9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 853 - HC - Income TaxPenalty u/s 271(1)(c) deleted Bonafide of assessee s contentions - Whether the assessee s action disclosing certain particulars in the form of notes to statement of income and making wrong claim on the basis of such notes, amounts to furnishing of inaccurate particulars of income Held that - The Tribunal rightly observed that the assessee still had furnished detailed notes in respect of the claim with the computation of the income - the assessee was under bonaifde belief that the waiver of the sales tax was not liable to tax in view of the same being capital receipt in nature - the assessee had not concealed any particulars of the income and the conduct of the assessee was not deliberate, in defiance of relevant provisions of law - It is quite clear that the assessee had not concealed the particulars of its income - The necessary particulars had been furnished in more than one way - there is no substance in the arguments of the revenue that explanation (1) of Section 271 is attracted reference made to Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Pvt. Ltd., 2010 (3) TMI 80 - SUPREME COURT there was no error in the orders passed by the Tribunal maintaining deletion of the penalty as was imposed by the AO - the act of the assessee was bonafide even though the assessee may have failed to substantiate its claim that the amount was capital receipt Decided against revenue.
Issues Involved:
1. Imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961. 2. Determination of whether the assessee's claim was bonafide. 3. Assessment of whether the disclosure of particulars in the form of notes amounts to furnishing inaccurate particulars of income. Issue-wise Detailed Analysis: 1. Imposition of Penalty under Section 271(1)(c): The Assistant Commissioner of Income Tax imposed a penalty of Rs. 61,55,775/- on the respondent for furnishing inaccurate particulars under Section 271(1)(c) for the assessment year 2003-04. The penalty was based on the assessee's claim that the waiver of sales tax deferral loan was a capital receipt, which was rejected by the A.O., who treated the amount as a revenue receipt. The A.O. initiated penalty proceedings, asserting that the assessee attempted to take double benefit and furnished inaccurate particulars of income. 2. Determination of whether the Assessee's Claim was Bonafide: The respondent-assessee argued that the waiver of the sales tax deferral loan was a capital receipt, supported by detailed notes in their return of income and audited accounts. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal found that the issue was debatable and the assessee's explanation was bonafide. The Tribunal noted that the assessee's claim was based on certain judicial pronouncements and legal analysis, and the mere rejection of the claim did not make it unacceptable or liable for penalty under Section 271(1)(c). 3. Assessment of whether the Disclosure of Particulars in the Form of Notes Amounts to Furnishing Inaccurate Particulars of Income: The respondent disclosed the particulars of the sales tax deferral loan waiver in their audited accounts, tax audit report, and computation of income. The Tribunal observed that the assessee had not concealed any particulars and had disclosed all necessary details. The Tribunal upheld the view that the issue was debatable and the assessee's conduct was not in defiance of law. The Supreme Court's observations in the case of Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Pvt. Ltd. were cited, emphasizing that making an incorrect claim in law does not amount to furnishing inaccurate particulars. Conclusion: The High Court dismissed the appeal, agreeing with the findings of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal that the assessee's claim was bonafide and the disclosure of particulars did not amount to furnishing inaccurate particulars of income. The court held that the issue was debatable and the assessee had disclosed all necessary particulars, thus not attracting penalty under Section 271(1)(c).
|
