TMI Blog2009 (6) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that as per the procedure prescribed under law the burden is not cast upon the assessee to annex the copy of the books of account along with return of income. It is also not the case of the Revenue that the return of income and the annexure thereto are not as per the requirements of the provisions. Merely because loan was cleared within the year and thus do not find place in the Balance Sheet, one cannot jump to the conclusion that the assessee withheld the information till an enquiry was made during the course of assessment proceedings. 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 [ 1982 (11) TMI 74 - ITAT DELHI-A] , the ld AM observed, on an analogous situation, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 loan from M/s. Mars Ship Repairs Pvt. Ltd. In other words the aforementioned company was closely-held company in which the assessee is a 99 per cent shareholder along with his wife who was holding the remaining 1 per cent share. The bungalow at Juhu was purchased for a consideration of Rs. 1,31,98,750 (including the expenditure towards stamp duty). The assessee obtained loan of Rs. 33 lakhs in his personal capacity from the above company. A sum of Rs. 11,98,750 was also paid by the company towards stamp duty. The amount of advance, taken by the assessee from the company, was repaid in the same financial year and, thus, the factum of taking the loan did not figure in the final balance sheet filed along with the return of income of the assessee. The ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tarily; only after the enquiry was made by the Assessing Officer, fund for acquiring property was found to be taken from a closely held company in which the assessee s share was 99 per cent. Therefore, the Assessing Officer concluded that the assessee had concealed particulars of his income/not disclosed correct particulars of income and, accordingly, levied a minimum penalty at the rate of 100 per cent of tax sought to be evaded. 7. Aggrieved, assessee contended before the CIT(A) that the possibility of inclusion of certain income as deemed dividend under section 2(22)( e ) of the Act was not in the knowledge 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 lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the decision of the Apex Court in the case of Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 penalty cannot be levied automatically merely because an addition is made to the returned income, when an assessee files an explanation which is bona fide and, so long as it is not found to be false, the burden placed upon the assessee, under Explanation 1 to section 271(1)( c ) of the Act, can be said to have been discharged. According to learned counsel the burden shifts upon the revenue to prove that the non-disclosure of a particular income is a conscious act of the assessee and the explanation of the assessee is false. 10. Reverting to the facts of the case, the learned counsel submitted that the income-tax is a complex legislation undergoing frequent changes and even a professional, leaving aside a non-technical person, cannot be said to be fully equipped with the knowledge of the latest amendments and thus the dictum ignorance of law is no-excuse cannot be applied to a default under the tax provisions and thus the explanation of the assessee cannot be said to be false merely because the assessee did not voluntarily furnish the source from which amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the annexure thereto are not as per the requirements of the provisions. Merely because loan was cleared within the year and thus do not find place in the Balance Sheet, one cannot jump to the conclusion that the assessee withheld the information till an enquiry was made 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 he was not aware of the provision in question till the matter was placed before the Bench. Similar view was taken in the case of WTO v. S.P. Jaya Kumar [1983] 3 ITD 221 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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