×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
Appellant, Ochoa Laboratories Ltd. (hereinafter referred to as ‘the assessee’), by filing the present appeal sought to set aside the impugned order dated 08.07.2016 passed by the Commissioner of Income-tax (Appeals)-7, New Delhi , affirming the penalty order dated 26.13.2016 passed u/s 271(1)(c) of the Income Tax Act, 1961 (for short ‘the Act’), qua the assessment year 2009-10 on the amended grounds inter alia that :-
“1. That the order of the Ld. CIT(A) confirming the action of the Ld. AO in levying penalty of Rs. 15,50,224/- u/s. 271(1)(c) is against the provisions of law, facts circumstances of the case and deserves to be quashed.
2. That the Ld. CIT(A) has erred in law in confirming penalty under section 271(1)(c) levied by the AO which is arbitrary and contrary to the provisions of law as show cause notice issued by the Ld. AO is general in nature with mentioning specific charge of imposition of penalty.
3. That the issue in question now squarely covered by the decisions of the co-ordinate Benches of the ITAT, Delhi Benches in case of Sanjay Mitra Vs. DCIT, ITA no. 5206/Del/2016 and Ashwini Mongia Vs. ITO, ITA no. 6044/Del/2015. The penalty of Rs. 15,50,224/ needs to be deleted.
4. That even on merits the Ld. CIT(A) has rred on facts and in law as the material placed on reco d was not considered in its proper perspective leading to erroneous conclusion.
5. That the order of the Ld. CIT(A) confirming the erroneous order of the AO is bad in law and against the facts of the case.”
2. Briefly stated that facts necessary for adjudication of the controversy at hand are : on the basis of completed assessment u/s. 143(3) of the Income Tax Act, 1961 (for short the ‘Act’) at the income of Rs. 11,35,52,137/- by making addition of Rs. 45,60,824/-, 54,725/- and 88,53,764/- on account of disallowance of Sales Promotion , expenses, disallowance of excess depreciation on disallowance of FBT, PF & ESI respectively, out of which addition of Rs. 88,53,764/- has been deleted by the Ld. CIT(A) in respect of disallowance of FBT, PF, ESI and IT. The AO initiated the penalty proceedings by way of issuance of notice u/s 274 read with section 271 of the Act for disallowance of Sales Promotion expenses of Rs. 45,60,824/- only. Declining the contention raised by the assessee that the entire expenditures was supported by bills vouchers etc. and most of the payments were made through banking channel and genuineness of the expenditure has not been doubted and that there was no deliberate concealment of any particulars of income, AO levied the penalty of Rs. 15,50,224/- @ 100% and Section 271(1)(c) of the Act.
3. Assessee sought to raise one legal ground challenging the show cause notice issued by the AO for initiation of the penalty u/s 271(1)(c) of the Act as ground no. 2 in the amended grounds of appeal dated 01.04.2019, which is allowed as the legal ground as to the defective show cause notice can be raised, at any stage of the proceedings and is also necessary for complete adjudication of the controversy at hand.
4. Assessee carried the matter before Ld. CIT(A) by way of filing the appeal who has confirmed the penalty by dismissing the appeal. Feeling aggrieved the assessee has come up before the Tribunal by way of filing the present appeal.
5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
6. undisputedly, quantum proceedings qua addition of Rs. 45,60,284/- on account of disallowance of Sale Promotion expenses are pending before the Hon’ble High Court It is also not in dispute that addition on account of disallowance of Sales Promotion expenses have been made for want of furnishing supporting details of such expenses, which the assessee has sought to produce during penalty proceedings and has not been provided with any such opportunity.
7. In the backdrop of the aforesaid undisputed facts & circumstances of the case, order passed by the lower revenue authorities and arguments addressed by the Ld. Authorized Representatives of the parties to the appeal, the sole question arises for determination in this case is:-
“As to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of such income during assessment proceedings?”