Case Law Details
Advocate Akhilesh Kumar Sah
Jefferris India Pvt. Ltd. Vs. ACIT (ITAT Mumbai)
When there was no willful concealment and mistake involved human error, penalty under section 271(1)(c ) deleted
Recently, in Jefferris India Pvt. Ltd. vs. ACIT [ITA No. 7397/Mum/2018 (A.Y. 2011-12), decided on 28-03-2019], brief facts of the case were that the assessee company filed its return of income for A.Y. 2011-12 declaring income of Rs. 9,78,51,166/-. The return of income was revised on 25.05.2012 declaring income of Rs. 9,58,51,166/-. In the revised return of income, the assessee revised reduction of disallowance under section 40(a)(ia) of Rs. 20,00,000/-, withdrawal of Minimum Alternative Tax (MAT) credit of Rs. 80,77,413/- and deposit of self-assessment tax. The return was selected for scrutiny. The assessment was completed under section 143(3) on 23.12.2015. During the assessment, the AO noted that the authorised capital of the assessee was increased from Rs. 36 Crore to Rs. 230 Crore. The AO called rates and taxes. On perusal of the details, the AO noted that stamp duty of Rs. 97,00,000/-, fee of Registrar of Company (ROC) of Rs.38,80,000/- and franking charge of Rs. 22,50,000/- were debited for increase of authorized share capital. The said expenditure was incurred subsequent to the commencement of business and the same was capital in nature incurred for acquiring benefit for enduring nature not allowable under section 35D. The assessee though disallowed the stamp and ROC fees while computing its income, however, the said franking charge was not disallowed. The AO disallowed the said franking charge Rs. 22,50,000/-. While passing the assessment order, the AO initiated the penalty under section 271(1)(c). The AO levied the penalty of 100% of the tax sought to be evaded. The AO worked out the penalty of Rs. 7,64,775/-. No appeal in quantum assessment was filed by assessee. However, the assessee unsuccessfully challenged the levy of penalty under section 271(1)(c) before the CIT(A).
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