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Raman Chopra Versus DCIT, Circle 48 (1) , New Delhi

2016 (5) TMI 1132 - ITAT DELHI

Penalty u/s. 271(1)(c) - claim of exemption of salary in India as per Article 16(1) of the Treaty disallowed - assessee is a "Resident and Ordinarily Resident" individual - Held that:- Mensrea was a essential requirement of penalty u/s 271(1)(c). If the contention of the revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature. See .....

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e is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-21, New Delhi dated 10.9.2015 pertaining to assessment year 2011-12. 2. The assessee has raised so many grounds challenging the order of the Ld. Commissioner of Income Tax (A) dated 10.9.2015 wherein he has confirmed the penalty of ₹ 10,98,721/- levied u/s. 271(1)(c) of the I.T. Act imposed by the AO. 3. In this case the return for the assessment year 2011-12 was filed on 29.7.2011 declaring income of ₹ 3 .....

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₹ 35,55,722/- citing Article 16(1) of DTAA between India and US. On being asked to explain the claim made by the assessee he placed reliance on OECD commentary so as to justify his action in claiming exemption based on spilt residency position. However, the AO was not convinced with assessee's above contention. AO observed that since the period of assessee's stay In India was more than 183 days the AO held the assessee as resident and ordinary resident of India and consequently his .....

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otice was also issued on 28/08/2014 in response to which the assessee appeared and filed written submission dated 10/04/2014. In consideration of entire facts and circumstances of the case, the AO held assessee guilty of furnishing inaccurate particulars of income which attracted the penal provisions of section 271(1)(c), and accordingly levied a penalty of RS.10,98,721/- vide order dated 26/09/2014. Aggrieved with the penalty order, assessee appealed before the Ld. CIT(A), who vide impugned ord .....

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hat during the course of assessment proceedings, the assessee fully disclosed all the information asked for and has nowhere furnished any inaccurate particulars. It was the further contention that nowhere in the assessment order, it has been recorded that the appellant furnished inaccurate particulars of income. Therefore, he stated that no penalty can be levied in this case as it cannot be said that there was any attempt by the assessee to conceal particulars of income. In this behalf, he filed .....

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affirmed. 7. We have heard both the counsel and perused the orders passed by the Revenue authorities alongwith documentary evidences filed by the assessee in the shape of paper book and the case law cited by him. From the records, it reveals that the assessee is a "Resident and Ordinarily Resident" individual for the assessment year (AY) 2011-12. He derived income from salary and from other sources. He is also a resident of USA for the period April 1 2010 to June 30 2010. As the assess .....

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ident of USA for the period April 1 2010 to June 302010 as per the Treaty. Since the assessee is a resident of USA for the period April 1 2010 to June 30 2010 and has exercised his employment in USA during the above period, he is entitled to claim exemption of salary in India as per Article 16(1) of the Treaty. Accordingly, the assessee has claimed an exemption on remuneration received in India amounting to ₹ 35,55,722/- in respect of the services rendered in USA. 7.1 We find that the asse .....

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tax return were provided to the AO. However, the AO did not agree with the claim of exemption of remuneration. In the order, the AO has disallowed the claim and added back to the total income of the assessee. Based on above disallowance, the AO initiated penalty proceeding uls 271(1)(c) and held that assessee is guilty of furnishing inaccurate particulars of income which attracted the penal provisions of section 271(1)(c), and accordingly levied a penalty of RS.10,98,721/- vide order dated 26/09 .....

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on in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010 is squarely applicable in the present case of the assessee. In this case vide order dated 17.3.2010 it has been held that the law laid down in the Dilip Sheroff case 291 ITR 519 (SC) as to the meaning of word concealment and inaccurate continues to be a good law because what was overruled in the Dharmender Textile case was only that part in Dilip Sheroff case where it was held that mensrea was a essential req .....

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