TMI Blog2009 (8) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer has nowhere contradicted that the error was not inadvertent, matter need not be interfered. - 1005 of 2008 - - - Dated:- 24-8-2009 - A. K. SIKRI and VALMIKI J. MEHTA JJ. Ms. Prem Lata Bansal with Ms. Anshul Sharma and Paras Chaudhary for the appellant. R. M. Mehta for the respondent. JUDGMENT The judgment of the court was delivered by 1. A. K. Sikri J.-In this appeal we are concerned with the decision of the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal" for short) which has upheld the decision of the Commissioner of Income-tax (Appeals) deleting the penalty of Rs. 13,18,151 imposed by the Assessing Officer in exercise of his powers contained in section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the "the Act" for short). The penalty proceedings came to be initiated by the Assessing Officer under the following circumstances : 2. The respondent-assessee filed the income-tax return declaring income at Rs. 1,21,03,280 on November 30, 1996. During the assessment proceedings, the Assessing Officer noticed that the assessee had claimed deduction of Rs. 21,02,228 under section 35D of the Act being 1/10th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) who allowed the appeal and set aside the penalty order passed by the Assessing Officer. The Commissioner of Income-tax (Appeals) was of the opinion that all the facts had been duly disclosed by the assessee in the return of income and therefore, it was not a case of furnishing inaccurate particulars for concealing any income chargeable to tax. He was of the opinion that in order to invoke the provisions of section 271(1)(c) conscious concealment was necessary. No doubt, the initial burden of proof was on the assessee but if that was discharged, no penalty was leviable unless the explanation is found to be fantastic or without any basis. In the opinion of the Commissioner of Income-tax (Appeals), only a mistake had occurred on the part of the assessee in respect of the assessee in respect of Rs. 6,45,070 which was corrected by it during the course of the assessment proceedings on its own as was clear from the assessment order. Further, in the prospectus for issue of public shares it was clearly mentioned by the statutory auditor, namely, M/s. N. D. Kapoor and Co. that the expenses incurred in connection with the public issue of shares, such as underwriting commission, brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, etc.-(1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person-. . . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or . . . Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purpose of clause (c) of this sub-section be deemed to represent the income in respect of which particulars have been concealed." 10. It is repeatedly held by the courts that the penalty on the ground of concealment of particulars or non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced the same to 35 per cent. We are of the opinion that the Commissioner of Income-tax (Appeals) as well as the Tribunal rightly observed that there was no concealment of income or furnishing of inaccurate particulars. The addition was only on account of difference in estimate made by the assessee and the other estimate made by the Assessing Officer. Therefore, in so far as this claim is concerned, even if the Assessing Officer reduced the same from 50 per cent. to 35 per cent., that cannot attract the penalty. 14. A sum of Rs. 21,02,228 under section 35D of the Act was disallowed by the Assessing Officer. This, according to the assessee, was made on the basis of the opinion given by the chartered accountants, which is clear from the prospectus for public issue of shares in which it was clearly mentioned that the assessee-company would be entitled to relief under section 35D of the Act. Expenses were incurred in connection with the public issue of shares such as underwriting commission, brokerage and other charges, etc., which, as per the opinion of the chartered accountants, qualify for amortization over a period of 10 years under section 35D of the Act. The submission of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x laws, could give such an opinion having regard to the plain language of section 35D of the Act. It would be important to note that the assessee has nowhere pleaded that the return was filed claiming the benefit of section 35D of the Act on the basis of the said opinion. What was stated was that in the prospectus it was mentioned that as per the opinion given by the chartered accountants, the company would be entitled for relief under section 35D of the Act. There-fore, it is not the case of the assessee that while filing the return it got assistance from the chartered accountants who opined that the aforesaid expenses qualify for amortization over a period of 10 years under section 35D of the Act. That apart, when we find that it is not a case where two opinions about the applicability of section 35D were possible. Therefore, it cannot be a case of a bona fide error on the part of the assessee. As has been pointed out above, the relief available under section 35D of the Act to a finance company is ex facie inadmissible as that is confined only to the existing industrial undertaking for their extension or for setting up a new industrial unit. It was, thus, not a "wrong claim" pref ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
