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TMI Blog2018 (9) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, appeal filed by the assessee is hereby allowed. - ITA No.1421/Del./2015 - - - Dated:- 14-9-2018 - Shri G.D. Agrawal And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Gautam Jain, Advocate Shri Piyush Kumar Kamal, Advocate Shri Lalit Mohan, CA For the Revenue : None ORDER PER KULDIP SINGH, ACCOUNTANT MEMBER : The appellant, M/s. Times Internet Limited (hereinafter referred to as the assessee ) by filing the present appeal, sought to set aside the impugned order dated 03.11.2014 passed by Ld. CIT (Appeals)-19, New Delhi qua the assessment year 2008-09 on the grounds inter alia that :- 1. That the order of [earned Commissioner of Income Tax (Appeals) imposing penalty on the disallowance made of ₹ 16,35,151/- representing expenditure incurred on upgradation of website and, disallowed as capital expenditure in an order of assessment dated 13.12.2010 u/s 143(3) of the Act is in excess of jurisdiction. 1.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the learned Assessing Officer in the order u/s 271(1)(c) of the Act has held that the issue was a debatable issue and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the penalty levied on account of disallowance u/s 14A of the Act, upheld the penalty in respect of expenditure on increase in authorized capital but enhanced the penalty in respect of capital expenditure on website creation and development. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. Revenue department has not preferred to put in appearance and consequently, we proceeded to decide the present appeal with the assistance of the ld. ARs for the assessee as well as on the basis of documents available on the file. 5. We have heard the ld. ARs for the assessee to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 6. The ld. AR for the assessee company challenging the impugned order contended inter alia that show-cause notice dated 13.12.2010 issued by the AO u/s 274, available at pages 82 83 of the paper book, and further notice dated 29.04.2011 and 02.06.2011, available at pages 84 85 of the paper book, are not a valid notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me at 11.30 AM/PM on 14.1.2011 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)(c) within 15 days. Sd/- (CHATURBHUJ DAS) Dy. Commissioner of Income Tax, Circle 7 (3), Mumbai Income-tax Officer 8. Undisputedly, additions made against the assessee during quantum proceedings have already been confirmed. It is settled principle of law that the penalty cannot be imposed merely on the ground that additions made in the income of the assessee has been confirmed rather to proceed with imposition of penalty u/s 271(1)(c), the AO has to prove that there was concealment of particulars of income or assessee has furnished inaccurate particulars of such income. 9. Bare perusal of the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the assessment order. l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that the explanation offered is not bonafide, an order imposing penalty could be passed. m) If the explanation offered, even though not substantiated by the assessee, but is found to be bonafide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2004-05 by the Tribunal in ITA No.381/Del/2009 dated 17.08.2015 , affirmed by the Hon ble Delhi High Court. 12. So, when the assessee has come up with bonafide claim, even if it is not accepted, it would not per se tantamount to furnishing inaccurate particulars so as to attract the penalty proceedings u/s 271(1)(c) as has been held by Hon ble Delhi High Court in case cited as CIT vs. IFCI Limited (2010) 328 ITR 611 (Delhi) . Operative part of the aforesaid judgment is extracted as under :- Held; dismissing the appeal, that the assessee had filed the return and furnished all particulars. The assessee had explained during the penalty proceedings that the investments were written off in the books of account and were claimed as deduction on account of loss which occurred to the assessee in the computation of total income. The Tribunal analysing the facts had expressed the view that there had been no furnishing of inaccurate particulars of such income and the assessee had declared the entire material. It was a case where a claim put forth by the assessee as regards the loss was not accepted but that would not per se tantamount to furnishing any kind of inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. 15. Furthermore, incurring of ₹ 37,52,700/- by the assessee on share capital have also been duly explained by the assessee by debiting the same under head legal and professional charges . Assessee has suo moto disallowed an amount of ₹ 7,00,000/- relating to increase in capital and RS.5,00,000/- pertaining to filing fees and ₹ 2,00,000/- on account of stamp duty in computation of income debited under the head rent, rates and taxes. All these facts go to prove that the assessee has come up with bonafide claim and even if the same is proved to be wrong, it cannot attract the provisions co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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