Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: empanelment :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: articles on VAT and GST in India :: TDS :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: ACCOUNTING STANDARD :: cpt :: VAT Audit
 
 
From the Courts »
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)
 Ashok Prapann Sharma vs. CIT (Supreme Court)a
  Vatsala Shenoy vs. JCIT (Supreme Court)
  Vatsala Shenoy vs. JCIT (Supreme Court)
 M.K.Overseas Pvt. Ltd. Vs. Pr.Commissioner Of Income Tax-06
 Arshia Ahmed Qureshi Vs. Pr. Commissioner Of Income Tax-21
 CHAUDHARY SKIN TRADING COMPANY Vs. PR. COMMISSIONER OF INCOME TAX-21
  Sushila Devi vs. CIT (Delhi High Court)
  Vatsala Shenoy vs. JCIT (Supreme Court)
 Deputy Director Of Income Tax Vs. Virage Logic International

T.C.N.S. Ltd. 3, Community Centre Saket New Delhi 110 017 Vs. ACIT, Circle 16(1) New Delhi
October, 07th 2014
              IN THE INCOME TAX APPELLATE TRIBUNAL
                  DELHI BENCHES : "H" NEW DELHI

                 BEFORE SHRI J.SUDHAKAR REDDY, AM
                   AND SHRI GEORGE GEORGE K, JM

                             ITA No: 3069/Del/2013
                                 AY : 2003-04

T.C.N.S. Ltd.                     vs.    ACIT, Circle 16(1)
3, Community Centre                      New Delhi
Saket
New Delhi 110 017

PAN: AAACT 5915 C

(Appellant)                                 (Respondent)

                      Assessee by : Shri M.S.Sahni, Adv.
                   Department by: Sh. Rakesh Kumar, Sr.D.R.


                           ORDER

PER GEORGE GEORGE K, JUDICIAL MEMBER


      This is an appeal at the instance of the assessee and is directed
against the order of the Ld.CIT(Appeals) dt. 28.2.2013. The order of the
Ld.CIT(Appeals) arises out of the order of the AICT passed u/s 271(1)(c ) of
the Act imposing a penalty of Rs.2,48,600/-. The relevant Assessment Year
is 2004-05.

2.    The assessee has raised several grounds in its Memorandum of Appeal.
However the crux of the issue relate to whether the CIT(Appeals) is justified
in confirming the imposition of penalty u/s 271(1)(c ) of the Act.


3.    The facts of the case are as follows. The assessee is a company. For
the relevant Assessment Year return of income was filed declaring `nil' income
as per the normal computation of income. However under the provisions of
S.115 JB of the Act, the assessee disclosed book profit of Rs.1,40,83,499/-.
While calculating the book profits of the assessee it had claimed deduction of
                                ITA No. 3069/Del/2013
                               Assessment Year 2003-04
                                T.C.N.S. Ltd., New Delhi




Rs.31,56,838/- u/s 80 HHE of the Act. Assessment was completed u/s 143(3)
of the Act on 20.3.2006 assessing the book profits at Rs.1,40,83,499/-.
Thereafter a notice u/s 148 of the Act was issued since the assessee had
claimed deduction u/s 80HHE of the Act, while computing book profits u/s
115 JB of the Act.      In response to      the    notice u/s 148 of the Act,       the
assessee filed income tax return, wherein,           he had declared an income of
Rs.1,72,40,338/- and deduction u/s 80 HHE was not claimed while working
out the book profits u/s 115 JB of the Act. Assessment was completed u/s
143(3) r.w.s. 148 of the Act accepting the return filed.


4.    The Assessing Officer initiated penalty proceedings u/s 271(1)(c ) of
the Act and imposed a penalty of Rs.2,48,600/- for making a claim of
deduction u/s 80 HHE of the Act while computing book profits u/s 115 JB of
the Act.


5.    As against the imposition of penalty,            the assessee filed an appeal
before the First Appellate Authority.         The Ld.CIT(Appeals) confirmed the
penalty     imposed u/s 271(1)(c ) of the Act.             The relevant finding of the
CIT(Appeals) read as follows.


