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2016 (8) TMI 567 - HC - Income TaxLevy penalty U/s. 271(1)(c) - whether exemption under Section 80 HHC which was claimed by the assessee was wrongly claimed as he has not done any export? - Held that - Explanation-4 to Section 271 (1) (c) of the Act was never the basis for passing the impugned order of Assessing Officer. For the first time, this argument has been advanced before us and this contention was never raised before the lower authorities and there is no mention about this ground even in the memo of appeal. It is found by the Tribunal that the this is a case of concealment of income or filing of inaccurate particulars of income and, accordingly, the order of penalty passed under Section 271 (1) (c) by the authorities below is confirmed. In that view of the matter, in our opinion, Tribunal has not committed any error while passing the impugned order. Therefore, present appeal is dismissed and the question posed for our consideration is answered in favour of the assessee and against the revenue.
Issues:
Challenge to Tribunal's order on penalty imposition under Section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 1995-96 based on concealed income and inaccurate particulars. Detailed Analysis: 1. Tribunal's Decision Challenge: The revenue challenged the Tribunal's order dated 11.6.2010, where the assessee's appeal was partly allowed for Assessment Year 1995-96. The main question was whether the Tribunal erred in directing the Assessing Officer to levy penalty under Section 271(1)(c) on the total assessed income, despite the concealed income amounting to a much higher figure. The appellant contended that the assessee's claim for exemption was invalid as there was no export involved, leading to a bogus claim. The Assessing Officer and CIT (A) had already rejected this claim, emphasizing that the penalty should be imposed due to the disallowed benefit under Section 80 HHC of the Act. 2. Legal Interpretation - Explanation-4 to Section 271(1)(c): The appellant argued that the Tribunal's decision was erroneous, citing Explanation-4 to Section 271(1)(c) of the Income Tax Act, 1961. This explanation defines the "amount of tax sought to be evaded" in cases of concealed income or inaccurate particulars. The appellant stressed that the penalty should have been imposed based on the concealed income, especially when the claimed benefit under Section 80 HHC was disallowed due to lack of export activities. 3. Respondent's Defense and Legal Precedent: The respondent, on the other hand, supported the Tribunal's decision, referencing a Supreme Court case (CIT v. Gold Coin Health Food Pvt. Ltd.) to justify the penalty imposition even when concealed income reduces the returned loss to a negative figure. The respondent argued that the Tribunal did not err in its decision, as per the legal interpretation provided by the Supreme Court case and the relevant circular. 4. High Court's Ruling: After considering both parties' arguments and reviewing the record, the High Court upheld the Tribunal's decision. The Court noted that the argument based on Explanation-4 to Section 271(1)(c) was not raised before the lower authorities and was a new contention. The Court affirmed that the concealment of income or inaccurate particulars was evident, leading to the confirmation of the penalty under Section 271(1)(c). Consequently, the Court dismissed the appeal, ruling in favor of the assessee and against the revenue, upholding the Tribunal's decision on penalty imposition. Overall, the High Court's detailed analysis and legal interpretation of the provisions under the Income Tax Act, 1961, supported the decision to confirm the penalty imposed on the assessee for concealed income and inaccurate particulars.
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