Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Dy. CIT, Central Circle, Aurangabad Versus M/s. Tapadia & Kasliwal Associates

Penalty proceedings u/s.271AAA - delay in payment of tax - assessment proceedings after search and seizure - CIT(A) deleted penalty - Held that:- Although the assessee has not paid an amount of ₹ 40,99,998/- before filing of the return of income, however, the fact remains that the demand of ₹ 49,64,700/- raised by the AO for A.Y. 2010-11 vide order dated 29-12-2011 passed u/s.143(3) has been paid on 22-03-2012 which is much before 28-06- 2012, i.e., the date of penalty order passed u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Accordingly, the order of the CIT(A) is upheld and the grounds raised by the Revenue are dismissed. - Decided in favour of assessee. - CO No. 74/PN/2014, ITA No.1430/PN/2013 - Dated:- 12-8-2015 - SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ. For The Assessee : Shri S.N. Puranik For The Department : Shri.B.C. Malakar ORDER PER R.K. PANDA, AM : This appeal filed by the Revenue and the CO filed by the assessee are directed against the order dated 02-04-2013 of the CIT(A), Aurangabad relating to Ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al at 215-216, Apna Bazar, Jalgaon Road, Aurangabad. In response to notice u/s.142(1), the assessee filed his return of income on 27-09-2011 declaring total income at ₹ 6,84,35,910/-. During the course of assessment proceedings the AO noted that during the course of search proceedings at the office premises of Shri Jugal Kishore Tapadia and Tapadia Construction Ltd. statement of Shri Jugal Kishore Tapadia was recorded on 09-03-2010 by the ADIT (Investigation), Aurangabad. In reply to Quest .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

return of income. The AO subsequently initiated penalty proceedings u/s.271AAA of the I.T. Act. He noted that the assessee in his computation of income had given a note which reads as under : NOTE : During the year under consideration, the possession of basement floor & ground floor keeping some balance work of hyper market is handed over to Pusti Enterprises Pvt. Ltd., the purchaser for carrying the fit out works. The proportionate sale consideration and proportionate profit on basement flo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

submitted that the firm has offered profit on basement floor and ground floor of the hyper market which is being constructed by the firm at Garkheda, Aurangabad and which is agreed to be sold to Pusti Enterprises Pvt. Ltd. The income has been declared in the statement recorded u/s.132(4) of the I.T. Act by one of the partners of the firm Shri Jugal Kishore Tapadia. The firm has also paid tax on the income offered. The particulars of this disclosure are duly furnished during assessment proceeding .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er in which such income has been derived; (ii) Substantiates the manner in which undisclosed income was derived; and (iii) Pays the tax, together with interest, if any, in respect of the undisclosed income. He observed that the tax payable on the returned income was ₹ 2,11,46,696/- and interest payable till filing of the return was ₹ 14,51,222/-. Therefore, the assessee should have paid ₹ 2,25,97,918/- by way of tax and interest till the date of filing of return of income. Howe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee has not paid the total tax and interest before furnishing the return of income, therefore, the assessee, according to the AO, is not eligible for the purpose of section 271AAA(2). The AO accordingly levied penalty of ₹ 69,40,208/- being 10% of the undisclosed income of ₹ 6,94,02,079/- u/s.271AAA of the I.T. Act. 5. Before CIT(A) it was submitted that the assessee has received advance consideration by bank cheques and the sale of the property and possession of the property in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n received by bank cheques and since all the transactions have been recorded in books of accounts and the income offered to tax on proportionate basis in A.Y. 2010-11 on the basis of entries recorded in the books of account, the same cannot be considered as undisclosed income of the assessee. 6. The assessee further argued that as per provisions of section 132B, existing liability is to be adjusted against the cash seized and such advance tax liability is the existing liability of the assessee. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tive intent behind this provision is to ensure recovery of outstanding tax, interest etc. which may arise subsequent to assessment pursuant to search action. It was argued that even if the intention of the legislature mentioned above is considered then also the tax on income disclosed is to be regarded as fully paid on completion of the assessment. It was accordingly argued that the third condition that the assessee pays the tax together with interest, if any, in respect of the undisclosed incom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

