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TMI Blog2024 (12) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income, in the tax audit report and also in the annual accounts. No penalty u/s. 271(1)(c) of the Act could have been imposed for concealment of income. The question of concealment would arise only if the relevant fact regarding earning of exempt LTCG was not disclosed by the assessee in the return of income. There could have been a case for furnishing of inaccurate particulars of income, for which the penalty proceeding was rightly initiated by the AO. However, considering the fact that there was amendment in this year in the provision of Section 10(38) of the Act, which stipulated that the exempt LTCG shall be taken into account in computing the book profit u/s.115JB of the Act, but there was no such corresponding amendment in Section 115JB of the Act; no motive can be imputed to the assessee. Explanation of the assessee that there was a bona-fide mistake on its part, is found acceptable. The technical glitch explained by the assessee in the first year of e-filing wherein the details relating to MAT was required to be auto filled and Form 29B could not be filled until there was liability under MAT, has not been controverted by the Revenue. Obviously these technical glitc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of book profit. Thereafter, penalty u/s.271(1)(c) of the Act was imposed vide order dated 20.05.2010 and penalty was imposed for concealment of MAT income. The appeal filed by the assessee against the imposition of penalty had travelled up to ITAT and the ITAT vide order ITA No.1275/Ahd/2012 dated 09.02.2017 had adjudicated the issue of levy of penalty u/s. 271(1)(c) of the Act and confirmed the penalty in respect of concealment of MAT income. 3. The assessee had filed a miscellaneous application u/s.254(2) of the Act with a request to rectify the mistakes apparent from the record in the order passed by the ITAT in ITA No.1275/Ahd/2012 dated 09.02.2017. The rectification was sought in respect of the first two grounds taken by the assessee, which are reproduced below: 1. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in upholding the validity of the penalty order passed by the Assessing Officer. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in upholding the order levying penalty of Rs.98,79,990 u/s. 271(1)(c) on the ground that the appellant was guilty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was not done by the assessee in the present case. Ld.Counsel for the assessee has pointed out that both the acts could not have been done by the assessee as per law itself since the limitation prescribed in law for filing revised return and form No29B had expired by the time the assessee became aware of the lapse on its part during assessment proceedings. Ld.DR was unable to controvert this contention of the Ld.Counsel for the assessee. Clearly the distinction made for not applying the decision of the Hon ble High court has been demonstrated to be incorrect. 17. Also while finding the assessee to have acted malafidely by not paying taxes on book profits by including therein exempt long term capital gain, the ITAT we have noted has not dealt with the explanation of the assessee that inclusion of exempt capital gain in Book Profits was by way of amendment in law applicable from the impugned year onwards and therefore missed out for its consideration. We agree with the Ld.Counsel for the assessee that there was a mistake apparent on record in the order of the ITAT finding the assessee to have acted malafidely by only considering the fact that the assessee had consistently been di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com 208 (Mumbai); ✓ CIT us. LakhdhirLalji - (1972) 85 ITR 77 (Guj); ✓ R. M. Bhatia vs. CIT-(1992) 193 ITR 379 (Guj); ✓ H. Lakshminarayana-61 taxmann.com 373 (Bang.); ✓ Autoriders India (P) Ltd.-191 TTJ 376 (Mumbai) 6. The Ld. Sr. Counsel has drawn our attention to the penalty notice dated 30.11.2009 issued by the AO, a copy of which was filed in a paper book. He submitted that from the said notice, it was evident that the AO had not been able to make up his mind as to whether penalty proceeding was initiated for furnishing inaccurate particulars of income or for concealment of income . He further submitted that when the charge for levy of penalty was not clearly mentioned in the notice, then the penalty cannot be levied. In this regard, he has relied upon the following decisions: ✓ Manu engineering Works- (1980) 122 ITR 306 (Guj]; ✓ Whiteford India Ltd. - (2013) 38 taxmann.com 15 (Guj); ✓ New SorathiaEngg. Co. (2006) 282 ITR 642 (Guj); ✓ Manjunatha Cotton Ginning Factory -359 ITR 565 (Kar); 7. The Ld. Sr. Counsel further submitted that when the LTCG, which was claimed as exempt income u/s.10(38) of the Act, was duly disclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efully considered the rival submissions. The first ground taken by the assessee is in respect of validity of the penalty order passed by the AO. The assessee has contended that the penalty proceeding was initiated for furnishing inaccurate particulars of income, whereas penalty order u/s. 271(1)(c) of the Act was passed for concealment of income. It is found from the assessment order that the AO had initiated penalty u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income in respect of book profit. However, in the penalty order u/s. 271(1)(c) of the Act dated 20.05.2010, the AO had imposed penalty for concealment of MAT income of Rs.9,87,99,018/-. The Co-ordinate Bench of this Tribunal in the case of Multivision Infotech P. Ltd.(supra) has held that where the penalty proceeding u/s. 271(1)(c) of the Act was initiated for furnishing inaccurate particulars of income, but the penalty was imposed for concealment of income, such order was invalid and liable to be cancelled. An identical view was taken by the Coordinate Bench, Mumbai in the case of Samson Perinchery vs. ACIT in ITA No. 4625 to 4630/Mum/2013, which was upheld by Hon ble Bombay High Court in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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