TMI Blog2017 (8) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... in India under the provisions of article 7(1) of the Tax Treaty in the absence of a permanent establishment of the assessee in India. The assessee did not offer the revenue from supply of network equipment to tax in India. It was a debatable issue hence failure to voluntarily file return of income under the above bona fide belief cannot be construed to be concealment of income and furnishing inaccurate particulars of income by the taxpayer. Also because the learned Commissioner of Income-tax (Appeals) and the Tribunal upheld the taxability of the assessee in India partially cannot lead to an inference that the assessee had furnished inaccurate particulars of income. - Decided in favour of assessee. - I. T. A. No. 1393/Delhi/2011 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent establishment in India under the terms of the Tax Treaty and is not taxable in India. In compliance with further notice issued under section 142(1) it, however, filed its return of income declaring nil income. It was selected for scrutiny and in the assessment framed under section 143(3), income earned from some sources was taxed. The entire revenue from supply of hardware was held to be taxable in India and profit margins at the rate of 40 per cent. were attributed to the Indian activities. Income from supply of software was taxed as royalty at the rate of 30 per cent. on a gross basis on the ground that software has been licenced by the assessee and not sold. The learned Commissioner of Income-tax (Appeals) gave part relief, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Shri Sanat Kapoor, advocate, with Ms. Ananya Kapoor, advocate, has on the other hand, reiterated the submission made before the authorities below and placed reliance on the decisions cited before them. 6. We have already discussed facts of the case hereinabove to paragraph Nos. 3 and 3.1 which we are not repeating here. It is an well-established proposition of law that being penal in nature, the provisions of section 271(1)(c) of the Act are invoked only when there is evidence beyond doubt that there was concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee towards the tax alleged to be evaded. That is the reason behind that assessment proceedings and penalty proceedings are inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment to tax in India. It was a debatable issue hence failure to voluntarily file return of income under the above bona fide belief cannot be construed to be concealment of income and furnishing inaccurate particulars of income by the taxpayer. Also because the learned Commissioner of Income-tax (Appeals) and the Tribunal upheld the taxability of the assessee in India partially cannot lead to an inference that the assessee had furnished inaccurate particulars of income. It is not the case of the Revenue that the assessee had not disclosed all the material facts but it is a case where the Revenue did not agree with the assessee that it was not liable to taxation in India. Penalty can be levied on account of failure on the part of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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