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Showing 361 to 380 of 1183 Records
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2021 (6) TMI 823
Validity of assessment - whether a show cause notice has to be issued prior to finalisation of assessments under the Act? - Petitioner had relied upon an Instruction issued by the Central Board of Direct Taxes (CBDT) bearing No.20 of 2015 dated 29.12.2015 dealing with the subjects 'Scrutiny assessments – some important issues and scope of scrutiny in cases selected though Computer Aided Scrutiny Selection (CASS)' - HELD THAT:- In this case, admittedly, two pre-assessment notices have been issued leading to some exchange of communications inter se the parties. However, no show cause notice crystallizing the issues dealt with in the assessment orders have been crystallised as such and put to the petitioner for rebuttal, prior to completion of proceedings.
CBDT has fairly concluded that principles of natural justice which are enshrined in the procedure for assessment mandate the issuance of a show cause notice prior to finalisation of an order of assessment. The Board refers to Instruction No.3 of 2018 dated 20.08.2018, specifically para 6(vi) thereof relating to AY 2016-17 and the 'E-proceeding' facility available during 2018-19, specifically para (iv)d thereof as well as Circular Number 27 of 2019 dated 26.09.2019 that also reiterate the importance of adherence to the principles of natural justice in the finalisation of proceedings.
In view of the confirmation by the CBDT, an important issue stands settled. Though the Income Tax Act does not anywhere contemplate issuance of a show cause notice prior to finalisation of scrutiny assessments, as a matter of procedure and good office, the Assessing Authority is expected to crystalise the issues arising from the return of income filed by an assessee, the questionnaires issued under Section 142(1) and notices under Section 143(2) and responses thereto, issue a show cause notice setting out the issues, solicit the response of the assessee and pass orders only thereafter, after hearing the assessee concerned.
Writ Petitions are allowed. The orders of assessment in this case shall be treated as show cause notices and the petitioner shall file replies to the same within a period of six (6) weeks from today.
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2021 (6) TMI 822
Acceptable ground for the purpose of entertaining a Writ Petition - power of judicial review of the High Court - Reopening of assessment u/s 147 - as contended that the very initiation of reopening the proceedings under Section 147, issuance of notice under Section 148 and the reasons furnished are untenable and therefore, the assessment order is liable to be quashed - HELD THAT:- This Court is of the considered opinion that the mixed question of fact and law is to be decided with reference to the original documents and evidences by the appellate authority in the present case, as statutory appeal is contemplated under the provisions of the Income Tax Act.
Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy.
It is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. Thus, dispensing with an appellate remedy is to be granted cautiously in view of the fact that the very purpose and object of legislation providing an appellate remedy cannot be diluted nor the benefit be denied to the aggrieved person to exhaust the same. The statutory appellate authorities are the final fact finding authorities. Thus, the finding to be made by such appellate authorities with reference to the documents and evidences are of paramount importance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India.
The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself.
Thus, the finding of such appellate forums would be a valuable assistance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The High Court cannot conduct a rowing enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. Thus, the importance of fact finding by the appellate forums is of more value for the purpose of providing complete justice to the parties approaching the Court of law.
The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming.
The 2nd Writ Petition is filed challenging the original assessment order. Thus, the petitioner is at liberty to prefer an appeal contemplated under the statute for redressal of his grievances by following the procedures.The petitioner is at liberty to prefer such an appeal within a period of four weeks from the date of receipt of a copy of this order.
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2021 (6) TMI 821
Adjustment of demand against refund - HELD THAT:- We are informed that insofar as AY 2003-2004 is concerned, the applicant/petitioner is entitled to refund of ₹ 4,92,69,031 and likewise in respect of AY 2004-2005, the petitioner is entitled to refund of ₹ 7,94,89,178. As against this, we are told, that the demand for AY 2005-2006 is approximately ₹ 2.02 crores.
The assessing officer should have made the adjustment, and passed an appropriate order, in that behalf. Since this suggestion has not been accepted, the captioned application is disposed of, with the following directions:
(i) The concerned officer will ensure that the amount payable on account of refund to the applicant/petitioner for AY 2003-2004 and AY 2004-2005 is remitted to it within 10 days of receipt of a copy of the order, after making adjustment to the demand outstanding against AY 2005-2006.
