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Tristar Intech (P) Ltd. Versus ACIT, Circle 16 (1) , New Delhi.

2015 (10) TMI 810 - ITAT DELHI

Penalty u/s 271(1)(c) - addition made u/s 43B - assessee furnished inaccurate particulars of income to reduce the taxable income and did not substantiate its claim of expenses - Held that:- Merely because there were some discrepancies, it cannot be held that the assessee intended to evade tax. The assessee had rectified the same and had accepted the mistake before the AO. The assessee also chose not to prefer appeal before the first appellate authority, itself shows that the mistakes were not wi .....

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here under but before the due date for furnishing the return of income under sub sec. 1 of sec. 139 of the Act, are allowable under s.36(1)(va) read with sec. 2(24)(x) and sec. 43B of the Act.

This is not a fit case for levy of penalty u/s 271(1)(c) as there has been no concealment on behalf of the assessee. The error that was brought to the notice in respect of depreciation was a bonafide error, which was corrected by the assessee by filing revised return during the assessment proce .....

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of of DCIT vs. Nepa Limited reported in (2015 (10) TMI 63 - ITAT INDORE) delete the penalty u/s 271(1)(c) of the Act levied by the AO and confirmed by the ld. CIT(A). - Decided in favour of assessee. - I.T.A .No. 1457/Del/2010 - Dated:- 7-9-2015 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER For The Appellant by Sh. Salil Kapoor, Adv. Sh. Sanat Kapoor, Adv. For The Respondent by Sh. J.P. Chandrekar, Sr. DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER: This is an appeal f .....

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ment 07.09.2015 construction related to infrastructure projects, dismantling of existing buildings etc. 3. The assessee filed its return of income on 30.11.2006 declaring total income of ₹ 10,28,830/-. The same was processed u/s 143(1). Statutory Notice u/s 143(2) was duly issued and the representative of the assessee attended from time to time, to file necessary details and evidences and produced books of account. The assessing office concluded the assessment on 30.12.2008, by making the .....

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ce, the AO initiated the penalty proceedings u/s. 271(1) (c ) and finalized the penalty proceedings by levying penalty of ₹ 11,49,000/- by giving following reasons: 5. In the light of above observations, it is concluded that in all of the above issues the assessee furnished inaccurate particulars of income to reduce the taxable income and did not substantiate its claim of expenses. Therefore, by virtue of Explanation - 1 of Section 271(1)(c) penalty is levied. In this year, normal tax rate .....

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IT(A) confirmed the order of ld. AO. 6. The ld. AR submitted in respect of each addition made by the Assessing Officer under section 143(3) proceedings. It is submitted that the assessment order was passed on 30.12.2008 by making following additions: 1. Excess depreciation on Plant & Machinery ₹ 24,56,003 2. Non-capitalization of expenditure c) Custom duty ₹ 3,50,021 Shipping expenses ₹ 98,766 3. Unpaid statutory liabilities u/s 43B ₹ 3,14,215 4. Late deposit of emplo .....

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iscrepancies. As a mistake in recording the figure. The assessee immediately revised the claim of depreciation to ₹ 47,60,903/- against the original claim of ₹ 72,16,906/-. It was submitted that due to the mistake, the value of Plant and Machinery was taken at ₹ 1,85,56,622/- instead of ₹ 18,55,862/-. 2) Addition in respect of custom duty and shipping expenses: The assessee in the revised return had added excess claim of custom duty amounting to ₹ 3,50,021/- and shi .....

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ue date for furnishing the return of income of the previous year u/s 139(1). However, the AO included the said amount while computing the income for the year under consideration being in violation of sec.43B of the Act. 4) Addition on the basis of late deposit of employees contribution towards PF & ESI The AO added an amount of ₹ 1,94,244/- on the ground that the amount was not paid within the due date prescribed under the Act. It is brought to the notice that there is a delay in depos .....

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as the assessee did not prefer any appeal against the quantum assessment. The ld. AR further pointed out that the penalty has been levied by the ld. AO for furnishing of inaccurate particulars of income and the ld. AO by virtue of Explanation 1 to Section 271(1)(c) has levied penalty. It is argued by ld. A.R that the AO has recorded the satisfaction for concealment of income and the penalty has been levied for furnishing of inaccurate particulars of income by considering Explanation 1 to Section .....

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nation to the AO at the time of assessment; (ii) that the explanation so offered by the assessee has not been found to be false by the Ld. A.O; (iii) that the assessee in bonafide belief has filed all the details and records in respect of the additions made were placed before the AO. 10. For the above submission, the ld. AR placed reliance on the judgment passed by the Hon ble Apex Court in the case of CIT vs. Reliance Petro Products reported in 322 ITR 158. The ld. AR also placed reliance on th .....

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brought to the notice of the assessee at the time of assessment proceedings and, therefore, there was a willful attempt to evade tax. 13. We have considered the rival submissions of both the parties, perused the material available on the record and the judgments relied upon by them. On merits it is observed that mistake of the assessee was bonafide which has been corrected by filing revised return before completion of assessment. Merely because there were some discrepancies, it cannot be held th .....

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delayed payment in respect of employees contribution to PF & ESI needs to be given liberal approach in view of the ratio laid down by the Hon ble Delhi High Court in the case of CIT v. P.M. Electronics Ltd., 220 CTR 635 (Delhi) while relying upon the decision of Hon ble Apex Court in the case of CIT Vs. Vinay Cement Ltd.,213 CTR (SC) 268 , concurred with the view taken by the Hon ble Madras High Court in Nexus Computer (P) Ltd.,219 CTR(Mad) 54 that employer/employees contribution towards pro .....

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etrospectively, with effect from, April 1, 1988 and not prospectively from April 1, 2004. 14. The decision relied on by the DR of the jurisdictional High Court in the case of Arcotech (supra) are distinguishable on the facts because in the said case, the assessee had not substantiated the claims and thus had not discharged the onus and even the audit report was silent in respect of the facts which was not disclosed. The assessee therein claimed the ignorance of law for substantiating the wrong c .....

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vation let us analyze the relevant provision u/s. 271(1)(c) Explanation 1, which is reproduced herein below: Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or furnished inaccurate particulars of [such income, or Explanation 1.-Where .....

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omputation 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 of which particulars have been concealed. 17. From the said provision, it is apparent that, if the ld. AO in the course of assessment proceedings is satisfied that, any person has concealed the particulars of income or furnished inaccu .....

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