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TMI Blog2017 (4) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... llowable expenditure. Neither it has been alleged that on advice of tax consultant, it was claimed as allowable expenditure, nor is the case of the assessee that without verification of the facts, he has signed the return under a bona fide mistake, which was prepared by the clerk in the tax consultant office. Under these circumstances, the ld.counsel for the assessee cannot draw benefit of the proposition laid down in the decision referred before us. Therefore, we are of the view that the ld.Revenue authorities have appreciated the facts in right perspective and we do not see any reason to interfere in the finding of the ld.CIT(A). - Decided against assessee - ITA No. 2189/Ahd/2014 - - - Dated:- 5-4-2017 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member Assessee by : Shri R.N. Vepari, AR Revenue by : Shri Dhaginvir Yadav, Sr.DR ORDER Per Rajpal Yadav, Judicial Member Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-V dated 11.4.2014 passed for Asstt.Year 2008-09. 2. Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming penalty of ₹ 5,28,066/- imposed by the AO under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief to the assessee. 4. The ld.counsel for the assessee has raised two fold submissions. In his first fold of submissions, he submitted that there is no clarity as to whether penalty was imposed for furnishing inaccurate particulars of income or concealment of particulars of income. Since the AO has failed to specify the charge against the assessee, therefore, penalty is not imposable upon the assessee. In support of his contentions, he relied upon the following decisions: New Sorathia Engineering Co. (282-ITR-642) (Gujarat) Amrut Tubewell Co. (275-CTR-86) (Gujarat) Jyoti Ltd. (216-Taxman-64) (Gujarat) Whiteford India Ltd. (219-Taxman-98) (Gujarat) Mukeshchandra Lakdawala (4-ITR (Trib)-307) (Ahmedabad) Sandhya Gadkari Sharma (181-TTJ-462) (Mumbai Tribunal) 5. In his next fold of submissions, he pointed that there was an inadvertent mistake and under a bona fide belief that whole interest is allowable, he made the claim. In support of his contentions, he relied upon the following decisions: Siddharaj Developers P.Ltd.(ITA No.185/Ahd/2008) Union Electric Corporation (281-ITR-266) (Gujarat) Oriental Power C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied, that the assessee has; (i) concealed his income or furnished inaccurate particulars of income. As far as the quantification of the penalty is concerned, the penalty imposed under this section can range in between 100% to 300% of the tax sought to be evaded by the assessee, as a result of such concealment of income or furnishing inaccurate particulars. The other most important features of this section is deeming provisions regarding concealment of income. The section not only covered the situation in which the assessee has concealed the income or furnished inaccurate particulars, in certain situation, even without there being anything to indicate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation I to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total income under the provisions of the Act, the assessee fails to offer an explanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther in view of the above, I am satisfied that the assessee has furnished inaccurate particulars of income and concealed the income of ₹ 17,27,520/-. Therefore, penalty proceedings u/s.271(1)(c) of the IT Act, 1961 has been initiated on this issue. 10. The ld.counsel for the assessee has drawn our attention towards letter dated 29.12.2010 and submitted that this notice was issued under section 274 r.w.s. 271 of the Income Tax Act. It might be notice issued by the AO, but this is not the show cause notice on which he has adjudicated the penalty proceedings. It was a letter on the date of passing assessment order. In the penalty proceedings, he has issued one more notice on 4.2.2013 which was duly replied by the assessee. The finding of the AO to this extent is worth to note, and it reads as under: 4. Based on the above observation, the Ld. CIT(A) proceeded to confirm disallowance of interest u/s.24(b) of ₹ 17,27,520/- in the appellate order dated 17.03.2011. Thereafter vide letter dated 04.02.2013 the assessee was given a fresh opportunity of being heard in respect of penalty proceedings initiated u/s. 271(l)(c) on addition of interest u/s.24(b) confirmed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under these circumstances, in the audit report, the provision pertaining to gratuity for those employees was referred as not admissible as a deduction. However, in the computation of income, this amount was not added back. It was an error committed by the clerk or an employee, who has made the computation. The Hon ble Supreme Court has held that it was an human error because in the audit report specific mention of section 40A(7) was made wherein it was alleged that the provision made for gratuity is not allowable as deduction under these circumstances. The Hon ble Supreme Court considered that there was no intention to conceal its income. In the present case, nothing that sort has been pointed out. We have confronted the ld.counsel for the assessee to explain what has operated in the minds of the assessee when he filed the return. What led the assessee to include the total interest expenditure as allowable expenditure. Neither it has been alleged that on advice of tax consultant, it was claimed as allowable expenditure, nor is the case of the assessee that without verification of the facts, he has signed the return under a bona fide mistake, which was prepared by the clerk in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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