Case Law Details

Case Name : CIT Vs M/s. Garware Chemicals Ltd. (Bombay High Court)
Appeal Number : Income-tax Appeal No. 916 of 2012
Date of Judgement/Order : 10/03/2014
Related Assessment Year :
Courts : All High Courts (4418) Bombay High Court (801)

Assessing   Officer   has   observed   that   the contentions  of  the  Assessee  are  considered,  but  found  not  acceptable. From the contentions, what has been deduced is that the particulars of income filed by the Assessee were not correct or to put it in the language  of the Act, the Assessee has filed inaccurate particulars of its income. The Assessing  Officer  has  observed  that  the  Assessee  has  not  stated  any reasonable cause for failure on its part to report its true and correct profit. The Assessing Officer has then perused the explanation given and found
that same will not absolve the Assessee from penal proceedings.

However, the Tribunal in paragraph 6 of the impugned order has held that this was not a simple case of increase of authorized capital  because the Assessee has sought to issue to the IDBI Bank the optional  convertible debentures in view of the restructuring scheme of the said Bank. The Assessee was not trying to seek any tax advantage because even after disallowance of this expenditure, huge loss was assessed. In such
circumstances in the opinion of the Tribunal, this was not the case falling within the purview of the provisions enabling imposition of penalty.

 In any event this was not the matter which would enable the Assessing  Officer to  exercise  his  discretion  and impose penalty on the  grounds  permissible   and   particularly   under   Section   271(1)(c)   of   the  Income Tax Act, 1961. To our mind, such findings of fact and rendered in
the light of legal provision, do not give rise to any substantial question of  law.

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