TMI Blog2013 (8) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable, but has not been accepted, unless the assessee had not disclosed facts before the authorities. Such cases have to be distinguished from cases where the claim of the assessee is farcical or farfetched. Dubious and fanciful claims under the garb of interpretation, are a mere pretence and not bonafide - assessees had not carried out the work but had sub-contracted the same to a third party/parties - Tribunal has not referred to the Explanation to Section 80IA as to why and on what basis divergent interpretations were possible. Absurd or illogical interpretations cannot be pleaded and become pretence and excuses to escape penalty. “Bonafides” have to be shown and cannot be assumed. In the present case, the respondents have not been able to discharge the said onus and establish that they had acted bonafidely - Decided in favour of Revenue. - ITA 480/2012 - - - Dated:- 29-7-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Appellant : Mr. Rohit Madan, Advocate. For the Respondent : None. ORDER Sanjiv Khanna, J. (Oral) 1. These two appeals by the Revenue arise out of a common order of Income Tax Appellate Tribunal dated 25.11.2011 in the case of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271 (i) (c) of the Act. The Assessing Officer has not been able to establish that the claim of the assessee for deduction under section 801A of the Act was not bona fide. A mere rejection of the claim of the assessee by relying on difference interpretations does not amount to concealment of the particulars of income of furnishing inaccurate particulars thereof by the assessee. Hon ble Apex Court in CIT V. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158/189 Taxman 322, after considering various decisions including Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxman 218 (SC) and Union of India V. Dharmendra Textile Processors [2008] 306 ITR 277/174 Taxman 571 (SC) concluded that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Following this decision, Hon ble jurisdictional High Court in M/S Dharpal Premchand (Supra) upheld the cancellati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The said explanation reads as :- Explanation 1- Where in respect of any facts material to the computation of the total income of any person under this Act:- (A) Such person falls to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B)Such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bone fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 8. Penalty under Section 271(1)(c) of the Act is imposed when an assessee has concealed his income or furnished inaccurate particulars. In terms of the explanation quoted above, we have to examine whether the case falls within sub-clause (A) or (B) and the effect thereof. Sub-clause (A) applies when the assessee fails to furnish any explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarificatory explanation was inserted by the Finance Act, 2007 with retrospective effect from 01.04.2000. The CIT (Appeals) in the first appellate order has specifically mentioned that the Finance Act, 2007 received the Presidential assent on 11.05.2007 [(2007) 291 ITR (St.) 1]. The returns of income were filed by M/s. HCIL Kalindee ARSSPL (JV) and M/s. HCIL ARSSPL Triveni (JV) on 01.11.2007. An amendment of this nature invariably attracts attention and is seldom missed. Such amendments become topic of discussion and conversation in the professional circles. To show and establish bonafides, the assessees had to show some more tangible material or basis as to why a clear statutory provision which excludes works contracts was ignored. 12. We are not stating or holding that penalty for concealment can be imposed and is justified merely because interpretation or claim of the assessee is rejected. For interpretation and understanding tax laws assessees necessarily and do rely on professional or expert opinion and they cannot be subjected to penalty when the assessee discharges the onus that the claim was bonafide [see Devsons Logistics Pvt. Ltd. vs. CIT (2010)329 ITR 483 (Del.) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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