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TMI Blog2015 (3) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty liability, that should have been discharged by the MOT in terms of its Agreement with the assessee. Since we are only concerned with the imposition of penalty on such income, there can be no case under the present facts for imposing concealment penalty u/s 271(1)(c) on the assessee as there was a bona fide reason for not including such income in the total income. We, therefore, set aside the impugned order and order for the cancellation of penalty for all the years under consideration. - Decided in favour of assessee - ITA Nos.1694 to 1699/Del/2006 - - - Dated:- 12-1-2015 - SHRI R.S. SYAL AND SHRI A.T. VARKEY, JJ. For The Assessee : None For The Department : Shri J.P. Chandrakar, Sr. DR ORDER PER BENCH: Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th retrospective effect from 1.4.89. The new sub-section provides that where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or re-assessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the AO for initiation of the penalty proceedings under the said clause (c). When we examine the assessment orders for the years under consideration, it can be seen that the AO has directed for the initiation of penalty proceedings. As such, the penalty cannot be deleted simply on the ground that the AO failed to record proper satisfact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see fled its return declaring income of ₹ 9.94 crore which was later on revised to ₹ 7.07 crore. Notice u/s 148 was issued on the ground that the assessee did not show the correct income. Tax for this year was computed by the AO at ₹ 1.63 crore. For the AY 2001-02, the assessee filed return declaring income of ₹ 8.65 crore on 12.4.2002. Notice u/s 148 was issued on 8.11.2004 as the assessee, in the opinion of the AO, failed to offer the correct income. The AO computed total tax liability of the assessee for this year at ₹ 2.04 crore. For the AY 2002-03, the assessee filed return declaring income of ₹ 15.97 crore. In the assessment made u/s 143(3), the AO computed total chargeable tax at ₹ 3.85 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign consultant and their expatriate staff shall be exempt from the payment of all taxes, duties, fees, levies and other exemptions under the laws and regulations in India or the Government of India shall reimburse the consultants the payment made by way of taxes, duties, etc., if the exemption is not granted by the tax authorities. The above Agreement was amended vide Amendment dated 19.8.98 carrying out amendment in Article 5.01 of the original agreement. The amendment states that : The Government are pursuing the matter of tax exemption for the PCI (i.e. the assessee) and their staff as mentioned in Article 5.01 of the original agreement. In the event that exemption is not granted, the Government will pay any taxes due direct to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee, a non resident has been landed into a pitiable condition inasmuch as one arm of the Government of India, namely, MOT agrees that its income shall be exempt from the payment of all taxes and if the exemption is not granted by the tax authorities, then, the Government of India shall pay taxes due direct to the relevant tax authorities ; and the other arm, namely, the Ministry of Finance, not only rejects the claim of exemption of income but the AO recovers taxes due, and also imposes penalty on account of concealment of income. When the MOT agreed before hand with the assessee that it will seek exemption of the assessee s income from the Ministry of Finance or if some tax becomes payable, it shall be directly paid, how the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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