(ii) That being said, we may note that Ms. Vibhooti Malhotra has not able to tell us as to whether, apart from AY 2005-2006, any other demand is outstanding qua the petitioner. Therefore, in case it is discovered that a recoverable demand is outstanding vis-a-vis the petitioner, the same will be adjusted before releasing any amount as indicated in paragraph 3(i) above, albeit, only after serving a prior notice and giving due opportunity to the petitioner to contest the same.
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2021 (6) TMI 820
Validity of Draft assessment order passed without issuance of a show cause notice u/s 144B - HELD THAT:- As noted the impugned draft assessment order has been issued under Section 143(3) and Section 144C of the Act. This assessment order concerns the assessment year (AY) 2017-2018.
Besides this, the petitioner has also assailed the Standing Order No. 1439(E), dated 31.03.2021, issued by the Central Government, which amended the Standing Order No. 3297(E), dated 25.09.2020, issued by the Central Government in exercise of its powers under Section 250(6C) of the Act.
Issue notice. Mr. Abhishek Maratha accepts service on behalf of the respondents/revenue.
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2021 (6) TMI 819
Rectification u/s 254 - HELD THAT:- This is a miscellaneous application for rectification of mistake apparent from the record, in a miscellaneous application order passed by the ITAT. In this regard, it may be noted that section 254(2) permitting the rectification of mistake is only with regard to the amendment of any order passed u/s 254(1).
The miscellaneous application order passed u/s 254(2) cannot be subjected to an appeal u/s 254(2).In our considered opinion, this miscellaneous application against a miscellaneous application order is not maintainable. In this view of the matter, this miscellaneous application by the assessee stands dismissed. Miscellaneous application by the assessee stands dismissed.
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2021 (6) TMI 818
Revision u/s 263 - disallowance of deduction claimed u/s 10B - HELD THAT:- We notice that there is difference of opinion between the parties on the factual aspects of the claim. While the assessee claims that the granite slabs have been exported after undertaking the activities of sawing, cutting and polishing, the revenue has claimed that the finished granite slabs have been purchased from the market. The revenue’s stand is that the deduction u/s 10B is available only in respect of “manufacture or production” activities. The assessee’s case is that it has produced cut and polished granite slabs. It is also the case of the assessee that the co-ordinate bench of Tribunal has allowed the deduction on the profit realized on export of granite slabs in AY 2006-07 by following the decision rendered by Hon’ble Delhi High Court in the case of CIT Vs. ARR-ESS Exim Pvt Ltd. [2015 (2) TMI 413 - DELHI HIGH COURT]
CIT(A), after noticing above said observations of the Tribunal, has discussed various other case laws to buttress the revenue’s view that the deduction u/s 10B is available in respect of manufacture or production activities. Hence the issue has to be examined independently without having resort to the decision rendered by the co-ordinate bench in AY 2006-07.
Assessee has furnished the Profit and Loss account which show that the assessee has incurred expenses on extraction and quarrying, purchase of blocks and purchase of finished goods.
Assessee has been doing its own processing of raw blocks and has also purchased finished goods. The Hon’ble Supreme Court has held in the case of Arihant Tiles & Marbles P Ltd [2009 (12) TMI 1 - SUPREME COURT] that sawing of marble blocks into slabs and tiles and polishing activities amount to manufacture or production. Hence the assessee should be eligible for deduction u/s 10B in respect of export of granite slabs, which it has subjected to production process. Since the provisions of sec.10B refers to the activity of “manufacture or production”, we are of the view that the assessee shall not be eligible for deduction u/s 10B in respect of profits realised export of purchased finished goods (trading items).
The break-up details of the export turnover between export of granites processed by the assessee and export of purchased items are not available on record. Rather, none has examined this aspect. Hence, this aspect requires examination at the end of AO. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore this issue to the file of the AO for examining the same afresh. We make it clear that the assessee is eligible for deduction u/s 10B of the Act in respect of profits realized on export of granite slabs, which has been processed by it. It shall not be eligible for deduction in respect of profit realized on export of purchased items, i.e., items which has been exported as it is without undertaking any process of sawing blocks into slabs and tiles and polishing - Appeal of the assessee is treated as allowed for statistical purposes.
