Case Law Details
Association of Indian Forging Industry Vs ITO (ITAT Pune)
Association of Indian Forging Industry (hereinafter referred to as appellant) is a not-for-profit company incorporated u/s 25 of the Companies Act, 1956 and is also registered u/s 12A of the I.T. Act 1961, therefore eligible for exemption u/s 11 of the Act. As per the memorandum of association, the principal object of the appellant is to promote the interests of the forging industry in India. The appellant filed its return of income for the year under consideration on 28.09.2012 declaring total income at Rs. NIL after claiming exemption u/s 11 of the Act. Subsequently, the case of the appellant was selected for scrutiny through CASS and after considering the submissions of the appellant produced before the AO during the course of assessment proceedings, total income was assessed at Rs. 15,00,000/- vide order dated 30.03.2015 after making additions on account of accumulated income not utilized within the prescribed period of five years. Penalty proceedings were initiated separately against the appellant vide issue of notice u/s 274 r.w.s 271(l)(c) of the Act dated 30.03.2015 for furnishing inaccurate particulars in respect of such income. During the course of penalty proceedings, the appellant made submissions contending that the penalty shall not be levied as it has co-operated during the course of assessment and the mere omission to add back the accumulated income not utilized does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income; it is just a bonafide mistake rather than a deliberate mistake. However, the AO on going through the contentions so raised held that the same is unacceptable and therefore levied penalty u/s 271(1)(c) of the Act at minimum rate i.e. 100% of the tax sought to be evaded, thereby raising demand at Rs.4,63,500/-.
From the findings of the ld.CIT(A), Two facts emerges out i) that the amount under question on which penalty was initiated and thereafter levied remained to be disclosed in the total income by the assessee while filing his return of income for the year under consideration; ii) the assessee could not establish his bonafideness for not disclosing such details in the return of income and no documentary evidence were furnished in its support.
Before us also, as already mentioned, none appeared for the assessee, even though the notice of hearing was served at the given address and from the entire case records, it is an admitted fact that the assessee had accumulated amount of Rs.15 lakhs in F.Y. 2006-07 and as per provisions of the Act, it was obligatory on the part of the assessee to utilise the said fund up to the end of F.Y. 2011-12. Further, the assessee failed to add back and disclose the said amount in its total income declared for the year under consideration in accordance with the provisions laid down in computation of income in Section 11 of the Act. This non-disclosure has also been accepted by the assessee. In view of the examination of factual matrix in this case, we do not find any reason to interfere with the findings of the ld.CIT(A) which is hereby upheld.
FULL TEXT OF THE ORDER OF ITAT PUNE
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