9911796707
TMI Blog2009 (6) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... at the non-disclosure of deemed dividend income was on account of ignorance of law and the explanation tendered by the assessee having not been found to be false, there was no justification in levying the penalty under section 271(1)(c) of the Act. 3. The facts giving rise to levy of penalty are stated in brief. The assessee, in his individual capacity, is engaged in the business of supply and replacement of ship parts and accessories. He is also a 99 per cent share holder in a company running in the name and style of M/s. Mars Ship Repairs Pvt. Ltd. During the previous year relevant to the assessment year 2001-02 the assessee appears to have acquired a new bungalow in Juhu and in order to acquire the said property it had taken certain loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 271(1)(c) of the Act on the ground that the assessee has furnished inaccurate particulars of income by not disclosing the deemed dividend assessable to tax. 5. The assessee submitted, in reply, that he was not well informed of the tax provisions, being an Engineer, and even though he was depending on a qualified C.A. for auditing the books of account etc., maintained in his individual capacity as well as in respect of the company the C.A. did not inform him about the provisions of section 2(22)(e) of the Act. Since the assessee was under the bona fide belief that he had taken loan and repaid in a couple of months from a Private Limited Company where he is having 99 per cent shareholding, it does not attract any tax. Moreover, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge of the assessee due to ignorance of law and upon bringing the same to the notice of the assessee, full co-operation was extended in furnishing the facts and thus the bona fide explanation of the assessee ought to have been accepted by the Assessing Officer. It was also contended, relying upon decision of ITAT, Ahmedabad Bench in the case of M.B. Stock Holding (P.) Ltd. v. Asstt. CIT [2003] 84 ITD 542 that profits accrue only at the end of the year and, therefore, the application of section 2(22)(e), by taking into consideration the short period during which the loan was taken before the end of the accounting year, was not in accordance with law. The learned CIT(A) rejected both the contentions of the assessee and confirmed the action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ignorance of law etc., for not disclosing the correct income : (i) Dutron Plastics (P.) Ltd. v. Dy. CIT [1999] 105 Taxman 107 (Ahd.) (Mag.). (ii) Mahadeswara Movies v. CIT [1983] 144 ITR 127 (Kar.). (iii) Kamal Kisore Swami v. ITO [2004] 85 TTJ (Jodh.) 206. (iv) Dy. CIT v. Co-operative Stores Ltd. (Super Bazar) [2002] 74 TTJ (Delhi) 46. (v) Dr. Velayudhan Nair v. ITO [2003] 84 ITD 227 (Bang.). 9. The learned counsel, being apprehensive of the import of the recent judgments of the Apex Court vis-a-vis the shifting of onus on assessee and the nature of liability under section 271(1)(c) of the Act, relied upon the following judgments to submit that even after the decision of the Apex Court in the case of Union of India v. Dharamendra T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer, by relying upon following case law : (i) Asstt. CIT v. VIP Industries Ltd. [2009] 30 SOT 254 (Mum.); (ii) Kanbay Software India (Panchanamas) Ltd. v. Dy. CIT [2009] 31 SOT 153 (Pune). 11. On the other hand, the learned Departmental Representative strongly relied upon the Orders passed by the tax authorities, he submitted that the assessee is the owner of the company, for all practical purposes, and in a well planned manner he had obtained loan from company's funds and returned this loan before the end of the accounting year so that the factum of taking the loan need not be reflected in the documents furnished along with the return of income in his individual capacity. But for the vigilant action of the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of assessment proceedings. 13. The tax laws in this country are so complex and complicated that even a person specializing in this field, including tax administrators, may not understand the law in the correct perspective or a particular provision may go unnoticed because of the number of amendments made to the tax enactments from year to year. Under these circumstances, it would be a travesty of truth and justice to hold that an assessee ought to have known the correct law and comply therewith, even though he was not aware of the provisions. In the case of Kaushal Diwan v. ITO [1983] 3 ITD 432 (Delhi)(TM), the learned Accountant Member observed, on an analogous situation, that the tax provisions are so complex that even ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
