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2014 (1) TMI 31 - AT - Income TaxPenalty u/s 271(1)(c) - Loss on exempt income cannot be set-off against taxable income - Held that:- True and full disclosure, i.e., assuming so, is by itself not sufficient to escape penalty u/s.271(1)(c) - The requirement of law as per Explanation 1(B) to the provision, couples with a condition that the assessee is able to substantiate its explanation and proves it to be bona fide - The assessee offers no explanation, so that its case falls under Explanation 1 (A) to the provision - The mere fact that a baseless claim was raised by some over-enthusiastic assessees who sought a double allowance or that such claim may perhaps have been accepted by some authorities is not sufficient to attribute any ambiguity or doubt as to the true scope of the provisions as they stood earlier - The paper return was required to follow the e-return as per the new procedure, was filed on 13.11.2007, i.e., within the prescribed period of 15 days of the filing of the e-return - As per the Board Circular the assessee was entitled to furnish all the reasons and disclosures in support of its claim per the return of income for the year, on 29.09.2008 - This was admittedly not done - Even the computation of the total income was not filed - The assessee had not availed of the first opportunity to make full disclosure in terms of the Board Circular and, thus, the same must be deemed to be per its return of income for the year - The first instance on which proper disclosure, was made only vide the assessee's letter dated 28.08.2009 which was in response to the requisition dated 13.08.2009, and upon hearing on 17.08.2009 - The assessee cannot be said to have furnished any explanation, rather, contrary to it, cannot be considered as an explanation in law, and that in any case the assessee can only be considered as having failed to substantiate its explanation - Explanation 1(A) or 1(B) is applicable in such case - Penalty levied at minimum was sustained - Decided in favour of Revenue.
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