if the assessee has paid the tax and interest due thereon within the time limit provided in notice of demand u/s.156 and also well before the penalty proceedings were concluded. Relying on various decisions it was argued that no penalty u/s.271AAA of the I.T. Act could be levied on the assessee. 8. Based on the arguments advanced by the assessee and relying on the decision of Hon ble Supreme Court in the case of ACIT Vs. Gebilal Kanhaiyahal (HUF) reported in 252 ITR 435 and the decision of the K .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

owing grounds : 1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty of ₹ 69,40,208/- imposed u/s 271AAAof the Act. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the cash seized at the time of search should be considered as 'Advance Tax' payment, as the Explanation to Section 132B of the I.T. Act, is clarificatory in nature, and hence, to be considered as retrosp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rred in not considering the provisions of Section 140A(3), which compels the payment of tax and interest, before filing of return of income. 5) The appellant craves leave to add, alter, modify, delete, and amend any of the grounds, as per the circumstances of the case. 6) The appellant prays leave to adduce such further evidence to substantiate its case, as the occasion may demand. 10. The Ld. Departmental Representative strongly challenged the order of the CIT(A). He submitted that since the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

derived. Since in the instant case the assessee has not paid the taxes due together with interest in respect of such undisclosed income, therefore, he is not entitled to the immunity granted in section 271AAA. He submitted that various case laws relied on by the assessee before the CIT(A) are not applicable to the facts of the present case. He accordingly submitted that the order of the CIT(A) be reversed and that of the AO be restored. 11. The Ld. Counsel for the assessee on the other hand whi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rring to pages 17 to 23 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the letter addressed to the ADIT on 16-09-2010 and 22-06-2010 requesting adjustment of seized cash against the tax payable in respect of the firm. He submitted that the department has neither adjusted the cash seized nor communicated refusal for adjustment of such cash against the tax payable by the firm. Referring to the provisions of section 271AAA he submitted that the Act does not pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r the said provision w.e.f,. 01-04-1980 if any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1) he shall without prejudice to any other consequences which he may incur be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and all the provisions of this Act shall apply accordingly. Referring to proviso to sub-section (2) to section 158BFA he submitted that no order imposing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itted that since the assessee has paid the tax due after completion of the assessment and before the penalty order was passed, therefore, the order of the CIT(A) is in accordance with the law and therefore the same should be upheld and the grounds raised by the Revenue should be dismissed. In his alternate contention he submitted that the penalty, if any is leviable, has to be restricted to 10% of the unpaid tax. 12. We have considered the rival arguments made by both the sides, perused the orde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

079/-. Although the tax payable and interest payable on such income comes to ₹ 2,25,97,918 (tax ₹ 2,11,46,696/- + interest ₹ 14,51,222/-) we find the assessee had paid an amount of ₹ 1,84,97,920/- only till completion of assessment. Thus, the assessee has paid less by ₹ 40,99,998/- for which the AO held that the assessee had not paid tax due together with interest, if any, in respect of the undisclosed income and therefore penalty u/s.271AAA is leviable on the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

imit prescribed for payment of tax u/s.271AAA and since the assessee has paid the entire tax along with interest due before passing of the penalty order, therefore, no penalty u/s.271AAA is leviable on the assessee. 14. We find an identical issue had come up before the Kolkata Bench of the Tribunal in the case of DCIT Vs. Pioneer Marbles and Interiors Pvt. Ltd. reported in 144 TTJ 663. In that case, the assessee company was subject to search and seizure operations u/s.132 during which the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

had paid overall shortfall within permissible time, i.e. upon receiving the notice of demand u/s.156. The AO rejected the contention of the assessee and levied penalty u/s.271AAA. The CIT(A) cancelled such penalty holding that due taxes along with interest was paid before the penalty proceedings were concluded. On further appeal by the Revenue the Tribunal dismissed the appeal filed by the Revenue and upheld the order of the CIT(A) by observing as under : 6. We find that Section 271 AAA, which i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the spec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in which search was conducted. 7. We find that under the scheme of Section 271 AAA, there is a complete paradigm shift so far as penalty in respect of unaccounted income unearthed as a result of search operation carried out on or after 1s t June 2007 is concerned. Unlike in the case of penalty under section 271(1)(c), Section 271 AA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. While payment of taxes, along with interest, by the assessee is one of the conditions precedent for availing the immunity under section 271AAA(2), there is no time limit set out for such payments by the assessee. Once a time limit for pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

