9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 1034 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of deduction claimed u/s 80IB - Held that - The assessee has claimed deduction u/s 80IB in respect of profit derived from its industrial undertaking, which included deduction on account of export incentive also in the form of duty drawback, in the original return of income filed on 31.10.2004. Such a claim was reiterated in the return filed in response to notice u/s 153A on 17.08.2009. Once the assessee has not offered any income in consequence of search, in the return of income nor any such income was found as a result of search, there is no question of application of Explanation-5A, as held by the Ld.CIT(A). He has decided the issue entirely on wrong footing. In any case, at the time of filing of return of income, the assessee s claim was based on auditor s report and certificate in Form no. 10CCB. Such a claim was thus, non only based on bona fide belief but also prior to decision of Liberty India, which was rendered only on 31.08.2009. Earlier there were certain decisions which were in favour of the assessee. Even the Tribunal s decision in assessee s case for the A.Y. 2003-04, came after the date of filing of return of income for the A.Y. 2004-05. Thus, it cannot be held that assessee has furnished any inaccurate particular of income at the time of filing of return of income - Decided in favour of assessee Inclusion of undisclosed income in its return filed u/s 153A - Held that - Statement of Shri Ashok M. Seth, Executive Director of the company was also recorded u/s 131 during the course of survey u/s 133A, which was carried out simultaneously and explained the contents of impounded material and its implication in the books of account. Base on the seized documents, an income of ₹ 49,21,666/- was offered as undisclosed income. This amount was included in the return of income filed on 17.08.2009, in response to notice u/s 153A dated 06.07.2009. After including this income the total income was shown at ₹ 6,21,05,765/-. In the assessment order, the assessing officer had discussed specifically the related seized documents and the amount of interest/incentives which was received in cash and, found to be not recorded in the books of account. The declaration made by the assessee had been accepted by the assessing officer in the order passed u/s 143(3) r.w.s. 153A, dated 31.12.2010. There are no exception clauses for immunity from penalty u/s 271(1)(c), and to this extent, Explanation 5A is in contradistinction with Explanation 5, which was applicable for searches prior to 01.06.2007. In Explanation 5, there were two exceptions provided in clause (i) and (ii). If the cases fell within the said exceptions, then no penalty is leviable. Such exceptions have not been provided in Explanation 5A. All the case laws which have been referred by the assessee, pertain to exception clauses provided in Explanation-5. Here in this case admittedly the search has taken place after 01.06.2007 and the return of income for the A.Y. 2008-09 had fallen due much before the date of search. In the return of income filed prior to the date of search, the income of ₹ 49,21,666/- was not included by the assessee. The additional income which has been declared after the date of search was in the return of income filed u/s 153A and not earlier. Thus in our view Explanation-5A is clearly attracted and the penalty levied by the AO u/s 271(1)(c) has rightly been confirmed by the Ld.CIT(A). Accordingly, the grounds raised by the assessee is dismissed and the assessee s appeal for A.Y. 2008-09 is dismissed. - Decided against assessee
Issues Involved:
1. Penalty under Section 271(1)(c) for Assessment Year (A.Y.) 2004-05. 2. Penalty under Section 271(1)(c) for Assessment Year (A.Y.) 2008-09. Issue-Wise Detailed Analysis: 1. Penalty under Section 271(1)(c) for A.Y. 2004-05: The assessee appealed against the order confirming the penalty of Rs. 2,70,898/- levied under Section 271(1)(c) for disallowance of a deduction of Rs. 7,73,993/- claimed under Section 80IB on account of duty drawback. The assessee argued that there was no concealment or furnishing of inaccurate particulars of income. Facts: - A search and seizure action under Section 132(1) and survey action under Section 133A were conducted on 09.02.2009. - The assessee, engaged in manufacturing and trading stainless steel pipes and tubes, filed its return of income on 31.10.2004, claiming a deduction under Section 80IB. - The deduction included an export incentive (duty drawback) of Rs. 84,94,114/-. - The assessee accepted the disallowance of Rs. 7,73,993/- during the assessment proceedings based on prior adverse decisions. Arguments: - The assessee contended that the claim was made based on an auditor's report and certificate in Form No. 10CCB, and was thus bona fide. - The claim was made before the Supreme Court's decision in Liberty India Vs. CIT (2009) 317 ITR 218, which disallowed such deductions. - The assessee cited the Allahabad High Court decision in CIT Vs. Arvind Footwear Pvt. Ltd. (2012) 72 DTR 294, which supported the deletion of penalty under similar circumstances. Judgment: - The Tribunal found that the claim was bona fide and based on the auditor's report and prior to the Liberty India decision. - No income was found or offered as a result of the search, negating the applicability of Explanation-5A to Section 271(1)(c). - The Tribunal referred to the Allahabad High Court decision, emphasizing that a mere unsustainable claim does not amount to furnishing inaccurate particulars. - The penalty for A.Y. 2004-05 was deleted, and the appeal was allowed. 2. Penalty under Section 271(1)(c) for A.Y. 2008-09: The assessee appealed against the order confirming the penalty of Rs. 15,20,795/- levied under Section 271(1)(c) on an undisclosed income of Rs. 49,21,666/- declared in the return filed under Section 153A. Facts: - A search and seizure action was conducted on 09.02.2009. - The assessee, part of a group, declared undisclosed income of Rs. 15,00,21,000/- for various assessment years. - The original return for A.Y. 2008-09 was filed on 03.09.2008, declaring an income of Rs. 5,71,84,099/-. - In response to a notice under Section 153A, the assessee filed a return on 17.08.2009, declaring total income of Rs. 6,21,05,565/-, including Rs. 49,21,666/- as undisclosed income. - The additional income was based on seized documents showing unrecorded interest income. Arguments: - The assessee argued that the return filed under Section 153A replaces the original return, and the correct income was disclosed in response to the notice. - The assessee contended that penalty should not be levied as the income was disclosed voluntarily. Judgment: - The Tribunal noted that Explanation-5A to Section 271(1)(c) applies to searches initiated after 01.06.2007 and does not provide immunity exceptions. - The additional income was not declared in the original return filed before the search. - The Tribunal upheld the penalty, stating that Explanation-5A deems the assessee to have concealed income not declared in the original return. - The appeal for A.Y. 2008-09 was dismissed. Conclusion: - The appeal for A.Y. 2004-05 was allowed, and the penalty was deleted. - The appeal for A.Y. 2008-09 was dismissed, and the penalty was upheld.
|
