9911796707
TMI Blog2012 (10) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... vide his order dated 29.3.2010 after giving due opportunity to the assessee. 4. Assessee filed appeal against such imposition of penalty and submitted before first appellate authority that under similar circumstances and on identical grounds of additions in assessment year 2006-07, the same CIT(A) has dropped penalty u/s 271(1)(c) of the Act and by filing copy of such order before first appellate authority and relying upon various case laws including the decision of Delhi Bench, ITAT in the case of Standard Chartered Grindlays Bank Limited vs. DDIT (International Taxation) and Director of IT (International Taxation vs. ANZ Grindlays Bank (2010) 127 TTJ (Trib) 319 and CIT vs. Reliance Petro Products (P) Ltd., 230 CTR 320 (SC) and other case laws, it was pleaded for deletion of the impugned penalty. 5. Ld.CIT while considering, but not accepting the plea of the assessee has concluded to confirm the action of the CIT(A) as per para.3.5 of his order which reads as under: "3.5 When the facts of the present case are analyzed in the light of the above observations of the Hon'ble Apex Court, I find that the appellant company has claimed depreciation on a commercial flat income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or were concealed. The expression 'has concealed the particulars of income' and 'has furnished inaccurate particulars of income' have not been defined either in sect ion 271 or elsewhere in the Act . However, not withstanding the difference in the two circumstances, it is now well established that they lead to the same effect namely, keeping of f a certain port ion of the income from the return. According to Law Lexicon, the word "conceal" means: "to hide or keep secret . The word 'conceal ' is conclave which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight ; to prevent the discovery of ; to withhold knowledge of . The offence of concealment is, thus, a direct at tempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities." In Webster's Dictionary, "inaccurate" has been defined as : "not accurate, not exact or correct ; not according to truth; erroneous; as an inaccurate statement , copy or transcript .". 9. The penalty u/s 271(1)(c) of the Act is leviable if the AO is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation, or (ii) he offers the explanation which is found by the AO or the CIT (Appeals) or the Commissioner to be false, or (iii) the person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that al l the facts relating to the same have been disclosed by him. 10. If the case of any assessee falls in any of these three categories, then the deeming provision provided in Explanation 1 to section 271(1) (c) come into play, and the amount added or disallowed in computing the total income shall be considered as the income in respect of which particulars have been concealed, for the purposes of clause (c) of section 271(1), and the penalty follows. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him, the assessee shall be out of the clutches of explanation ion 1 to section 271(1) (c) of the Act , and in that case, the penalty shall not be imposed. In the instant case, the assessee discharged the onus cast on it in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not disclosed all the facts which was material to the computation of his income." 11. In the light of aforesaid observations of the Hon'ble Apex Court, what is to be seen in the instant case, is whether the claim for deduction of depreciation made by the assessee was bona-fide and whether at all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271(l )(c) of the Act . The Assessing Officer has not been able to establish that the claim of the assessee for deduction of depreciation was not bona fide or that any specific particulars were concealed or furnished inaccurate. A mere reject ion of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income or furnishing inaccurate particulars thereof by the assessee. Hon'ble Apex Court in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158, after considering various decisions including Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519 (SC) and Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 (SC) concluded that a mere making of a claim, which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an aggregated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
