2015 (5) TMI 513 - AT - Income Tax

Penalty u/s 271(1)(c) - furnished wrong particulars of its income in terms of profits u/s 115JB - Computation of Minimum Alternate Tax (MAT) - Held that - During the original assessment proceedings obviously the appellant had furnished wrong particulars of its income in terms of profits u/s 115JB of the Act. Even during the course of reassessment proceedings the appellant did not explain/clarify such facts and figures as nobody attended on behalf of the appellant. Similarly during the penalty proceedings also nobody attended on behalf of the appellant and any explanations/ clarifications were not submitted. During the appellate proceedings also the appellant has not furnished complete facts and figures. Hence it cannot be concluded that the appellant had filed complete particulars of its income during the original assessment proceedings from which the appellant s correct income could have been computed. Neither any explanations/ clarifications were furnished during the reassessment proceedings. It is only on account of the reopening of the assessment that correct income of the appellant has been assessed. Thus the computation of book profit under section 115JB on the part of the appellant was inaccurate. The he case of the appellant is fully covered by clause (A) of the above Explanation-1 to section 271 (1)(c) - Decided against assessee.

Summary

Issues Involved:
1. Imposition and confirmation of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Alleged concealment of income and furnishing of inaccurate particulars of income by the assessee.
3. Reopening of assessment under Section 147 of the Act.
4. Computation of book profits under Section 115JB of the Act.
5. Non-furnishing of complete facts and figures by the assessee during various proceedings.

Detailed Analysis:

1. Imposition and Confirmation of Penalty under Section 271(1)(c):
The assessee is aggrieved by the order dated 23/08/2013 of the First Appellate Authority, Mumbai, confirming the penalty of Rs. 6,67,394/- imposed under Section 271(1)(c) of the Income Tax Act, 1961. The penalty was levied due to the alleged concealment of income and furnishing of inaccurate particulars by the assessee.

2. Alleged Concealment of Income and Furnishing of Inaccurate Particulars:
The counsel for the assessee argued that there was neither concealment of income nor furnishing of inaccurate particulars. However, the Departmental Representative defended the imposition and confirmation of the penalty. The Tribunal noted that the assessee did not provide any explanation or clarification during the original assessment, reassessment, or penalty proceedings, and failed to substantiate the figures used in the computation of book profits under Section 115JB.

3. Reopening of Assessment under Section 147:
The original assessment was completed on 28/12/2006, determining a loss of Rs. 88,21,642/- under the normal provisions of the Act. The case was reopened under Section 147 on the grounds that the assessee had a taxable profit of Rs. 86,81,543/- as per the books of account, which was not correctly computed. The reassessment order was passed under Section 144 read with Section 147 on 29/09/2011, assessing the income under Section 115JB.

4. Computation of Book Profits under Section 115JB:
The Tribunal observed that the assessee's computation of book profits was inaccurate and did not follow the provisions of Explanation-1 to Section 115JB. The correct computation should have started with the net profit as per the profit and loss account, followed by specific adjustments. The assessee's failure to provide accurate figures and explanations led to the reassessment, which correctly assessed the book profit at Rs. 86,81,543/-.

5. Non-furnishing of Complete Facts and Figures:
Throughout the proceedings, the assessee did not furnish complete facts and figures. The Tribunal noted that the assessee's failure to provide explanations and clarifications at any stage indicated that the assessee had furnished inaccurate particulars of income. The Tribunal agreed with the First Appellate Authority that the penalty under Section 271(1)(c) was justified as the assessee did not voluntarily provide accurate information.

Conclusion:
The Tribunal upheld the penalty imposed under Section 271(1)(c), agreeing with the First Appellate Authority that the assessee had furnished inaccurate particulars of income and failed to provide any explanation or clarification during the assessment, reassessment, or penalty proceedings. The appeal of the assessee was dismissed, and the order was pronounced in the open court on 24/04/2015.