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Income Tax : Grounds of Appeal related to the penalty imposed u/s 271(1)(c) of the Act , 1961 AY 2015-16 1. In the facts and circumstances of t...
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Income Tax : Apart from penalty for various defaults, the Income-tax Act also contains provisions for launching prosecution proceedings against...
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Income Tax : Read the detailed analysis of ITAT Ahmedabad's order canceling penalty under section 271(1)(c) of the Income Tax Act. Co-owner sta...
Income Tax : Section 270AA of the Income-tax Act, 1961 (the Act) inter alia provides that w.e.f. 1 st April, 2017, the Assessing Officer, on an...
Assessing Officer should record in the assessment order his satisfaction that the assessee had either concealed the income or furnished inaccurate particulars of income in his return before imposing penalty, we noticed that in the assessment orders passed by the Assessing Officer for the assessment year 1982-83 (which is the subject-matter of I.T.T.A. No. 29 of 2000) and for the assessment year 1983-84 (which is the subject matter of I.T.T.A. No. 33 of 2000), no such satisfaction is recorded.
The mistake on the part of the assessee is that the assessee invested a part amount of sale consideration/ capital gain in residential house instead of gross sale consideration and claimed deduction under section 54F. It is relevant to note that for claiming deduction under section 54 of the Act investment of capital gain is the requirement whereas for claiming dedication under section 54F investment of sale consideration is the condition. From the facts of the case it is a clear cut case of bona fide calculation mistake.
Merely because the Assessing Officer invoked section 50C(2) and adopted guideline value to be the actual sale consideration and made addition in the assessee’s income automatically become a case attracting penalty under section 271(1 )(c) of the Act.
Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the assessing officer for any reason, the assessee will invite penalty under Section 271(1)( c ) .
The assessee’s quantum appeal has been admitted by the High Court. If the assessee succeeds in the quantum proceedings, it would not even be necessary to consider the s. 271(1)(c) penalty proceedings and so no prejudice has been caused to the department qua the penalty proceedings.
We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars.
Accrual (or otherwise) of an income (or expenditure) is matter of fact, to be decided separately for each case, on the basis of the assessment of the obtaining facts and circumstances. The same cannot be stated as an accounting policy – which by its very nature is to be applied uniformly,
The only condition which was required to be fulfilled for getting the immunity, after the search proceedings got over, was that the assessee had to pay the tax together with interest in respect of such undisclosed income upto the date of payment.
The contention of the assessee that Audit Reports and minutes of meeting of Board of Directors were enough to prove the genuineness of the transactions in the case under consideration was unacceptable. There is no doubt that Tax Audit Report is an important document, but it cannot take place of the evidence required for claiming a deduction.
It is settled law that suspicion howsoever strong, it cannot take place of actual evidence and, hence, the contention of the revenue that assessee was in possession of cash throughout the period of six assessment years has to be rejected.
