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2014 (12) TMI 481 - HC - Income TaxLevy of penalty as per Explanation-I Section 271(1)(c) - Company has gone into liquidation and the Official Liquidator has been appointed - Whether the Tribunal was correct in law in allowing the appeal of the assessee in holding that the assessee had discharged the onus cast upon it under Explanation-I Section 271(1)(c) – Held that:- The word "concealment" would refer to somewhat malicious and mala fide conduct on the part of the assessee - The expression "inaccurate particulars" is copiously wider and broader and would include cases where particulars furnished are not accurate and which results in avoidance or evasion of tax - the assessee in Schedule-16 "General Expenses" of the profit and loss account had shown a debit on account of loss on sale of the fixed assets - the assessee had incurred losses was indicated in Schedule-16 of the profit and loss account - it is plausible for the assessee to urge that material facts were submitted and stated in the original return. Whether the assessee has been able to show that his conduct was bona fide – Held that:- All claims or deductions wrongly made cannot be treated as bona fide and protected by Explanation 1 to section 271(1)(c) of the Act - In cases where interpretive skills and divergent views are plausible, penalty for concealment should not be imposed - the assessee had claimed loss on account of sale of plant and machinery i.e. the fixed assets, in the profit and loss account - an assessee would normally rely upon legal opinion of a Chartered Accountant, who is required to audit accounts of the company and also submit an audit report, but penalty cannot be deleted on guise or pretence of legal opinion as a smokescreen and façade - the contention of the assessee cannot be accepted that all claims howsoever untenable, once certified by a Chartered Accountant or the Directors of the company, cannot be made a subject matter of penalty proceedings - most of the income tax returns are accepted without scrutiny or regular assessment and self-compliance of tax provisions is a rule required to be followed, the same is decided in COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] - the assessee had not filed revised return voluntarily, but had filed the revised return after the AO confronted the assessee and they were asked to explain how and why loss on account of sale of fixed assets was claimed in the profit and loss account – the levy of penalty is upheld u/s 271(1)(c) – Decided against assessee.
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