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2021 (6) TMI 817
Reopening of assessment u/s 147 - AO has expressed the view that the “Provision for Standard assets” cannot be claimed u/s 36(1)(via) - HELD THAT:- AO having allowed the claim of the assessee in the original assessment proceedings, has reopened the assessment on mere change of opinion. Further, the view expressed the AO on the deduction available u/s 36(1)(via) is also, in our opinion, not a correct view The Hon’ble Delhi High Court in the case of Kelvinator of India Ltd. [2002 (4) TMI 37 - DELHI HIGH COURT] has held that the reopening of assessment upon mere change of opinion is not valid in law. Accordingly, we are of the view that there is merit in the contention of the assessee that reopening of assessment is not valid. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and hold that the reopening is bad in law. Appeal filed by the assessee is allowed.
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2021 (6) TMI 816
Unexplained u/s 68 - fresh funds in the form of share application money and share premium amount in the books of assessee company - HELD THAT:- We find no justifiable basis to interfere with the findings of the lower authority as the assessee has failed to provide necessary explanation to the satisfaction of the AO about the genuineness of the transaction including the related matters of valuation and creditworthiness of the investor company. Therefore, the ground of appeal so taken by the assessee is dismissed and the order of the ld CIT(A) is hereby sustained. Appeal of the assessee is dismissed.
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2021 (6) TMI 815
Assessment u/s 153A - Protective assessment - whether the funds lying with the bank accounts as mentioned hereinabove belong to the assessee before us and finally the interest income arising out of those funds can be assessed in the hands of the assessee on substantive basis? - HELD THAT:- The right to make protective assessment is the right to be exercised by the ITO and not the appellate authority. Once addition made on substantive basis in the hands of the sons of the assessee and tax and/or penalty paid thereon the said category of assessment cannot be altered from substantive to protective by indicating the substantive assessment as an error on the part of the Ld. AO merely on the ground that the said income was added on substantive basis in the hands of the assessee.
This proposition and conclusion made thereupon by the Ld. CIT(A) at the appellate proceeding is nothing but an afterthought, without any basis arbitrary, whimsical, erroneous and not sustainable in the eyes of law. This observation made by the Ld. CIT(A) thus may to be expunged. From all corners the Revenue has failed to satisfy us to how the addition in the hands of the assessee at all be sustainable.
By no stretch of imagination the addition made by Revenue on the interests income on substantive basis in the hands of the assessee holding assessee as the owner of the funds of the account only on relying upon the instructions to transfer the fund solely on the basis of surmise and conjecture cannot be said to be justified in the absence of corroborative evidence and/or clinching evidence in support of the same and also on the ground of assessment already made on substantive basis in the hands of the sons of the assessee on the same amount of interest income as narrated hereinbefore. In that view of the matter, the addition under challenge is hereby deleted.
Addition on substantive basis in the hands of the assessee by way of interest on ABN Amro Bank Account bearing NO. 208695A jointly held with grandson of the appellant - HELD THAT:- AO in the assessment proceeding initiated against the assessee added the same income in the hands of the assessee on substantive basis in the similar manner as has been done in respect of the income already assessed in the hands of the sons of the appellant on substantive basis and income was assessed in the hands of the grandson on protective basis. However, the substantive addition made in the hands of Vicky Mehta on this particular amount of income in respect of the year under consideration has not been denied by the Revenue. No evidence is forthcoming so as to substantiate that the income belongs to the assessee and not Vicky Mehta upon whom the income has already been assessed on substantive basis.
Needless to mention that in this case also such addition in the hands of the assessee on substantive basis on the same amount already assessed and added in the hands of the grandson Vicky Mehta on substantive suffers from the principle of double taxation. Relying upon the observation made by us hereinabove on this issue in case of the assessment made in the hands of the sons, we find that the addition by way of interest on ABN Amro Bank Account No. 208695A again in the hands of the assessee is not sustainable in the eye of law and, thus, deleted.
