The Revenue’s submission that prima facie satisfaction of the AO need not be reflected at the stage of initiation is not acceptable. The presence of prima facie satisfaction for initiation of penalty proceedings was and remains a jurisdictional fact which cannot be wished away even post amendment. If an interpretation such as the one proposed by the Revenue is accepted then s. 271 (1B) will fall foul of Article 14 of the Constitution as it will then be impregnated with the vice of arbitrariness. The AO would then be in a position to pick a case for initiation of penalty merely because there is an addition or disallowance without arriving at a prima facie satisfaction with respect to infraction of s. 271 (1)(c).
The effect of Vinod Solanki vs. UOI (233) ELT 157 (S.C.) is that in criminal or quasi criminal proceedings, a person accused of commission of offence under FERA has not to prove to the hilt that confession has been obtained from him by inducement or threat by the person in authority. However, when confession had been retracted, the Court must bear in mind the attending circumstances and other relevant factors to come to conclusion whether the confession was voluntary and was not obtained by any inducement, threat or force. At the same time, mere retraction of the confession may not be sufficient to make confessional statement irrelevant for the purpose of quasi criminal proceedings and the Court is obligated to take into consideration the pros and cons of confession and retraction made by the accused.
Sale & Lease back transactions are not a “sham” The assessee, a State Electricity Board, sold energy saving devices on which 100% depreciation was permitted and took the same assets on lease and claimed a deduction for the lease rent. …
CIT vs. Punjab State Electricity Board (Punjab & Haryana High Court) Read More »
A Co-op housing society is a mutual association and even transfer fees received from transferee members is exempt on the ground of mutuality because the fee can be appropriated only if the transferee is admitted to membership. If the transferee is not admitted, the moneys will have to be refunded. However, if an amount is received more than what is chargeable under the Bye-laws or Government directions, the society is bound to repay the same and if it retains the same it will be in the nature of profit-making and that amount will be chargeable to tax.
The judgment in Dharmendra Textile cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. What has been laid down is that qualitative difference between criminal liability u/s 276C and penalty u/s 271(1) ( c) had to be kept in mind and approach adopted to the trial of a criminal case need not be adopted while considering the levy of penalty. Even so, the concept of penalty has not undergone change by virtue of the said judgment. Penalty is imposed only when there is some element of deliberate default and not a mere mistake. In view of the finding that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax, penalty was not leviable.
Once the Apex Court in Hongo India 236 E.L.T. 417 has held that the High Court has no power to condone delay in filing Appeal under s. 35 G of the Excise Act, we have no option but to hold that this Court has no power to condone delay under s. 260 A because s. 260 A is pari materia with s. 35 G of the Excise Act. As the appeals were delayed, they had to be dismissed
In view of the retraction of the statement and the decision of the Supreme Court in Vinod Solanki V/s. UOI 2008 (16) Scale 31, the retracted confession can be relied upon only if there is independent and cogent evidence to corroborate the confession
The reliance on UOI v. Dharamendra Textile Processors 306 ITR 277 and the contention that the law on penalty had “drastically changed” and that penalty becomes “automatically leviable” whenever an addition is made in quantum proceedings which attains finality is “to state the least, absolutely absurd”. S. 271 (1) (c) can be imposed only if there is concealment of income or furnishing incorrect particulars and not for an unacceptable plea for exemption of tax-liability.
Search action u/s 132 can be initiated only if the designated authority forms a reasonable belief on the basis of information that one of the three conditions of s. 132 exist. However, it is not the mandate of s. 132 that the reasonable belief recorded by the designated authority must be disclosed to the assessee.
(1) The ICAI has the power to direct the name of a member to be removed from the Register for “misconduct” and consequently the member would lose his certificate and the right to practice. This is a matter having serious civil consequences and thus the power can only be exercised in accordance with law and the rule of fairness. Fairness should not only appear to have been done but should actually be done in such proceedings. To many a man, his professional reputation is his most valuable possession. It affects his standing and dignity among his fellow members in the profession and guarantees the esteem of his clientele;
(2) The law requires the principles of natural justice to be followed even in pure administrative action. It is a fundamental principle of fair hearing incorporated in the doctrine of natural justice and as a rule of universal obligation, that all administrative acts or decisions affecting the rights of the individual must comply with the principles of natural justice and the person or persons sought to be affected adversely must be granted not only an opportunity of hearing but a fair opportunity of hearing. This is all the more required when the reputation of a professional is involved and the damages may be irreparable and irretrievable. It is mandatory for the Disciplinary Committee to adhere to the principles of natural justice;