TMI Blog2019 (9) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... note regarding concealment or furnishing of inaccurate particulars of income was recorded by the Assessing Officer during the course of assessment proceedings. The question whether exemption u/s 10(20A) is allowable or not, is a question of law which is pending for adjudication before the ITAT. This issue, thus is debatable on which two opinions are possible and hence penalty u/s 271(1)(c) is not leviable. Under the penalty u/s 271(1)(c) is required to be imposed with reference to tax sought to be evaded. In the order imposing penalty, this requirement of law has not been fulfilled in as much as tax sought to be evaded has not been worked out. There is no tax which is sought to be evaded. The assessee company had paid full tax on income declared in the return without taking into consideration its claim for exemption u/s 10(20A). These facts were properly adjudicated by the CIT(A) and thus, there is no need to interfere with the findings of the CIT(A). - Decided against revenue Revision u/s 263 - assessment of income under head other sources and not business income - HELD THAT:- From the perusal of the said order it can be seen that in the earlier years, the order u/s 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny law and merely a company registered under The Companies Act. (ii) The CIT(A) failed to appreciate that inaccurate particulars had been shown by the assessee company by claiming expenses which were disallowed by Assessing Officer, addition made has been sustained by the CIT(A) and had the same not been detected in assessment this income would have escaped assessment. (iii) The CIT(A) failed to appreciate that inaccurate particulars have been shown by the assessee company to the extent of disallowance of interest expenses at ₹ 18,27,449 by the Assessing Officer and addition has been sustained in the quantum appeal by the CIT(A) because had the case not been selected for scrutiny, this amount would have escaped assessment. The appellant craves to be allowed to amend, delete or add any other ground of appeals during the course of hearing of this appeal. ITA No. 4433/Del/2005 (A.Y. 2001-02) 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting penalty under section 271(1)(c) of the IT Act, 1961 of ₹ 39.15 crores levied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total loss of ₹ 14,64,85,780/-. 6) The appellant craves leave to add, alter or modify any grounds of appeal either before or at the time of hearing of the appeal. 3. The facts of A.Y. 2000-01 and 2001-02 are identical therefore, we are taking up the facts of A.Y. 2000-01. The assessee company is a joint venture undertaking of the Government of India and Government of Delhi, engaged, inter alia, in the business of planning, designing, development, construction, maintenance, operation and financing of mass rapid transport and other urban transport and people mover system of all types in the National Capital Region of Delhi. In the I. T. Return, for this Assessment Year 2000-01 interest income on bank deposits at ₹ 59,57,94,430/- was declared. Subsequently, a revised return was filed showing nil income. In the revised return after claiming deduction of expenses for earning of interest income, the income was worked out at ₹ 45,10,06,672/-, which was claimed exempt u/s 10(20A). While completing the assessment, the Assessing Officer did not allowed any deduction of expenses for earning of interest income. Claim for exemption u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or scrutiny, this amount would have escaped assessment. 6. The Ld. AR relied upon the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It has been held in a number of cases that in the absence of non-recording of satisfaction note by the Assessing Officer during the course of assessment proceedings regarding concealment or furnishing of inaccurate particulars of income, penalty u/s 271(1)(c) is not impossible. It can be seen from the records that since Assessment Year 1996-97 (first year for which Income-Tax return was filed by the assessee company) exemption u/s 10(20A) was being claimed which was denied at the level of Assessing Officer and CIT(A). Against this decision, the assessee company has filed second appeals before the ITAT, right from Assessment Year 1996-97 onwards which are pending for adjudication before the ITAT. Since it is a matter of legal opinion whether exemption u/s 10(20A) is allowable or not, it cannot be said that the assessee company concealed its income or furnishing inaccurate particulars of its income. Hence Penalty u/s 271(1)(c) was not leviable. