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TMI Blog2018 (10) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... he ambiguity was pointed out by the AO. Secondly, the ld. CIT(A) in the impugned order has given various reasonable possibilities to commit the mistake by the assessee while computing the book profit in the return of income, which stood corrected by the assessee by filing the revised computation of book profit. The revised computation of book profit so filed by assessee stood accepted by the AO. In such view of matter, various decisions relied by the ld. DR are not applicable to the present case having not been based on parallel facts. Thus we uphold the order of the Ld. CIT(A) and he has rightly deleted the penalty imposed by the AO - decided against revenue - ITA No. 2295/Del/2015 - - - Dated:- 1-10-2018 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Department : Shri Vijay Kumar Tiwari, Sr.DR For The Assessee : Shri Sanjiv Jain, CA ORDER PER L.P. SAHU, A.M This is an appeal filed by the revenue against the order of the Ld. CIT(OSD)(Appeals)-8, Delhi dated 27.2.2015 for the assessment year 2011-12 on the following grounds :- 1. Ld. CIT (A), has erred in law and on facts that the calculation of Tax u/s 115J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. The case was selected for scrutiny and statutory notices were issued to the assessee. During the course of assessment proceedings Ld. AO observed that the assessee had disallowed expenses of ₹ 57,028/- u/s 14A incurred against exempt income and during the course of assessment proceedings assessee filed revised computation of income wherein it disallowed ₹ 2,36,105/- u/s 14A which was accepted by the Ld. AO. During the course of assessment proceedings Ld. AO observed that the assessee has entered into the business of trading in mutual fund units and has also derived income from interest dividend and income from sale of investments and the business activity was the same as in the previous year. Since the book profit as per the audited balance sheet, profit and loss account of the assessee company was more, therefore, the tax liability was determined by assessee u/s 115JB of the Act and computed book profit u/s 115JB of ₹ 10,98,142/- and paid taxes thereon. During the course of scrutiny proceedings the assessee also filed the revised computation u/s 115JB of the Act and computed the book profit at ₹ 2,02,95,426/- which was accepted by the AO. However, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company primarily engage in the financial activity. It is quite unbelievable that they are not aware about the taxability of long term capital gain towards book profit u/s 115JB. The assessee has not revised the return but filed only revised computation. Though, case was selected under scrutiny and notice u/s 143(2) was issue on 24.09.2012 even then it has not revised the return/computation u/s 115JB immediately thereafter. However, when first detail questioner issued on 11.12.2013 the assessee could ascertain/sensed that there is no escapement in respect of such non-disclosure of L TGB. in book profit u/s 115JB only thereafter, he immediately filed the revised computation on 20.12.2013. so this disclosure cannot be taken as voluntarily on the part of assessee. In this regard, the judgement in the following High Court cases on the issue of section 271 (1 )(c) is submitted for your kind consideration: 1. Union of India v. Dharamendra Textile Processors [(2007) 295 ITR 244] (Copy Enclosed) where Hon'ble Supreme Court held that Penalty under section 271 (1 )(c) is a civil liability for which willful concealment is not an essential ingredient for attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961. 7. B.A. Balasubramaniam Bros. Co Vs CIT [116 Taxman 842, 2361TR 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 271 (1 )(c). 14. Manoj Kumar Singhal Vs CIT 2015-TIOL-588-HC-P H-IT If an assessee has clearly declared gifts received from an outsider in the accounts books, the mere fact that the donor was not found at the given address, can be a ground to impose penalty for concealment. 15.Grass Field Farms And Resorts P. Ltd. Vs DCIT [2016] 388 ITR 395 (Raj) Taking into consideration the material on record and voluminous documents found during the course of survey, the statements and offering of income during the course of survey, could not be said to be voluntary as it was a clear cut admission. 