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TMI Blog2014 (2) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ous and prejudicial to the interest of revenue as the sales tax deferment of Rs.1,74,02,084/- for the impugned assessment year was well beyond the eligible period. Further the sales tax debited to the profit and loss account to the tune of Rs.23,75,134/- has to be disallowed u/s 43B of the Act as no evidence has been produced by the assessee in support of remittance of the said amount into government account. The CIT accordingly passed an order on 26-3-2010 directing the Assessing Officer to make the addition of an amount of Rs.1,98,37,216/- comprising of the aforesaid two items. In consequence of the order passed by the CIT, the Assessing Officer passed an order u/s 143(3) read with section 263 of the Act on 15-9-2010 by making addition of amount of Rs.1,98,37,216/- as directed by the CIT. As a result of which, the loss was reduced to Rs.4,05,45,943/-. Against the aforesaid assessment order passed, admittedly no appeal has been preferred by the assessee. The Assessing Officer however initiated proceedings u/s 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income by the assessee. During the penalty proceedings, in response to the show cause notice issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so observed by the Assessing Officer that, accounting cannot overwrite the expiry of deferment benefit as granted by competent authority. 4.5. As regards to the observations made by the Assessing Officer, to come to the conclusion that assessee was held to be guilty f misleading revenue, by taking false claim under non applicable accounting Standard, it can be held that the said observations by the Assessing Officer are lacking strength, in as much as, the practice of particular accounting method by itself cannot help in deciding the intentional nature of evasion of tax. Further, as per the notification of Maharashtra Government, the sales tax deferment scheme of the appellant was to expire on 30-11-2003 and the deferred liability was to be remitted to the Government account, so as to make the claim under section 43B. The complete facts related to such deferment and subsequent payments were not brought on the record to prove that the particulars furnished by the assessee in this regard are inaccurate, so as to attract the provisions of section 271(1)(c) of the Act. As indicated and were not disputed, the particulars of such details were furnished through the notes on the accounts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails 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 purposes of clause (c) of this sub-section, be deemed to represent the income in respect to which particulars have been concealed." 4.7 As could be observed, penal provisions of section 271(1)(c) of the Act (as per explanation - 1), are attracted, for the following reasons: a) Either the assessee fails to offer an explanation or offers an explanation which is found by the Assessing Officer to be false or b) Assessee offers an explanation which is not substantiated and fail to prove that such explanation is bonafide. In this case, the appellant neither failed to offer explanation nor the explanation was found or proved to be false, since, the addition was on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the facts of the case and ratio of the decision of the Hon'ble Supreme Court in the case of CIT Vs Reliance Petro Products (P) Limited (supra), I am of the considered opinion that the claims made by the appellant were not proved to be false and the particulars furnished in return for making the claims cannot be treated a~ inaccurate particulars, so as to attract the penal provisions of section 271(1)(c) of the Act. Based on same, it is held that the penalty of 72,58,933/-, levied by the Assessing Officer for the year under reference based on the disallowances made towards sales tax deferred liability and sales tax is not sustainable. Accordingly, the penalty is ordered to be deleted / cancelled. " 4. We have considered the submission of the parties and perused the material on record. As can be seen from the assessment order passed u/s 143(3) read with section 263 of the Act, the Assessing Officer initiated proceedings for imposition of penalty u/s 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income by the assessee. It is further evident from materials on record, the assessee in the computation of income filed along with return of income for the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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