Substantive income returned by the appellant into a protective income - HELD THAT:- It is a settled position of law that before making such order the person concern should be given an opportunity of being heard. Unless the person in whose hand the income is directed to be added on protective basis from substantive basis the direction issued by the appellate authority is an exercise in futility. The completed assessment cannot be disturbed in the manner as has been done by the Ld. CIT(A) in the case in hand. This direction is, thus, patently incorrect in the absence of providing an opportunity to the effected party while discharging judicial functions by the Ld. CIT(A). The matter relying upon the discussion on the identical issue as narrated hereinabove the assessment made by the Ld. CIT(A) in treating the substantive income returned by the appellant into a protective income in his hands is not sustainable in the eye of law and thus the same is hereby expunged.
Addition of interest income from HSBC Account - HELD THAT:- The appellant has applied the exchange rate on the dates the respective interests were credited by the bank and as per the respective ledger furnished before the Revenue. The interest income has been found correct. Thus, the interest income as admitted by the Ld. AO by applying the exchange rate as on 31st March of that year has been rightly rejected by the Ld. CIT(A) and consequently deletion of addition of the difference amount is in our considered opinion just and proper and without any ambiguity so as to warrant interference. Hence, the ground of appeal preferred by Revenue is found to be devoid of any merit and, thus, dismissed.
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2021 (6) TMI 814
Disallowance u/s 14A read with Rule 8D(2) - assessee had earned exempt income in the form of dividend and had made suo moto disallowance u/s 14A - CIT-A had deleted the disallowance of interest made under Rule 8D(2)(ii) of the Rules on the ground that the assessee company is having sufficient interest free funds in its kitty - HELD THAT:- It is a fact on record that the assessee is having sufficient interest free funds in the form of share capital and reserves to the tune as on 31.3.13 which is evident from the bare perusal of the financial statements for the respective period and that the same is much more than the investments made by the assessee. Hence by applying the ratio laid down by the Hon’ble Jurisdictional High Court in the case of HDFC Bank Ltd [2014 (8) TMI 119 - BOMBAY HIGH COURT] and in the case of Reliance Industries Ltd [2019 (1) TMI 757 - SUPREME COURT] we hold that no disallowance of interest need to be made under Rule 8D(2)(ii) of the Rules.
Disallowance under Rule 8D(2)(iii) of the Rules, the ld AR argued that the disallowance already made by the assessee was much more than disallowance warranted under third limb of Rule 8D(2) of the Rules. We are inclined to agree with the same. Hence we direct the ld AO not to make any disallowance u/s 14A of the Act other than the suo moto disallowance already made by the assessee in the return of income, both under normal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. Accordingly, the Ground No. 1 raised by the revenue is dismissed.
Disallowance of business loss on account of NSEL and also treating the said loss as speculative loss - whether the loss arising on the impugned transaction could be construed as speculative loss specifically? - HELD THAT:- We hold that the loss arising on account of payment made to NSEL through registered broker towards purchase of commodities (which were never delivered to assessee) , shall be allowable as regular business loss u/s 28 of the Act. We further hold that the said loss cannot be construed as speculative in nature. Accordingly, we do not find any infirmity in the order of the ld CITA in this regard.
Interest income on fixed deposits - Addition under the head Income from other sources or assessee’s claim to be taxed under the head Income from Business - HELD THAT:- CIT-A had categorically given a finding that the investment in fixed deposit made with ICICI Bank has got an inextricable link with the business activity of the assessee and hence the interest income thereon is required to be taxed only as business income.
CIT-A also recorded the fact that the ld AO himself had accepted this fact in Asst Year 2015-16 u/s 143(3) of the Act. With regard to resjudicata in income tax proceedings, we find that the ld CIT-A had stated though the principle of resjudicata does not apply to income tax proceedings, but the principle of consistency cannot be given a go by.
