Allow the writ petition with costs; e. Grant any other relief as deemed to be fit and proper under the facts and circumstances of the case." 2. The facts, not in dispute, are that the petitioner is a public limited company and engaged in execution of turnkey infraprojects. The petitioner-company is regularly filing its income tax return as per applicable provisions of Income Tax Act, 1961 (hereinafter referred as 'the Act'). 3. The petitioner-company filed return of....
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....come Tax Act was issued to the petitioner-company. Being aggrieved with the same, the petitioner-company has filed this writ petition. 5. Reply to the writ petition has been filed on behalf of the respondents, wherein preliminary objection regarding maintainability of the writ petition is raised on the ground of availability of alternative remedy of filing an appeal. The respondent-department has also justified its action in passing the impugned order dated 31.03.2023 and the impugned notice dated 31.03.2023. 6. Learned counsel for the petitioner has submitted that though the impugned order dated 31.03.2023 passed under Section 270A of the Act is appelable under Section 246A of the Act but as the impugned order has been passed in violation of principle of natural justice and in contravention of the statutory scheme of the Act, the petitioner-company has invoked the extraordinary powers of this Court under Article 226 of the Constitution of India. 7. It is argued that issue raised by the petitioner-company in this petition is purely legal and does not require any investigation into the facts, the writ petition filed by the petitioner-company under Article 226 of the Constitution ....
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....eported in case the assessee makes an application to the assessing officer in the prescribed form and within the prescribed time, requesting for recomputation of total income of the previous year without allowing the claim for deduction of surcharge/cess and pay the amount of tax due thereon within specified time. 11. Learned counsel has further argued that the benefit of allowable deduction of education cess was claimed by the petitioner-company when it was permitted as per law, however, as soon as the amendment under Section 155 of the Act was introduced by way of inserting sub-section (18), the petitioner-company immediately suo moto withdrew its claim for cess amounting to Rs. 12,85,58,982/- to buy mental peace and to avoid litigation and levy of penalty etc. vide letter dated 19.03.2022. In such circumstances, it cannot be said that the petitioner-company has concealed any fact or misrepresented. In the above circumstances, it cannot be said that the petitioner-company has under-reported the income by way of misreporting. 12. It is further argued that penalty under Section 270A of the Act can only be levied if an assessee misrepresent its income in consequence of misreportin....
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....on into facts and the question raised by the petitioner in this writ petition is only this that whether the petitioner-company is entitled to claim benefit of immunity from imposition of penalty under Section 270A of the Act or not. The Hon'ble Supreme Court in M/s Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority and Ors. (supra) has held that where the controversy is purely legal one and does not involve disputed question of fact but only question of law, then it should be decided by the High Court instead of dismissing the writ petition on the ground of alternative remedy. The relevant portion of the decision is reproduced hereunder: "8. That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2 SCC 724 (State of Uttar Pradesh & ors. vs. Indian Hume Pipe Co. Ltd.) and (2000) 10 SCC 482 (Union of India vs. State of Haryana). What appears on a plain reading of the former decision is that whether a certain item falls within an entry in a sales tax statute, raises a pure question of law and if investigation into facts is unnecessary, the high court could entertain a writ petition in its discretion even though the a....
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....resentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. 270AA. Immunity from imposition of penalty, etc. (1) An assessee may make an application to the Assessing Officer to grant immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C or section 276CC, if he fulfils the following conditions, namely:- (a) the tax and interest payable as per the order of assessment or reassessment under sub-section (3) of section 143 or section 147, as the case may be, has been paid within the period specified in such notice of demand; and (b) no appeal against the order referred to in clause (a) has been filed. (2) An application referred to in sub-section (1) shall be made within one month from ....
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....fficer to grant immunity from imposition of penalty under Section 270A and initiation of proceedings under Section 276C or under Section 276CC of the Income Tax Act on fulfillment of the conditions of sub-section (1) of Section 270AA after the expiry of the period of filing the appeal if the proceeding has not been initiated against the assessee under the circumstances referred to in sub-section (9) of Section 270A. 23. Sub-section (4) of Section 270AA provides that the assessing officer shall pass an order accepting or rejecting any application filed by the assessee seeking immunity from imposition of penalty under Section 270A within a period of one month from the end of month in which the application under sub-section (1) is received. 24. In the case of Schneider Electric South East Asia (HQ) Pte Ltd. (supra), Delhi High Court has held as under: "6. Having perused the impugned order dated 09th March, 2022, this Court is of the view that the Respondents' action of denying the benefit of immunity on the ground that the penalty was initiated under Section 270A of the Act for misreporting of income is not only erroneous but also arbitrary and bereft of any reason as in the p....
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.... petitioner has satisfied the aforesaid conditions, inasmuch as, (i) the tax has been paid on the additions; (ii) appeal has undisputedly not been filed; and (iii) penalty (as would be evident from the penalty notice) has been initiated on account of "underreporting" of income." 26. In Rohit Kapur VS. Principal Commissioner of Income Tax-7, New Delhi & Anr. (supra), Delhi High Court has held as under: "12. Before proceeding further, it is relevant to refer to Sub-section 4 of Section 270AA of the Act, which reads as under: 270AA xxxx xxxx xxxx The Assessing Officer shall, within a period of one month from the end of the month in which the application under sub-section (1) is received, pass an order accepting or rejecting such application: Provided that no order rejecting the application shall be passed unless the assessee has been given an opportunity of being heard. xxxx xxxx xxxx 13. The proviso to Sub-section (4) of Section 270AA of the Act makes it amply clear that before an application of rejected, the applicant must be given an opportunity of being heard. In the present case, there is no dispute that the petitioner was not afforded the said opportunity. ....