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TMI Blog2016 (12) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... ial and evidences to prove that there was concealment of particular of income in the case of assessee. - Decided in favour of assessee. - ITA No. 3039/Ahd/2015 - - - Dated:- 20-12-2016 - Shri S. S. Godara, Judicial Member And Shri Amarjit Singh, Accountant Member Revenue by: Shri Parsoon Kabra, Sr. D.R. Assessee by: Shri Anil R. Shah with Ms Kinjal, A.R. ORDER Per : Amarjit Singh, Accountant Member This assessee s appeal for A.Y. 2006-07, arises from order of the CIT(A)-3, Vadodara dated 01-08-2015 in appeal no. CAB- 3/39/2014-15, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short the Act . 2. The assessee has taken following grounds of appeal:- (1) The learned C.IT (A) erred the claimed exempted as per Service-Tax of the appellant that the order by the learned A.O is bad in law as per said order has been passing order by the learned appeal who is has order dated on 30-11-2009 without passed appellant effect order u/s 250 of Income Tax Act. On the facts and circumstances of the case the appellant submits that The penalty order u/s 271(1)(c) of Income Tax Act dated on 31-3-2011 by the A.C.I.T Circle-5 Baroda bad in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty u/s. 271(1)(c) of the ITAct,1961. 3. All the above stated grounds of appeal pertain to the common issue of levying of penalty u/s 271(1)(c) of the act, therefore, we decide these grounds together as under:- 4. The fact of the case is that in this case the return of income declaring income of ₹ 13,23,260/- was filed on 30th December, 2006. During the course of assessment proceedings, the assessing officer noticed that assessee collected service tax worth of ₹ 20,21,750/- out of which he had paid only ₹ 17,08,150/- against the liability. The balance amount of ₹ 3,12,959/- was added back to the income of the assessee by the assessing officer stating that this amount was statutory due to be paid by due date of filing of return u/s. 43B. Ld. Commissioner of Income Tax(A) has also confirmed this addition. 4.1 On the second issue, the assessing officer stated that assessee has made following advances to the related parties without charging any interest :- (i). Dilip J. Patel ₹ 16,68,543/- (ii). R.R. Mirchandani ₹ 50,000/- (iii). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this appeal order is not found to be tenable. The AO in the penalty order has mentioned that in the assessment order u/s 143(3) of the IT Act it has been clearly mentioned that the penalty notice is issued u/s 27i(l)(c) for furnishing of inaccurate particulars of income thereby concealing the taxable income. As per the AO the penalty notice was served on the appellant. The AO has placed the reliance on the case of M. Sajjalraj Nabar Ors Vs. CIT (Mad) 23 ITR 230 and Nainumal Met Chand Vs CIT (All) 294 ITR 185 as per which mentioning the words penalty proceedings initiated separately in assessment order is sufficient for invoking penalty action. In my opinion, the AO has recorded his satisfaction in the assessment order u/s 143(3) for initiation of penalty proceedings u/s 271(1)(c) by mentioning that the penalty notices issued u/s 271(1)(c) for furnishing of inaccurate particulars and thereby concealment of taxable income. The penalty notice has been served on the appellant. So far as specifying the charge for levy of penalty is concerned, in the assessment order the A.O. has mentioned that the penalty notice is issued for furnishing of inaccurate particulars of income and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x worth ₹ 20,21,750/-. As per the AO, however the appellant paid only 17,08,150/-against the liability and therefore as per section 43B the amount only to the extent of ₹ 17,08,ISO/- was allowable and the remaining amount of ₹ 3,36,959/- was required to be added back to the total income of the appellant. As per the AO, the appellant had not added back this difference of amount of service tax i.e. the difference between Service Tax collected; and service tax deposited to Government accounts. As per the AO the appellant should have shown this difference amount of ₹ 3,36,959/- as his income for the year under consideration. As per the AO the argument of the appellant that Service Tax is not a part of trading account but is part of P L account was not tenable because section 145A talks about method of accounting in certain cases. In view of these facts, the AO has levied the penalty of ₹ 1,13,4307- being 100% of the tax sought to be evaded on income of ₹ 3,36,959/- for filing of inaccurate particulars of income. While levying the penalty the AO has relied upon decision of Hon'ble High Court of Bombay in the case of CIT Vs Bassein Metals Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the income or had furnished inaccurate particulars. Consequently, the penalty was set aside. Being aggrieved the department has filed this appeal under section 260A of the Incometax Act Arguments 3. Mr. R.V. Desai, learned senior counsel appearing on behalf of the Department contended that the judgment of the Supreme Court in Allied Motors (P.) Ltd. 's case (supra) had no application to the facts of this case. Secondly, he contended that in this case, section 43B of the Income-tax Act, which was the subject-matter of the judgment in Allied Motors (P.) Ltd. 's case (supra) did not apply to the facts of this case as in this case, the assessee had concealed the trading receipt and it was not a case of disallowance under section 43B, but it was a case of concealment of trading receipt. As stated above, none appeared for the assessee though served. Findings 4. We find merit in this appeal. Firstly, section 43B of the Income-tax Act deals with disallowance. That section has no application to the present case. In the present case the assessee, having collected sales-tax, failed to pay the same. Secondly, in the case of Allied Motors (P.) Ltd. (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inaccurate particulars ?, Answer 6. For the reasons given hereinabove, we answer the above question in the negative, i.e., in favour of the Department and against the assessee. 7. Accordingly the appeal is allowed. No order as to costs. 5.4 In view of the facts as discussed in preceding paragraphs and also in view of the above decision of Hon'ble Bombay High Court as given in the case of CIT Vs Bassein Metals Pvt. Ltd. the penalty of ₹ 1,13,430/- as levied by the AO u/s 271(1)(c) is hereby confirmed. Thus, the grounds of appeal of the appellant are dismissed. 6. During the course of appellate proceedings before us, learned counsel contended that the Ld. Commissioner of Income Tax(A) has erred in confirming the penalty u/s. 271(1)(c).He further contended that the assessee had fully disclosed all the facts in the accounts. The assessing officer had levied the penalty on the ground that the assessee had furnished inaccurate particulars of income merely by rejecting the claim of the assessee. He further contended that disallowance of claim cannot automatically lead to concealment of income or furnishing of inaccurate particular of income. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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