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of ₹ 603.18 Lakhs and therefore the order passed by the Assessing Officer u/s 143(3) is not erroneous and prejudicial to the interest of the revenue and proceedings u/s 263 of the Income Tax Act, 1961 may be dropped. However, the CIT-IV, Delhi passed an order dated 28.03.2008 for A.Y. 2003-04 and ordered for fresh adjudication and decision as per the law. The assessee could not appeal against the order passed u/s 263 by the CIT, Delhi IV because of oversight by the consultant to whom the order u/s 263 of the Act was given for filing in appeal. Therefore, the assessee filed application for condonation of delay of 301 days. The Ld. DR opposed the condonation of delay. 9. We are of the opinion that the assessee and its consultant through the affidavit explained the delay and it appears to be genuine reason for the delay in filing the appeal before the Tribunal. Hence we are condoning the delay. Now we are taking up the contentions of both the parties in respect of merits of the case. 10. The Ld. AR submitted that the assessee came to be constituted on 03.05.1995 as a Joint Venture Company having two shareholders namely Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 ITR 547 HC (Del) g) CIT vs. Saluja Exim Ltd. 329 ITR 603 (P H HC) h) Grasim Industries Ltd. vs. CIT 32 ITR 92 (Bom HC) i) CIT vs. Sunbeam Auto Ltd. 227 CTR 133 (Del HC) The Ld. AR further submitted that without prejudice to the earlier contentions, once the business had commenced and even if the aforesaid income is held assessable under the head income from other sources that will make no difference in as much as business loss will go up and the same has to be set off from the purported income from other sources. The Ld. AR relied upon CIT vs. Rajendra Prasad Moody 115 ITR 519 (SC). 11. The Ld. DR submitted that the assessee has earned huge amount of interest income in years under consideration. The surplus funds have been deposit as fixed deposit/flexi deposit. The business of the assessee is planning, development, construction, maintenance, operation and financing of mass transit and urban transport system in national capital territory. The receipts expenses of the assessee are as follows: A.Y. Total Receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT [2017] 164 ITD 449 (Hyd. Tri.) 7. Shree Maheshwar Hydel Power Corporation Ltd. vs. CIT [2018] 96 taxmann. Com 167 (Bom) 8. Kakinada SEZ (P.) Ltd. [2013] 31 taxmann.com 165 (Hyd. Tri.) 9. Hotel Queen Road (P.) Ltd. vs. ITO [2012] 14 ITR (T) 124 (Del. Tri.) 10. MKR Frozen Food Exports Ltd. vs. ITO [2010] 126 ITD 1 (Del.) 11. Conventional Fastners vs. CIT 2018-TIOL-202-SC-IT 12. CIT vs. Jyoti Apparels [2007] 209 CTR 288 (Del.) 13. CIT vs. Mereena Creations [2011] 330 ITR 199 (Del.) 14. CIT vs. Rassi Cement Ltd. [1998] 232 ITR 554 (AP) 12. We have heard both the parties and perused all the relevant material available on record. The CIT, Delhi IV, New Delhi held u/s 263 as under: 4. I have carefully considered the submission of the assessee and I have also perused the assessment record. From the perusal of assessment record it has been found that the assessing officer has failed to brought the income from other sources to the extent of ₹ 608.81 Lakhs on account of interest on refund and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/- for assessment year 1998-99. The Ld. CIT(A) has further progressively increased the expenses which could be allowable, by 10% for the year 2000-01, 2001-02 and 2002-03. In the assessment year 2001-02, the claim of the assessee was only of ₹ 7,76,600/- and therefore he restricted the claim of expenses to that extent. In absence of a specific demonstration by the assessee that particular expenses relates to the interest income and in absence of any documentary evidence in support of such a claim, we may not like to disturb the expenses already allowed by the Ld. CIT(A), in view of the fact that there is no appeal of the Revenue before us in which the quantum of expenses allowed under the head Income from other sources has been contested by the Revenue. In view of the above discussion, the relevant ground number 5(a) and 5(b) of ITA No. 1874/del/2004 for assessment year 2000-01, ground No. 5 and 6 of ITA No. 4553/del/2003 for assessment year 2001-02 and grounds No. 5 and 6 of ITA No. 5095/del/2004 for assessment year 2002-03 are accordingly dismissed. Thus, from the perusal of the said order it can be seen that in the earlier years, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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