Reliance in this regard was placed on the decision of Hon’ble Jurisdictional High Court in the case of CIT vs Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT] and case of Radhasoami Satsang vs CIT [1991 (11) TMI 2 - SUPREME COURT] Hence we do not find any infirmity in the said order of the ld CITA granting relief to the assessee. Accordingly, the Ground No.1 raised by the revenue is dismissed for the Asst Year 2016-17.
Disallowance made u/s 14A of the Act read with Rule 8D(2) of the Rules - HELD THAT:- CIT-A had also recorded a categorical finding that the ld AO had not recorded any objective satisfaction having regard to the books of accounts of the assessee, as to why the claim made by the assessee that no expenditure has been incurred other than for the purpose of earning exempt income, is incorrect. This objective satisfaction with cogent reasons are required to be recorded in terms of section 14A(2) of the Act read with Rule 8D(1) of the Rules.
This issue is no longer res integra by the decision of the Hon’ble Supreme Court in the case of Maxopp Investments [2018 (3) TMI 805 - SUPREME COURT] thereon. We find that the ld CITA had also granted relief on this count by placing reliance on the decision of Hon’ble Delhi High Court in the case of Eicher Motors Ltd vs CIT [2017 (9) TMI 1043 - DELHI HIGH COURT] on which, we find no infirmity. Hence the Ground No. 2 raised by the revenue is dismissed.
Adjustment of brought forward business loss and unabsorbed depreciation of Asst Year 2014-15 against the business income of the assessee - HELD THAT:- We have already held in assessee’s own case for the Asst Year 2014-15 hereinabove that the business loss would be allowable as business loss u/s 28 of the Act. Hence the said loss would be eligible to be carried forward to subsequent years in terms of section 72 and 32 of the Act to be set off with the business income or other income, as the case may be. We find that the ld AO had primarily dismissed the claim of the assessee since he had already disallowed the business loss in Asst Year 2014-15 - But the said disallowance has already been deleted by us in Asst Year 2014-15. Hence this ground is effectively consequential in nature. The ld AO is hereby directed to allow the set off of losses from Asst Year 2014-15 after giving effect to our tribunal order for Asst year 2014-15 and whatever loss that is available to the assessee thereafter, should be allowed to be carried forward to subsequent years and allowed to be set off against future business income. Accordingly, the Ground No. 3 raised by the revenue is dismissed.
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2021 (6) TMI 813
Disallowance u/s 36(I)(iii) - assessee company has advanced huge amounts to related concerns and to many other shareholders and that the assessee did not have any trading relations with the above two companies and also with the shareholders - disallow the proportionate interest paid by the assessee on the ground that the interest free advances were not for the purposes of assessee's business - HELD THAT:- We find that the assessee's contention of its own interest free funds being much more than the advances made as interest free loans needs verification - we deem it fit and proper to set aside the issue to the file of the Assessing Officer for denovo consideration in accordance with law. Needless to mention that the assessee shall be given a fair opportunity of hearing we find that the assessee's contention of its own interest free funds being much more than the advances made as interest free loans needs verification. In view of the same, we deem it fit and proper to set aside the issue to the file of the Assessing Officer for denovo consideration in accordance with law. Needless to mention that the assessee shall be given a fair opportunity of hearing.- Decided in favour of assessee for statistical purposes.
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2021 (6) TMI 812
Reopening of assessment u/s 147 - assessee had shown fixed assets but he had not offered any income from the said property except agriculture income - HELD THAT:- As decided in M/S FATEH SOFTECH PVT. LTD. VERSUS INCOME TAX OFFICER, WARD-1 (4) [2021 (5) TMI 957 - ITAT CHANDIGARH] merely possession of a fixed asset does not mean that the assessee might have earned any income from the said asset which would have escaped assessment. Admittedly the assessee owns agricultural land where upon certain construction has been made by the assessee. It has been used for its own purposes.
