9911796707
TMI Blog2018 (6) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was also appears to be bonafide claim and there is no concealment of income or furnishing inaccurate particulars - No penalty to be invoked - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2007-08 on 31.10.2007 declaring total loss of ₹ 1,29,54,737/-. The Assessing Officer (AO) completed the assessment on 18.12.2009 determining the loss at ₹ 39,11,377/-. The assessee also filed its return of income for the A.Y. 2008-09 on 30.09.2008 declaring Nil income. The AO completed the assessment on 02.12.2010 determining the income at ₹ 1,19,92,709/-. During the course of the impugned assessment years, the AO took into account the decision of ITAT in the case of the assessee for the A.Y. 1989-90 wherein it has been held that the activities of the assessee were not of charitable nature and it was running the business of publishing newspaper. Thus exemption u/s 11 was denied to the assessee. The AO found that the activities of the assessee in the impugned assessment years were same as the one in the A.Y. 1989-90. In view of the above, the A.O. imposed a minimum penalty of ₹ 19,32,534/- for the A.Y. 2007-08 and ₹ 18,62,354/- for the A.Y. 2008- 09 u/s 271(1)(c) of the Act. 4. The assessee preferred appeal against the order of the AO before the learned CIT(A). It is found by the learned CIT(A) that the assessee trust was granted registration u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 1996-97, 1998- 99 and 2003-04 has explicitly recorded a finding of fact and held that the objects of trust, as a whole, are for charitable purpose falling within the meaning of section 2(15) of the Act. For the A.Y. 1998-99, 2000-01, 2003-04, 2007-08 and 2008-09, the decision has been reversed by the ITAT. Once, this proposition is accepted, the issue of grant of exemption in the case of the assessee can at best be described as a debatable issue. The learned CIT(A) relied on the judgement of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P.) Ltd [2010] 189 Taxman 322 (SC), wherein it has been held that penalty cannot be levied merely because the AO and the assessee hold a divergent view on allowablity of a claim for deduction. He also relied on the decision in the case of Dilip N. Shroff 210 CTR 228 (SC) and deleted the penalty imposed by the AO. 5. Before us, the learned DR referred to page 17 of the order of the learned CIT(A) wherein he has mentioned that the quantum appeals of the assessee for the A.Y 2007-08 and 2008-09 have been dismissed by both the CIT(A) and the ITAT. He also relied on the order of the AO. 6. Per contra, the learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the relevant assessment years and if so to follow the decision of Hon'ble Supreme Court (cited supra) if the income is so utilised and otherwise to decide according to law. Thus, these appeals of the assessee are allowed for statistical purpose only''. 7.2 In the case of the assessee for the A.Y. 1996-97, 1998-99 and 2003-04 (ITA No. 291, 292 & 293/Mum/2007), the issue before the Tribunal was whether the surplus funds utilised for acquisition of assets for business purposes would amount to application of income or not for charitable purpose. The Tribunal held that the expenditure in respect of those fixed assets in respect of which depreciation has been claimed and allowed to the assessee cannot be treated as application of income. However, the balance amount spent for acquisition of fixed assets, on which no depreciation has been allowed, is to be treated as application of income as per the test laid down by the Tribunal in assessee's own case for A.Y. 1989-90. Accordingly, the Tribunal restored the issue to the file of the AO to decide the same in the light of their decision for the A.Y. 1989-90 and to determine the application of income accordingly. 7.3 Now we come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee's case was wholly unmaintainable and dismissed the appeal. 7.6 Let us now go back to the background on which the AO has imposed penalty u/s 271(1)(1) of the Act. In the assessment order for the A.Y. 2007-08, the AO has made the following additions: 1 Non-Pyament of Employees & employers Contribution of Provident fund Rs.22,57,426/- 2 Non-payment/late payment of ESIC contribution ₹ 3,21,183/- 3 Penalty for contravention of law ₹ 5,910/- 4 Non-deduction of IDS on payments attracting Provisions of section 40(a)(ia) ₹ 21,30,302/- 5 Prior Period Expenses disallowed u/s 43B ₹ 23,92,292/- 6 Disallowance u/s 40A(2b) ₹ 2,97,527/- Total ₹ 74,04,640/- 7.7 However, the learned CIT(A], considering the facts of the case, allowed certain expenses to the assessee and confirmed the following additions: 1 Non-payment of employees & employers Contribution of Provident fund (Rs. 22,57,426-10,22,021) ₹ 12,35,405/- 2 Non-payment/late payment of ESIC contribution [Rs. 3,21,183-1,78,090) ₹ 1,43,093/- 3 Penalty for contravention of law ₹ 5,910/- 4 Non-deduction of TDS on payments attracting Provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure on interest would amount to giving inaccurate particulars of such income. Such cannot be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-11 as the facts were identical in all the years. Since the Hon'ble ITAT has already upheld the order of Ld. CIT(A) in respect of AY 2007-08, 2008-09. Therefore, respectfully following the decision of the coordinate bench of Hon'ble ITAT in assessee's own case for AY 2007-08 and 2008-09 and in order to maintain judicial consistency which is applicable mutatis mutandis in the case of the assessee, we upheld the order of Ld. CIT(A) in the present appeal for AY 2010-11 and dismiss the appeal filed by the revenue." 7. Respectfully following the said decisions, we hold that the assessee had not concealed any income or furnished inaccurate particulars of income. The exemption u/s. 11 of the Act was denied to the assessee on a mere change of opinion. The issue of whether the assessee trust is entitled for exemption u/s. 11 of the Act is highly debatable. The claim made u/s. 11 of the Act was also appears to be bonafide claim and there is no concealment of income or furnishing inaccurate particulars by assessee. In the circumstances, we delete the penalty levied u/s. 271(1)(c) of the Act. 8. In the result, appeals of the assessee are allowed. Order pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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