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TMI Blog2014 (9) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... lso recorded that the application filed on 20th November, 2006 has not been disposed of, which also means that the application had not been rejected - it is not a fit case for imposition of penalty u/s 271(1)(c) of the Act and as the appellant-assessee had been able to explain the reason and cause why the income was claimed as exempt and the reason and cause was bona fide and it cannot be a case of the Revenue that all material facts and particulars were not placed before the AO – Decided in favour of assessee. - Income Tax Appeal No. 17/2014 - - - Dated:- 3-9-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appellant : Mr. Ved Jain Mr. Pranjal Srivastava, Advocates. For the Respondent : Mr. Sanjeev Sabharwal, Sr. Advocate with Mr. Ruchir Bhatia Ms. Swati Thapa, Advocates. ORDER Sanjiv Khanna, J. (Oral): M/s Lea International Limited, a non-resident, has filed this appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) against the order of the Income Tax Appellate Tribunal (Tribunal, for short) dated 11th July, 2013 upholding levy of penalty for concealment of income under Section 271(1)(c) of the Act. 2. The appeal in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recipient country reasonable amounts of foreign currency for the purpose of the Technical Assistance and may withdraw from the recipient country similar amounts of foreign currency together with any amounts earned therein by the Consultant and the personnel in connection with the Technical Assistance; and (iv) the personnel and their families (if they are not citizens or nationals of the recipient country) may bring into the recipient country reasonable amounts of foreign currency for their personal use and may withdrew similar amounts of foreign currency from the recipient country; (b) The Government shall: (i) promptly provide the personnel and their families with any entry and exit visas, residence permits, foreign exchange permits and travel documents required for their stay in the recipient country; (ii) promptly provide the Consultant and the personnel with work permits and other documents necessary to enable them to perform their work on the Technical Assistance; and (iii) promptly clear through customs any equipment, materials or supplies required for the Technical Assistance, any personal effects and household goods of the personnel and their families. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 10(8A) dated 20th November, 2006 was filed subsequent and post filing of the return and issue of notice. This showed lack of bona fides on the part of the appellant-assessee. 8. The appellant-assessee has placed on record copy of the letter dated 20th November, 2006, which was filed with the Additional Secretary, Department of Economic Affairs, Ministry of Finance, Government of India. The said letter for the sake of convenience is reproduced below:- LEA International Ltd. Transportation and Management consultant Consulting Engineers Dated: 20th November, 2006 To, The Addl. Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, North Block, New Delhi Re: Approval u/s 10(8A) of the Income Tax Act, 1961 Sir, The applicant, M/s Lea International Limited, Canada had entered into an agreement with M/s Asian Development Bank on 23rd November, 2004 for rendering technical consultancy services in relation to North Eastern Region Urban Development Project . Appendices 4 of the said agreement enlists the Specific assurances of the Government. section 12.02 of the appendix 4 provides that- The government shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd cogent explanation in this regard, which was not considered and examined or even noticed by the Tribunal. The surrounding and attending circumstances indicate and establish that the said explanation was genuine and correct. In this connection, we may notice that in the return of income itself, the appellant-assessee had taken care and caution to reveal and state full and material facts. In the computation of assessable income, the appellant-assessee had specifically disclosed that consultancy fee of ₹ 2,29,583/-had been treated as exempt under the Act and a specific note 3.2 in schedule 8 of the balance sheet was recorded. The said note reads as under:- 3.2 Consultancy/Technical fees includes ₹ 112,55,025 in respect of contract TA 4348-IND North Eastern Region Urban Development Project, wherein it is provided in the agreement that income resulting from this project is exempt with reference to the provisions of the agreement establishing the Asian Development Bank (The Charter), the firm and each of its consultants is an expert performing a mission for the ADB and as such is entitled to the immunities, privileges, and exemptions set forth in article 55 56 of the ..... 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