          "8. The appellant has failed to prove that the explanation given was
          bonafide and there was full disclosure of facts. The provisions of
          Explanation 1(b) to section 271(1)(c ) are applicable because the
          assessee has offered an explanation before the Assessing Officer
          which he is not able to substantiate and has also failed to prove that
          such explanation is bona fide and that all the facts relating to the
          same and material to the computation of his total income have been
          disclosed by him. The additions made have been accepted by the
          appellant. Under the present system, only a very small percentage of
          returns is picked up for scrutiny. Had this case not been reopened u/s
          147, the necessary additions would not have been made and the
          appellant's suppressed income would not have come to light. The
          penalty u/s 271(1)(c ) imposed is the minimum imposable in this case.
          Considering the facts, the penalty u/s 271(1)(c ) is justified and is
          upheld. The grounds are dismissed."


                                                                              Page 2 of 5
                              ITA No. 3069/Del/2013
                             Assessment Year 2003-04
                              T.C.N.S. Ltd., New Delhi



6.     The assessee company being aggrieved is in appeal before us. The
Ld.A.R. for the assessee reiterated the submissions made before the Income
tax authorities. The Ld.D.R. present was duly heard on the matter.


7.     We have heard rival submissions and perused the material on record.
In the original assessment proceedings the assessee had furnished to the
Assessing Officer the complete calculation of deduction claimed u/s 80HHE of
the Act while working out the book profits u/s 115 JB of the Act.          The
contention of the assessee against the imposition of penalty u/s 271(1)(c ) of
the Act was that deduction u/s 80 HHE was claimed due to misconception
and inadvertence and there was no willful intent to conceal any income or
furnishing any inaccurate particulars of such income. It was the submission
of the assessee that it was a bonafide mistake on the part of the Chartered
Accountant and the same is evident from the audit report     and Form No.10
CCAF accompanied with the audit report.


7.1.   In the instant case, the CIT(Appeals) in the impugned order has held
that provisions of Explanation 1B to S.271(1)(c ) of the Act are applicable
because the assessee has offered an explanation before the Assessing Officer
which he is not able to substantiate. In this background we have to examine
whether the claim made by the assessee of deduction u/s 80 HHE of the Act
while calculating book profits is a bonafide claim or not. The assessee while
filing the income tax return in the original assessment proceedings had lost
sight of provisions of Sec.80A(2) of the Act according to which no deduction
u/s 80HHE of the Act was allowable if it exceeds the gross total income of the
assessee.   On facts on record and on perusal of the        audit report, the
Chartered Accountant concerned has also made a mistake in making a claim
of deduction u/s 80 HHE of the Act. In the original assessment proceedings
book profit was calculated at Rs.1,40,83,499/- and tax has been paid for
Rs.11,09,576/-.   In the return pursuant to s.148 notice the total income
declared    u/s 115JB was Rs.1,72,40,338/- and           tax payable       was





                                                                     Page 3 of 5
                               ITA No. 3069/Del/2013
                              Assessment Year 2003-04
                               T.C.N.S. Ltd., New Delhi

Rs.13,57,677/-. On making the claim of deduction u/s 80HHE of the Act
there is a short deduction of tax amounting to Rs.2,78,432/- which includes
also the interest. The calculation of deduction u/s 80HHE while computing the
book profit u/s 115JB was also filed in the computation statement.              As
mentioned earlier, assessee has declared substantial income and tax sought
to be evaded is only Rs.2,78,432/- (which also includes interest). Therefore
the contention of assessee that 80 HHE deduction was made by inadvertence
is only reasonable and the same cannot be brushed aside as not bonafide.
This is also evident from the fact that the Chartered Accountant of the
assessee has also committed an error in claiming deduction u/s 80HHE of the
Act in the audit report accompanying the return of income. Therefore, under
the facts and circumstances of the case we are of the opinion that there is
no willful default on the part of the assesse in furnishing inaccurate
particulars of income warranting imposition of penalty u/s 271(1)(c ) of the
Act. Therefore the order of CIT(Appeals) confirming the imposition of penalty
is set aside.


8.     In the result the appeal of the assessee is allowed.


Order pronounced in the Open Court on 24th September, 2014.


                    Sd/-                                         Sd/-

       (J. SUDHAKAR REDDY)                                (GEORGE GEORGE K)
       ACCOUNTANT MEMBER                                  JUDICIAL MEMBER


Dated: the 24th September, 2014



*manga




                                                                        Page 4 of 5
                            ITA No. 3069/Del/2013
                           Assessment Year 2003-04
                            T.C.N.S. Ltd., New Delhi




Copy of the Order forwarded to:

1.Appellant;
2.Respondent;
3.CIT;
4.CIT(A);
 5.DR;
6.Guard File

                                                        By Order




                                                       Asst. Registrar




                                                                    Page 5 of 5

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions