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;
In respect of AY 2001-2002, the assessee claimed that though s. 80HHC (1B) limited the deduction to 80% of the profits eligible for deduction u/s 80HHC, this limitation did not apply for purposes of “book profits” u/s 115JB and that 100% of the 80HHC profits were deductible. The Tribunal allowed the claim by relying on the Special Bench judgement in Syncome Formulations 106 ITD 193 (Mum) (SB) and the Budget speech of the Finance Minister. On appeal by the Revenue, HELD, reversing the Tribunal’s order:
(1) S. 115JB allows a deduction from the “book profits” of “the amount of profits eligible for deduction u/s 80HHC, computed under clause (a) …. of sub-section (3) …. subject to the conditions specified in that section.” Ss (3) and (3A) provide for the method for computation of profits. Once the profits are worked out, then only the profit which is eligible can be deducted. In computing the “eligibility”, the limits of s. 80HHC (1B) have to be read in.
To give effect to s. 145A, if there is any change in the closing stock at the end of the year then there must necessarily be a corresponding adjustment made in the opening stock of that year. This does not amount to giving double benefit to the assessee and would be necessary to compute the true and correct profit for the purpose of assessment.
Disqualification of Ex-Members practicing before CESTAT is constitutional
Where the assessee-airline supplied blank tickets to the travel agent, on terms that the same be sold at a minimum price and the difference between the said minimum price and the price at which the tickets were sold to the passenger was retained by the travel agent and the question arose whether the amount so retained by the agent was “commission” and whether the assessee was required to deduct tax thereon u/s 194-H of the Act, HELD, reversing the decision of the Tribunal:
(a) The relationship between the airline and the travel agent was that of a principal and agent as all the requirements of s. 182 of the Contract Act were fulfilled by the PSA. By the acts of the travel agent, a legal relationship was created between the airline and the passenger;
(b) The monies retained by the travel agent in the form of supplementary commission is not a “discount” because the travel agent never obtains proprietary rights to the tickets and has never paid a “price” for the same. Instead, the same is “commission” because it is received for services rendered on behalf of the assessee-airline and the airline ought to have deducted tax u/s 194-H;