5 to Section 271(1)(c), which is broadly on the same lines, Hon ble Gujarat High Court, in the case of CIT Vs Mahendra C Shah (299 ITR 305) has observed that, ……there is no prescription about the point of time when the tax had to be paid qua the amount of income declared in the statement under section 132(4) of the Act . We must, however, point out that even after making these specific observations Their Lordships had to treat the conclusion of assessment proceedings as outer limi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se the opening portion of section 271(1) of the Act requires the Assessing Officer to record satisfaction in the course of such proceedings, and the satisfaction has to be as regards the concealment of particulars of income or furnishing inaccurate particulars of income. Section 271 AAA, as the statute unambiguously provides, does not require any subjective satisfaction of the Assessing Officer to be arrived at during the assessment proceedings, and, therefore, the outer limit of payment before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Forum: GST on RCM on rent in a unregistered state

Forum: COMPOSITION SCHEME

Forum: Input Tax Credit - Reg

Forum: GST Invoice

Article: Websites of Government Departments need lot of improvement. We are noticing detoriations in them for example, case of website of ITAT.

Highlight: Levy of additions tax u/s 115O on distribution of dividend - shares of its profits declared as distributable among the shareholders is not impressed with the character of the profit from which it reaches the hands of the shareholder - not to be bifurcated as agriculture and non-agriculture dividend - SC

Highlight: Rate of GST on old and scrap buses - 28% or 18% - at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage. - HC

Forum: Rent a cab operator

Highlight: In view of amendment made u/s 132A of the Income Tax Act, 1961 by Finance Act of 2017, the 'reason to believe' or 'reason to suspect', as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal, SC dismissed the appeal of the assessee

Highlight: Validity of Assessment Order - period of limitation u/s 153 (2A) is applicable even if the entire order was not set aside but matter was remanded back for for limited aspects with directions - HC

News: Note ban was a shake-up, achieved its main objectives

Notification: Amendments in the notification No.5/2017- Integrated Tax (Rate) dated the 28th June, 2017.

Highlight: Levying interest u/s 234C - interest is to be charged on the returned income and not on assessed income.

Highlight: Accrual of income - sale of right to develop and sell incentive FSI under LOI - till the conditions of LOI are fulfilled transfer is not complete and income does not accrue to the assessee

Highlight: TPA - determination of ALP - TP adjustment by applying Bright Line Test (BLT) is not sustainable on protective basis having no statutory mandate.

Highlight: Safeguard Duty - Advance License Scheme - as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty

Highlight: Manufacture - process of cutting of waste plastic container - Such plastic containers before and after cutting are nothing but waste / scrap - Not a manufacturing activity as no new product emerges.

News: NITI Aayog and Govt. of Assam organizes workshop on health sector reforms in Guwahati; launches SATH- Sustainable Action for Transforming Human Capital

Notification: Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding restriction of refund on corduroy fabrics

Notification: Seeks to amend notification no. 2/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst exemptions

Forum: GSTR 3B Rectification

Notification: seeks to exempt Skimmed milk powder, or concentrated milk

Notification: Seeks to amend notification no. 2/2017- integrated tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding GST exemptions.

Notification: Seeks to amend notification no. 1/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates

Notification: Seeks to amend notification no. 1/2017- integrated tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates.

News: Notification Issued For GST Actionable Claim On Branded Food Products

Highlight: Classification printed computer stationary/manifold Business Forms - to be classified under Chapter Heading 4820.00 or under Chapter Heading 4901.90 - items like A4 sheets, advertisement and job card to be classified under Chapter 49

Article: RCM Applicability to persons not liable to get registered us 23(1)

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version