The reasons recorded by the Assessing Officer do not disclose that the assessee has used any of his assets for any business or rental purposes. The formation of belief by the AO in this case regarding the escapement of income of the assessee view is based on just assumptions and presumptions and there was no reliable material available with the AO to form the belief that the income of the assessee had escaped assessment. In this view, reopening of the assessment in this case, in my view is bad in law and the same is therefore quashed. Appeal of the assessee is allowed
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2021 (6) TMI 811
Exemption u/s 11 - grant of registration u/s. 12AA - appellant company made an application in Form No. 10A for grant of registration u/s. 12A - HELD THAT:- As carefully gone through the MOA, we found that the appellant company is formed to provide reemployment to ex-servicemen etc. On perusal of clause set out in Memorandum of Association, we are unable to discern clause creating an interest in property in favour of the public for any of the object listed u/s. 2(15) which is sine qua non for creation of charity - we may point out that covenant in the MOA does permit the appellant company to distribute the profits in the form of dividend amongst its members and does not set out a condition that the income earned by the appellant company shall be deployed for the objects of the company. - This would make the appellant company a commercial organization.
However, the view of the ld. CIT (Exemption) that the appellant company is a commercial organization merely because it is generating huge revenue from year to year with mark-up on the cost of 10% to 12% cannot be upheld. CIT (Exemption) had not considered the matter in proper perspective.
The matter should be remanded back to the file of the ld. CIT (E) for de-novo consideration of application on the touchstone of law laid down by in the case of Ananda Social and Educational Trust [2020 (2) TMI 1293 - SUPREME COURT] after giving due opportunity of being heard to the appellant. Grounds of appeal raised by the assessee are partly allowed for statistical purposes.
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2021 (6) TMI 810
Enhancement of income as provided u/s. 251(2) - Power of CIT(A) - Assessee argued as not providing a reasonable opportunity of show cause against such enhancement - HELD THAT:- CIT(A) has not adhered to the provisions of section 251(2) of the Act. The Ld. AO has also passed an ex-parte order due to the non-cooperation of the assessee. We hereby remit back the entire matter back to the file of the Ld. AO for de novo consideration. At the same breath, hereby caution the assessee to promptly cooperate before the Ld. Revenue Authorities failing which they shall be at liberty to pass appropriate order in accordance with law and merit based on the materials on record.
Appeal of the assessee is allowed for statistical purposes as indicated.
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2021 (6) TMI 809
Exemption u/s 80G - assessee trust is religious in nature in exclusion to other activities - HELD THAT:- Whole conclusion derived on a shaky ground is damp squib in the absence of any definite fact in this regard. Consequently, the second plea raised on behalf of the assessee that certain expenditure tabulated in page 3 of the CIT(E)'s order fall outside the ambit of religious activity is not being examined at this stage. No such plea has been dealt with by CIT(E). If the plea raised on behalf of the assessee having regard to the nature of expenses is found to be true, the threshold limit of incurred expenditure not exceeding 5% of its total income as stipulated u/s 80G(5B) will not be breached and therefore the adverse inference drawn against the assessee trust would not be sustainable in law.
The order of the CIT(E) dated 19.06.2018 is set aside and the entire matter is restored back to the file of the CIT(E)/Competent Authority for de novo consideration in the light of facts available on record as well as fresh facts that may come to the light or pointed out to him by the assessee trust.
It shall be open to the assessee trust to place all arguments and evidences in corroboration, as may be deemed necessary, in support of its application for approval 80G pending before the Competent Authority. Pertinent here to observe that the fair opportunity shall be granted to the assessee trust before coming to the conclusion as directed. Competent Authority shall make every possible endeavor to dispose of the application for approval u/s 80G in question within 3 months from the date of service of this order. The assessee trust shall extend full co-operation in speedy disposal of the matter without any demur. Appeal of the assessee is allowed for statistical purposes.
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2021 (6) TMI 808
Penalty levied u/s 271(1)(c) - Addition on estimated basis - HELD THAT:- AO Imposed penalty under section 271(1)(c) of the Act on ad–hoc basis without adducing any evidence on record for concealment of income. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad–hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income.
We find support from the series of decisions by different High Courts as well the decision of the Co–ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law - Appeal filed by the assessee stands allowed.
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2021 (6) TMI 807
Penalty u/s 271(1)(c) - addition made by the AO on the basis of information received from the Sales Tax Department - unexplained expenditure under section 69C - HELD THAT:- AO imposed penalty u/s 271(1)(c) on ad–hoc basis without adducing any evidence on record for concealment of income. Penalty u/s 271(1)(c) is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad–hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income.
