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TMI Blog2012 (7) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Adv. Rohit Garg, CA Revenue by : Shri Sat Pal Singh, Sr.DR ORDER PER U.B.S. BEDI, J.M. This appeal of the Revenue is directed against the order passed by the CIT(A)- XV, New Delhi, dated 09.11.2011, relevant to assessment year 2001-02, whereby deletion of penalty of Rs.6,62,266/- imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act, 1961 has been challenged. 2. The facts indicate that the assessee has claimed deduction u/s 80HHC of the Act, amounting to Rs.16,74,503/- in respect of export of GTX-II, Chassis, MTGR, VME Board etc. to a company based in Turkey on the basis of certificate u/s 80HHC(4) of the Act in statutory form No.10CCAC issued by Vaish Associates, CA. This claim u/s 80HHC of the Act, was made by the assessee in return based on this statutory certificate u/s 80HHC of the Act, and these facts of the case were disclosed before the Assessing Officer in the return as well as in the assessment proceedings. However, the Assessing Officer had disallowed the claim u/s 80HHC of the Act on the ground that in this case, the export was of capital goods and gain was not derived from the business of the export of goods and merchandise. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Woollen International vs. ITO, 39 DTR 12(ITAT Delhi) - ITO vs. Floora Exports 40 DTR 70 (ITAT, Delhi). On the proposition that finding in assessment order is not conclusive, Ld.AR of the assessee also relied on the following judgments: - Anantharam Veera Singhaiah Co. vs. CIT, 123 I.T.R. 457, 462(SC) - Banaras Textoium vs. CIT, 169 I.T.R. 782 (All.) - CIT vs. Govinda Kutty Menon, 178 I.T.R. 509 (Ker.) - Hotel Allied Traders Pvt. Ltd. vs. CIT, 221 I.T.R. 619 (Ker.) - CIT vs. Ishtiaj Hussain, 232 I.T.R. 673 (All.) Further reliance was placed by the Ld.AR. of the assessee on the following judgments for the proposition that wrong professional advice does not attract penalty: - T. Ashoka Pai vs. CIT, 292 I.T.R. 11(SC) - CIT vs. Cadbury India Ltd., I.T.A. No.1397/2008 and 429/2009 (Delhi High Court) - CIT vs. Amar Nath, 16 DTR 326 (P H) - Yogesh R. Desai vs. ACIT (2010) 38 DTR (Mum.) (Trib.) 101. 4. In view of the above, Ld.AR of the assessee submitted that the Assessing Officer was not justified in imposing penalty u/s 271(1)(c) of the Act, amounting to Rs.6,62,266/- since it is not a case of furnishing of inaccurate particulars of income and the various ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the AO and the ClT(Appeals), it is seen that all the material facts necessary for the claim of deduction under Section BOHHC have been produced before the AO. The assessee also complied with the provisions of law by claiming the deduction on the basis of the certificate issued by the auditors which is a statutory requirement. It is not a case where the auditors have certified some other amount and the assessee has deliberately claimed in excess of the certificate prepared by the auditors. In such a case, even if certain items are included on which deduction under Section 8OHHC is not allowable, the fault is not with the assessee but of the auditors. In such a case, the assessee cannot be penalized for the default committed by the auditors. The reliance of the learned authorized representative of the assessee on the decision of the Hon'ble Delhi High Court in the case of CWT vs Mrs. Vidya Malhotra (supra) is appropriate and covers the issue. Similarly, the decision of the Tribunal in the case of Impulse Pvt. Ltd. vs. ITO (supra) also supports this view that mere rejection of the claim of the assessee under Section 80HHC will not attract concealment penalty under Section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, not withstanding the difference in the two circumstances, it is now well established that they lead to the same effect namely, keeping of f a certain port ion of the income from the return. According to Law Lexicon, the word "conceal" means: "to hide or keep secret . The word 'conceal ' is con+celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight ; to prevent the discovery of ; to withhold knowledge of . The offence of concealment is, thus, a direct at tempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities." In Webster's Dictionary, " inaccurate" has been defined as : "not accurate, not exact or correct ; not according to truth; erroneous; as an inaccurate statement , copy or transcript .". 9. The penalty u/s 271(1)(c) of the Act is leviable if the AO is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. It is settled position that assessment proceedings and penalty proceedings are separate and distinct and as held by Hon'ble Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate and fails to prove that such explanation is bona fide and that al l the facts relating to the same have been disclosed by him. 10. If the case of any assessee falls in any of these three categories, then the deeming provision provided in Explanation 1 to section 271(1) (c) come into play, and the amount added or disallowed in computing the total income shall be considered as the income in respect of which particulars have been concealed, for the purposes of clause (c) of section 271(1), and the penalty follows. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him, the assessee shall be out of the clutches of explanation 1 to section 271(1) (c) of the Act , and in that case, the penalty shall not be imposed. In the instant case, the assessee discharged the onus cast on it in terms of Explanation 1 to sec. 271(1)(c) of the Act. Hon ble Supreme Court in the case of Dilip N. Shroff v. Jt . CIT [2007] 210 CTR (SC) 228 : [2007] 291 ITR 519 (SC) while considering the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to export of capital goods which was held to be not derived from business of export was made by the assessee was bona-fide and whether at all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271(l )(c) of the Act . The Assessing Officer has not been able to establish that the claim of the assessee for deduction u/s 80HHC with respect to export of capital goods which was held to be not derived from business of export was not bona fide or that any specific particulars were concealed or furnished inaccurate. A mere reject ion of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income or furnishing inaccurate particulars thereof by the assessee. Hon'ble Apex Court in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158, after considering various decisions including Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/ 161 Taxman 218 (SC) and Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 / 174 Taxman 571 (SC) concluded that a mere making of a claim, which is not sustainable in law, by it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed before the AO. The following observations made by the Hon ble Apex Court in the aforesaid case of M/s Reliance Petro Products(supra) are relevant: 10. It was tried to be suggested that Section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an aggregated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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