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II. Direct Tax Case law:
1. CIT Vs. HCIL Kalindee ARSSPL, ITA No. 480/2012, Date of Decision: 29-07-2013, Delhi High Court
Section 271(1)(c ) of the Income tax Act, 1961
Whether
penalty u/s 271(1)(c ) of the Income tax Act, 1961 is attracted where
deduction has been claimed on the basis of Chartered Accountant’s
Certificate being a statutory requirement under law.
Held_Yes
The assessee
had claimed deduction u/s 80IA of the Act and also filed a copy of Form
No.3CB and 3CD and Form No.10CCB in support. The deduction was denied
and addition was made. The assessee did not prefer an appeal for the
matter. However, Concealment penalty proceedings u/s 271(1)(c) were
initiated and penalty was imposed rejecting the contention of assessees
that it had acted bonafidely as they had relied upon opinion in view of
the forms which had been filled up by the Chartered Accountant
It was held
that for claiming deduction u/s 80IA of the Act, filing of certificate
and forms signed by the Chartered Accountant is mandatory and a
requirement of law. All returns, where deduction u/s 80IA is claimed,
must have such certificates and forms. Mere filing of the said
forms/certificate cannot absolve and protect an assessee who furnishes
in-accurate particulars. Merely because the assessee complies with the
statutory procedural requirement of filing the prescribed form and
certificate of the Chartered Accountant, cannot absolve the assessee of
its liability if the act or attempt in claiming the deduction was not
bonafide.
(Please click here for judgment)
2. M/s
Usha Micro Process Controls Ltd. Vs. Commissioner of Income Tax, ITA
No. 101/2000, Date of Decision: 05-08-2013, Delhi High Court
Section 37 of the Income tax Act, 1961
Whether
amount paid on account of fine in lieu of confiscated goods by the
Custom Authorities are allowable under section 37 of the Income tax Act,
1961.
Held_Yes
The petitioner
had imported some software during the year under consideration. It had
sought to re-export the software after making some declarations. The
customs authorities held the appellant’s action illegal and directed it
to pay differential duties. In addition its Managing Director was made
personally liable to penalty. The goods were sought to be confiscated.
The matter was carried in appeal. Eventually the personal penalty was
deleted but fine in lieu of confiscation was upheld to the extent of Rs.
4,00,000/-. The assessee had claimed Rs. 4,00,000/- as deductible under
Section 37(1) of the Income Tax Act.
It was
observed that whenever an authority has to decide whether to grant or
refuse deduction u/s 37(1) of the Act, the governing test would be
whether the amount payable is compensatory in nature. On a proper
application of the ruling of Supreme Court in M/s. Prakash Cotton Mills
Pvt. Ltd. v. Commissioner of Income Tax (Central), Bombay, 1993 (201)
ITR 684, it was held that the amount of redemption fine was compensatory
in nature and therefore, fell outside the mischief of explanation of
Section 37(1) of the Income Tax Act.
(Please click here for judgment)
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