9911796707
TMI Blog2019 (4) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... sment tax. The return was selected for scrutiny. The assessment was completed under section 143(3) on 23.12.2015. During the assessment, the Assessing Officer noted that the authorised capital of the assessee was increased from Rs. 36 Crore to Rs. 230 Crore. The assessing officer called rates and taxes. On perusal of the details, the assessing officer noted that stamp duty of Rs. 97,00,000/-, fee of Registrar of Company (ROC) of Rs. 38,80,000/- and franking charge of Rs. 22,50,000/- were debited for increase of authorized share capital. The said expenditure was incurred subsequent to the commencement of business and the same was capital in nature incurred for acquiring benefit for enduring nature not allowable under section 35D. The assessee though disallowed the stamp and ROC fees while computing its income, however, the said franking charge was not disallowed. The Assessing Officer disallowed the said franking charge Rs. 22,50,000/-. While passing the assessment order, the Assessing Officer initiated the penalty under section 271(1)(c). The Assessing Officer levied the penalty of 100% of the tax sought to be evaded. The Assessing Officer worked out the penalty of Rs. 7,64,775/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he delay as the assessee acted bonafidely for not filing appeal in time. The assessee now compelled to file appeal before the Tribunal as the department has issued show-cause notice for issuing prosecution against all the directors of the assessee. In support of his submission, the ld. AR of the assessee relied upon the decision of Hon'ble Supreme Court in Collector, Land Acquisition vs. Mst. Katiji and Others. [1987] 167 ITR 471 (SC), Vedabai alias Vaijayanatabai Baburao Patil [2002] 173 CTR 300 (SC) and the decision of Hon'ble Bombay High Court in Vijay Vishin Meghani vs. DCIT [2017] 398 ITR 250 (Bombay HC). The ld AR would submit that the assessee has good case on merit and is likely to succeed. 5. On the other hand, the ld. DR for the revenue submits that the assessee has not shown good cause for condonation of delay. Once the assessee has taken a conscious decision for not filing appeal, the assessee now cannot take an artificial ground for condoning the delay. 6. We have considered the rival submission of the parties. We have also perused the affidavit filed on behalf of the assessee in support of application for condoning the delay. We have also deliberated on various case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essarily to face such litigation. (xi) It is to be borne in mind that no one gets away with fraud, is representation or interpolation by taking recourse to the technicalities of law of limitation. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude." 7. Considering the facts and circumstances of the case and the ratio of law laid down as referred above, we are of the view that the assessee has acted on the advice of his tax advisor. The assessee acted on the advice keeping in view the cost of litigation, which in our view is a reasonable cause. And the assessee is now compelled to file the present appeal. We have also found that the assessee has got merit in their favour. Therefore, in view of the above discussion the delay in filing the present appeal is condoned. Therefore, assessee and the revenue was also heard on merit. 8. On merit, we have heard the submission of ld. AR of the assessee and ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(1)(c), the assessee filed its reply dated 17.08.2015. In the reply, the assessee contended that in course of scrutiny assessment while providing the details in respect of rate and taxes, the assessee realize its error in not disallowing the franking charges and admitted that the aforesaid charges ought to have been disallowed while arriving at the taxable profit. The contention of assessee was not accepted by Assessing Officer holding that the penalty under section 271(1)(c) is attracted, where the Assessing Officer is satisfied that any person has concealed the particular of income or furnished inaccurate particular of such income. The case of assessee is squarely falls under Explanation (1) to the proviso of section 271(c). The Assessing Officer levied the 100% penalty of tax sought to be evaded on disallowance of franking charges of Rs. 22,50,000/-. The ld. CIT(A) upheld the action of Assessing Officer holding that assessee debited the capital expenditure of franking charges for increase in authorized share capital without adding back the same in its computation of income. It is settled legal position that any expenses incurred for increase of authorized share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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