TaxTMI 
TaxTMI 
2008 (12) TMI 232
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....o the extent of only Rs. 2,84,38,390 as against the claim of Rs. 7,97,26,616. As per the AO, assessee attracted the penalty provisions by deemed concealing the particulars of income by way of claiming the expired investment allowance. In this connection, AO initiated penalty proceedings in respect of the amount of Rs. 1,38,56,714 by setting off the 'said amount, i.e., unabsorbed investment allowance of M/s A.K. Structural Firm Ltd. (AKSF) even though the same has lapsed in the year relevant to asst. yr. 1996-97 itself. Accordingly, the AO levied the penalty of Rs. 59,11,936 under s. 271(1)(c) of the Act. 3. Aggrieved with the above, the assessee filed the appeal before the CIT(A). Assessee submitted that AKSF amalgamated with assessee company by an order of BIFR w.e.f. 1st April, 1991 and accordingly, loss of AKSF is available to the assessee company for the full period of 8 years for the benefit of carry forward or set off of the said unabsorbed investment allowance as per s. 32 of the Act. As per the assessee, the said period of 8 years needs to be counted from the year of amalgamation i.e., 1st April, 1991 in view of the order of the BIFR. Further, assessee informed that this i....
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.... year only and consequently, the said loss is allowable for set off against the income of the instant asst. yr. 1997-98. To sum up the above, the case of the assessee is that the assessee is under the bona fide belief that the assessee gets full eight years period from the year of amalgamation and, therefore, the bona fide belief of the assessee has not been disproved by the AO and therefore, the assessee cannot be deemed furnishing the inaccurate particulars or concealment of income. 5. We have heard the rival submissions and perused relevant orders of the Revenue authorities as well as the paper book filed in this regard. We have also examined various provisions relied on by the assessee. There is no dispute on the facts and figures relating to the claim of brought forward investment allowance and the dispute is restricted to whether there are provisions in the IT Act directly or indirectly through the mechanism of BIFR for the assessee to support the assessee's claim of the unabsorbed investment allowance of age of more than 8 years or not. Further, the assessee's belief that the period of 8 years commences from the year of amalgamation is a bona fide belief or not in the light....
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....ent of the assessee that it has been specifically specified in the BIFR order or the scheme that amalgamated company shall be entitled to carry forward of the unabsorbed investment allowance upto 8 years. We therefore are of the view that the amalgamated company shall only be entitled for the carry forward of unabsorbed investment allowance subject to fulfilment of other conditions upto the remaining period of eight years." (C) Further, we have also perused the provisions of s. 72A sub-s. (1) read as under: "72A. Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or de-merger etc.-(1) Where there has been an amalgamation of a company owning an industrial undertaking or a ship or a hotel with another company or an amalgamation of a banking company referred to in cl. (c) of s. 5 of the Banking Regulation Act, 1949 (10 of 1949) with a specified bank, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the amalgamated company....
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....ion) Act, 1976 (33 of 1976) for the time being in force or in the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than this Act.' (2) Where there has been under any scheme under this Act an amalgamation of a sick industrial company with another company, the provisions of s. 72A of the IT Act, 1961 (43 of 1961), shall subject to the modifications that the power of the Central Government under that section may be exercised by the Board without any recommendation by the specified authority referred to in that section, apply in relation to such amalgamation as they apply in relation to the amalgamation of a company owning an industrial undertaking with another company." Provisions of SICA and any Rules or schemes made under that Act shall have effect notwithstanding anything inconsistent therewith contained in any other law with the exception of the provisions of FERA, 1973 and Urban Land (Ceiling and Regulation) Act, 1976. Whereas, under the provisions of sub-s. (2) of s. 32, the provisions of s. 72A of the IT Act, shall be subjected to the modifications that the power of Central Government may be exe....
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....pired investment allowance in the instant assessment year against the express provisions of the Act, in this regard, we proceed to examine if the explanation for the said wrong claim is bona fide or otherwise. From the impugned order, we find that CIT(A) deleted the penalty by holding, without qualifying, that there is nothing to suggest the gross or wilful negligence or fraud by the assessee and relied on apex Court judgment in the case of Mussadilal Ram Bharose in this regard. Further, learned counsel also relied on various judgments to advance his pleas that the assessee is under the bona fide belief while making the said claim. In this regard, we have already examined whether there is any information in the order of the BIFR, the provision of SICA and s. 72A or s. 32A of the IT Act or any other provision under other statutes m favour of the assessee. There is no provision or order in favour of the assessee to suggest that the assessee is entitled to claim the said expired loss beyond eight years. Therefore, the answer is negative and against the assessee. Thus, the claim is patently wrong and such wrong or false claim cannot avoid penalty. Although every wrong claim should not ....
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.... refers to cases where the explanation offered by the person is not found false outright, but those cases which are other than such outright false explanation cases. These are diagnosed by the following symptoms. They are: (i) such person is not able to substantiate the explanation offered; and (ii) such person is not only fails to prove that the such explanation is bona fide but disclosed all the facts relating to the such explanation and material to the computation of his total income. 10. On comparison, the assessee's case is found covered by the cases of group (B) above and the onus is on the assessee to substantiate the explanation or prove the bona fide and also the responsibility of full disclosure of all the facts relating to the explanation and materials as stated above. Per contra, the AO is not under obligation to prove the wilful attempt of the assessee in matter of concealment or the explanation of the assessee in this regard is not bona fide. Thus, it is the assessee's responsibility to meet the above requirements. Wilful concealment is not an essential ingredient for attracting civil liability for such a penalty under s. 271 (1)(c). The above view is fortified by th....