TMI Blog2014 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... rone to make - Absence of due care does not mean that the assessee is guilty of either furnishing of inaccurate particulars or attempting to conceal its income – Thus, penalty u/s 271(1)(c) could not be levied – Decided in favour of Assessee. - ITA No.549 /AHD/2013 - - - Dated:- 7-6-2013 - G C Gupta and Anil Chaturvedi , JJ. For the Appellant : Shri M G Patel For the Respondent : Shri D K Singh Sr. DR. ORDER:- PER : Anil Chaturvedi This appeal of the Assessee is directed against the order passed under section 271(1)(C) by the ACIT, Circle-8, Ahmedabad on 30.03.2011 for assessment year 2006-07 and confirmed by CIT(A). 2. The facts as culled out from the order of lower authorities are as under. 3. The Assessee electronically filed its return of income on 1.12.2006 declaring total income at Rs. 51,46,607/-. The assessment was framed under Section 143(3) vide order dated 16.12.2008 wherein the disallowances namely disallowance on account of loss on assets written off Rs. 4,37,708/- and disallowance on account of software expenses of Rs. 67,200/- was made. The disallowances made by the Assessing Officer was confirmed by CIT(A) in the exparte order dated 26.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the judgment of the Supreme Court in the case of Dharamendra Textile Processors [306 ITR 277] has been overruled by the Supreme Court itself in case of Rajasthan Spg. Wvg. Mills [23 DTR 158 (SC)] is distinguished to say that the ratio laid down is required to be properly understood. I have gone through this judgment in favour of revenue [23 DTR (SC) 158) and the conclusive remarks are, ".....Decision in Dharamendra Textile cannot be said to hold that s.11AC would apply to every case of non-payment or short-payment of duty regardless of the conditions expressly mentioned in the section for its application; if the notice under s. 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under s.11A(1) there is a legally tenable finding to that effect then the provision of s. 11 AC would also get attracted." Further, at Page No. 159 (Supra), ".....The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of s. 11 AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncealed income. This is also not the normal practice, practiced in the department in such penalty cases. In the facts and circumstances of this case and the ratio laid down by different judgments in similar cases, I order the AO to restrict the penalty u/s. 271 (1) (c) of the I. T. Act, 1961 to 100% of concealed income i.e. to Rs. 1,69,951/-. The appellant, I therefore, gets relief of Rs. 3,39,902/-. The appeal is accordingly partly allowed. 4. Aggrieved by the aforesaid order of CIT(A) the assessee is now in appeal before us. 5. Before us the learned A. R. submitted that the assessee had disclosed loss on sale assets in schedule 10 to the profit and loss and a copy was also placed at page 17 of the paper book. The learned A.R. pointed out that the two losses were shown separately while finalizing the return of income, loss on sale of assets of Rs. 33,994/- was disallowed but through oversight the loss on sale of assets written off Rs. 4,37,708/- was not disallowed. It was a bona fide mistake on the part of the assessee. With respect to the software expenditure, the learned A.R. submitted that during the year under consideration software expenditure of Rs. 1,68,000/- was incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him, then in that case penalty shall not be imposed. It is well settled that assessment proceedings and penalty proceedings are separate and distinct and the finding in the assessment proceedings cannot be regarded as conclusive for the purposes of the penalty proceedings. 9. In the present case the assessee had disclosed the material facts before the AO and CIT(A). When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof. What is to be seen is whether the said claim made by the assessee was bona fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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