16.Maharaj Garage Co. Vs CIl [2017] 85 taxmann.com 86 (Bombay) Where opportunity of being heard was already given to assessee under section 274 before imposing penalty under section 271 (1 )(c), no further opportunity of being heard was to be given while obtaining previous approval of lAC. 6. On the other hand Ld. AR reiterated the submissions made before the ld. CIT(A) and relied upon his order. It was also submitted that there was no concealment of income. Only it was the mistake in the computation made by the assessee u/s 115JB for computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11-12-2013. On this basis, the Ld. AR of the appellant pleaded that there was no detection by the Ld. AO on this fact. The appellant has noticed mistake and revised the computation and also paid the taxes on 21-01-2014. They further pleaded that appellant had committed an inadvertent and bonafide error and had not intended to attempt to either conceal this income or furnish inaccurate particulars. They have further emphasized that the amount of exempted interest, dividend income and long term capital gains were shown in the respective columns in the return of income. However, while reducing the exempted income which are mentioned u/s 10 they have wrongly mentioned the income exempted u/s 10(38) of the IT Act and pleaded that due to this mistake the book profit was wrongly calculated. They further explained that Ld. Assessing Officer has mentioned this fact in the assessment order regarding the filing of revised computation and payment of taxes. They pleaded, since the wrong calculation of book profit was due to inadvertent mistake, penalty is not leviable. Further they pleaded that there was no concealment of particulars or furnishing of inaccurate particulars. It is correct tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book profit. In view of these facts, I hold that penalty levied by the Ld. AO u/s 271(1)(c) is not justified. Hence it is deleted. 8. From the above order of the Ld. CIT(A) it is clear that the assessee had produced balance sheet and profit loss account before the AO during the course of assessment proceedings and the income computed in the profit and loss account has been accepted and during the course of assessment proceeding the assessee filed revised computation which has also been accepted by the Ld. AO. Mere differences were in computation of book profit is not a concealment of income particularly when the assessee had filed revised computation of book profit showing correct figure thereof, on which the AO has no objection. 9. The main thrust of DR s contention is that it was only when the assessee was cornered by issuing notice u/s. 143(2) dated 11.12.2013 that the assessee filed the revised computation of book profit. In this context, it is significant to note that the AO issued questionnaire which does not contain even a whisper on this issue. Therefore, it can hardly be said that the assessee filed revised computation only when the ambiguity was pointed out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008] 218 CTR (SC) 359 ; [2008] 11 DTR (SC) 185 distinguished. 15. On the facts and circumstances we are of the view that the issue involved is squarely covered by Division Bench Decision of this court in the case of Aleo Manali Hydro Power (P) Ltd. (supra). 16. The book profit disclosed by the assessee for the purpose of the liability of tax under section 115J is relevant and not the income determined under the provisions of the Income-tax Act. 17. The Tribunal, on the facts and circumstances of the case, has further recorded the finding that, on the facts and in the circumstances of the case and on the bona fide of the explanation given by the assessee and the disclosure made in the accounts accompanying the return, no penalty is leviable. Similarly, ITAT, Chandigarh Bench in Aarge Drugs (P) Ltd. vs. DCIT, (2015) 61 taxmann.com 254 (Chandigarh-Trib.) on the identical issue has held as under : Penalty under section 271(1)(c) is levied for concealing or furnishing inaccurate particulars of income. Income is understood to mean 'the money that a person earns from work, business etc.' The definition of 'income' under section 2(24), also in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, penalty imposed under section 271(1)(c) qua revised MAT credit is to be deleted. [Para 9.5] In Compucom Software Ltd. vs. DCIT (2017) 82 taxmann.com 256, Jaipur Bench of Tribunal has held as under : Held that the assessee has given the full and complete details of the short-term loss accrued to it and also dividend earned by him. The assessee has paid the tax on the book profit and was not assessed under the normal provisions of the Income-tax Act. If the assessee was to be assessed under normal provisions of the Act, there is no tax liability. The Assessing Officer while computing the tax liability has given the calculation under normal provisions of law as well as under Minimum Alternate Tax. From the perusal of order it is crystal clear that the failure on the part of the assessee to give effect to section 94(7) has no bearing on the payment of tax to be paid, therefore no penalty can be imposed on the basis of tax sought to be evaded, as there is no evasion of any tax liability. Therefore, the order passed by the Assessing Officer and the Commissioner (Appeals) on imposition of the penalty was to be set aside. 9. In view of the above discussion and re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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