Case Law Details
Robbs Traders & Finance Pvt. Ltd. Vs Assessing Officer (ITAT Kolkata)
ITAT Kolkata held that as assessee has provided the explanation with documentary evidence and such documents have not been held as false either by AO during assessment proceedings or during penalty proceedings. Hence, penalty u/s. 271(1)(c) not leviable.
Facts- The assessee-company has filed its return of income electronically on declaring total income of Rs.1,06,120/-. AO thereafter received information from DDIT (Investigation) exhibiting the fact that certain entry providers and hawala operators involved in providing entries of bogus LTCG, STCL and bogus business loss. AO thereafter issued notice u/s. 148 of the Income Tax Act. In response to this show-cause notice, the assessee filed its return of income and a notice u/s. 143(2) was issued and served upon the assessee. Accordingly, AO disallowed the claim of loss amounting to Rs.5,24,170/-. AO initiated penalty proceeding for furnishing inaccurate particulars.
AO imposed a penalty of Rs.1,94,760/- for furnishing inaccurate particulars of income. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- A perusal of the assessment order would reveal that ld. Assessing Officer has nowhere demonstrated as to how the loss claimed by the assessee is bogus. He only issued a show-cause notice and the Assessee withdrew its claim just in order to avoid litigation with Department. But when the Department intended to impose a penalty upon the assessee under section 271(1)(c), the assessee has contested the issue in the penalty proceeding. The ld. Assessing Officer instead of entertaining the arguments on merit summarily rejected it on the ground that all these issues must have been raised during the assessment proceedings and must have been rejected. He observed that this penalty proceeding cannot take the character of assessment and cannot sit in judgment. It is pertinent to observe that the addition is only on the admission of the assessee that it withdrew its claim. Nowhere, it has been demonstrated that the claim of the assessee was false or bogus.
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