2026 (2) TMI 761

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....assessment years 2008-09 to 2010-11 and 2014-15. 2. Since all these matters pertain to the same assessee arising from the same factual matrix, these matters were heard together as a matter of convenience and are being disposed of by way of this consolidated order. With the consent of the parties, the Revenue's appeal for the assessment year 2008-09 is considered as a lead case, and the decision rendered therein shall apply mutatis mutandis to the other appeals. As the Revenue, in all the appeals before us, has raised identical grounds, the grounds raised by the Revenue in its appeal for the assessment year 2008-09 are reproduced as follows, for ready reference: - "1. Whether on the facts of the case and in law, the Id. CIT(A) has erred in deleting the penalty levied by the AO for concealment of income, when the penal proceedings were initiated consequent to reassessment proceedings u/s 147 of the Act. 2. Whether on the facts of the case and in law the Id. CIT(A) has erred in basing his decision to delete the penalty u/s 271(1)(c) by determining whether 'malafide' was involved or not, when the provision does not give any leverage for determining the inte....

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....), as it stood at the relevant point of time, DZ Bank AG was not required to file the income tax return under section 139(1) of the Act, as the tax deductible under Chapter XVIIB was duly deducted from such income. The return of income was filed in the name of "DZ Bank-India Representative Office". Subsequently, vide notice dated 30/03/2015 issued under section 148 of the Act, proceedings under section 147 of the Act were initiated. In response to the notice issued under section 148 of the Act, the assessee filed its return of income on 29/04/2015, declaring interest income amounting to Rs.72,28,20,467 taxable at 10% under Article 11 of the India-Germany Double Taxation Avoidance Agreement ("DTAA") and claimed the exemption of commitment fees amounting to Rs.7,63,758 under Article 5 read with Article 7 of the IndiaGermany DTAA. Accordingly, the assessee declared a total income of Rs.7,22,83,047 vide its return of income filed on 29/04/2015. Subsequently, the assessee filed its revised return of income on 12/08/2016, whereby the interest income declared earlier was reduced to Rs.38,52,04,210. Vide order dated 24/02/2017, passed under section 143(3) read with section 147 of the Act, ....

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....ed CIT(A) further held that there is no mala fide or any attempt to take any undue benefit of the law when the additional income was disclosed by the assessee. Accordingly, the learned CIT(A) held that without prejudice to the right of the AO to initiate penalty under section 271(1)(c) of the Act depending on his independent satisfaction on the basis of facts and circumstances, it is decided not to impose the penalty under section 271(1)(c) of the Act on the incremental figure of income declared by the assessee. 8. In the meanwhile, pursuant to the notice issued under section 274 read with section 271(1)(c) of the Act, the AO vide order dated 21/03/2019 passed under section 271(1)(c) of the Act, disagreed with the submissions of the assessee that it was not required to file the return of income as mandated by section 115A of the Act and held that in the return of income filed by the assessee in response to notice under section 148 of the Act, the assessee declared interest income and commitment fees. The AO further held that by not including the various income, namely, interest income, the assessee had filed inaccurate particulars of income. Accordingly, finding the case to be f....

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....ted from such income. As noted above, the Coordinate Bench of the Tribunal, vide order passed in quantum proceedings, found no fault in the aforesaid submission of the assessee in terms of the provisions of section 115A(5) of the Act. Therefore, in view of the aforesaid facts, we do not find any merit in the submissions of the learned Departmental Representative ("learned DR"), that since the assessee filed the return of income only after the notice issued under section 148 of the Act, the penalty is impossible, in terms of the provisions of Explanation-3 to section 271(1)(c) of the Act. 12. It is further pertinent to note that in its return of income filed by the assessee pursuant to the notice issued under section 148 of the Act, the assessee declared the interest income and offered the same to tax at the rate of 10% under Article 11 of the India-Germany DTAA. Further, the commitment fees earned by DZ Bank AG were claimed as exempt under Article 5 read with Article 7 of the India-Germany DTAA. However, the AO vide order passed under section 143(3) read with section 147 of the Act disagreed with the submissions of the assessee and taxed the entire income at the rate of 40% by t....