We find support from the series of decisions by different High Courts as well the decision of the Co–ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of law.
Departmental Authorities has not brought any cogent material to prove otherwise warranting interference at the instance of the Revenue. In this view of the matter, we are of the considered view that the learned Commissioner (Appeals) was indeed justified in deleting the penalty, as there was no concealment of income on the part of the assessee have been proved by the Revenue and additions made on estimation by the Assessing Officer do not call for initiation of penalty. Revenue’s appeal is dismissed.
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2021 (6) TMI 806
Penalty u/s 271(1)(c) - Unexplained expenditure u/s 69C - Commissioner (Appeals) has restricted the addition @ 5% of such purchases/accommodation entries - HELD THAT:- AO imposed penalty under section 271(1)(c) on ad–hoc basis without adducing any evidence on record for concealment of income. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad–hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income.
We are of the considered view that the Commissioner (Appeals) was indeed justified in deleting the penalty, as there was no concealment of income on the part of the assessee have been proved by the Revenue and additions made on estimation by the AO do not call for initiation of penalty. Consequently, we uphold the order passed by the Commissioner (Appeals) by dismissing the grounds of appeal raised by the Revenue.
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2021 (6) TMI 805
Levy of penalty u/s 271(1)(c) - Defective notice issued u/s 274 - computation of short-term capital gain - HELD THAT:- We find, the assessee, in the instant case, during the course of assessment proceedings had surrendered an income for the computation of short-term capital gain which amount was received by him on 13th December, 2011 by cheque and which relates to A.Y. 2012-13. The assessee had paid tax on the above amount. As further to be noted that the assessee had surrendered the above income before it was detected by the Department although only statutory notices had been issued. The Hon’ble Supreme Court in the case of PricewaterhouseCoopers, [2012 (9) TMI 775 - SUPREME COURT] while deleting the penalty upheld that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars.
We find, the assessee in the instant case had received an amoun on 13th December, 2011 which relates to A.Y. 2012-13 and, therefore, we find merit in the argument of the ld. counsel for the assessee that non-inclusion of the same while computing the income for A.Y. 2014-15 is only an inadvertent and bonafide error which the assessee came to know later on and had voluntarily offered the income and paid tax.
A perusal of the notice issued u/s 274 r.w.s. 271 shows that the inappropriate words in the said notice have not been struck off. The coordinate Benches of the Tribunal following the decisions cited by the ld. Counsel for the assessee (supra) are consistently taking the view that where the inappropriate words in the penalty notice has not been struck off and notice does not specify as to under which limb of the provisions the penalty u/s 271(1)(c) has been initiated, then, levy of penalty u/s 271(1)(c) of the Act is not sustainable and has to be deleted - Appeal filed by the assessee is allowed.
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2021 (6) TMI 804
Bail application - Money Laundering - proceeds of crime - possession of moveable and immoveable assets - misuse of official position - Section 13(2) read with Section 13(1)(e) of the P.C. Act - HELD THAT:- Continuing with the detention of the appellant to face the trial in the present case would not serve the cause of justice. Even if the appellant had earlier not appeared, the fact of the matter remains that he had faced trial in the P.C. Act matter and his appeal remains pending.
The High Court, in the impugned order dated 25.11.2020, declined the bail at the given stage but directed the Trial Court to proceed with the trial on day-to-day basis and also gave liberty to the appellant to apply for bail afresh, if trial did not conclude within six months from the date of production of copy of its order. The fact remains that this appeal is being considered today by this Court only after six months from the date of order of the High Court but, what to say of conclusion, the trial is practically at the very initial stage with even the statement of the first prosecution witness remaining incomplete. Looking to the nature of case and the witnesses to be examined, the trial and is bound to take time. On the other hand, the appellant is said to be in custody since 27.11.2019.
While setting aside the impugned order dated 25.11.2020, the appellant is ordered to be released on bail on such terms and conditions as deemed fit and necessary by the Trial Court - appeal allowed.
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9911796707
