9911796707
TMI Blog2010 (9) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment proceedings u/s 143(3) for A.Y. 2004-05 it was noticed that the assessee had not declared tax perquisite in the original return of income for A.Y. 2004-05. During the course of assessment proceedings for A.Y. 2004-05, the assessee filed revised return of income in which tax perquisites were included. It was so observed that for A.Y. 2003-04, a similar issue was involved and that the income on account of tax perquisite had escaped assessment for A.Y. 2003-04. Hence the assessment for A.Y. 2003-04 was reopened u/s 147 of the Act. Accordingly, notice u/s 148 was issued to the assessee on 29-12- 2006 which was served on 9-1-2007. In response to the notice u/s 148 the assessee filed a letter on 7-2-2007 in which the assessee stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative of the assessee has then filed a revised working of the income offering perquisites. Simultaneously the employer company (foreign company) has issued TDS certificate after deducting tax in march 2006. While completing the re-assessment u/s 147 read with section 143(3) for A.Y. 2003-04 the penal proceedings u/s 271(1)(c) were initiated and show cause notice u/s 274 read with sec. 271(1)(c) was issued to the assessee. Detailed submissions were made. 4. After considering the submissions made on behalf of the assessee, A.O observed that there is no denial of the fact that the value of the perquisites received by the assessee in the form of payment of India taxes in respect of the assessee's salary was not disclosed by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndoubtedly had access to the very best available legal advice. I am, therefore, of the considered view that the Appellants were negligent, or at least that negligence could be imputed to them, for not disclosing} their full and correct taxable income and paying due taxes thereon in the very first instance, at the time of filing the original return Itself. From the foregoing discussion, however, it is also clear that although an act may be done negligently, it could, nevertheless, be a bonafide act. The legal position, as explained In Kanby, and reiterated by the Hon'ble Tribunal in its order in the Appellants' own case clearly spells out that "when an assessee acts bona fide, it cannot be said that there is a failure to dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triates' India deputation the assessee was in employment with Daimler AG as well as MB India. The assessee filed his return of income on 1-9- 2003 for A.Y. 2003-04 declaring income of ₹ 25,699/- comprising of salary from MB India and Daimler Chrysler AG. As regards salary income received by the assessee from MB India the applicable taxes thereon were deducted and paid into the Indian government treasury by MB India. As regards the salary income by the assessee from Daimler AG the assessee was entitled to a 'net of tax' salary and the Indian taxes were borne by Daimler AG and hence the liability to pay Indian taxes in respect of salary income from Daimler AG was on Daimler AG. Given the above, Daimler AG in consultation with its tax ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in July 2005 and steps were initiated by Daimler AG in consultation with tax advisor. 9. Thereafter detailed review of the past reporting was done and the revised tax liability of the expatriates computed based on interpretation of the Indian tax laws by the new tax advisor of Daimler Ag and also adopting various conservative positions Daimler AG then voluntarily and suo moto deposited the incremental tax arising after considering the taxable salary component's, by way of tax deduction at source (TDS) along with interest u/s 201(1A) as per the provisions of the Act for all the relevant assessment years on 27-3-2006. Thereafter, Daimler AG issued form 16 inter alia to the assessee for tax deducted at source by Daimler AG. Subsequently, Daim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of computation of income of the assessee for all relevant assessment years the assessee filed an application in June 2006 with CIT - V along with copy of form no. 16 issued by Daimler AG. Subsequently in response to notice issued by the A.O u/s 148 the assessee filed revised return of income with A.O. the income disclosed by the assessee in this revised return is the same as earlier voluntarily disclosed income as mentioned above. The income disclosed by the assessee in the revised return was not disputed by the A.O. However, along with the assessment order u/s 147 of the Act the A.O issued one notice to the assessee for levying penalty u/s 271(1)(c) which is not justified. The A.O has levied penalty despite the fact that the payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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