Trans Polyurethane Pvt. Ltd vs. DCIT (ITAT Mumbai)

DATE: March 25, 2015 (Date of pronouncement)
DATE: April 13, 2015 (Date of publication)
AY: 2003-04
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S. 271(1)(c): Mistake in claiming deduction of interest expenditure despite s. 43B attracts penalty

(i) The assessee’s case rests on its’ claim being an inadvertent mistake, and which stood corrected in the first instance. However, as pointed out by the Revenue authorities, the same cannot be said to be voluntary, but only on the Revenue making a specific enquiry in the matter. Further, the assessee’s contention of being constrained for want of necessary or relevant information is without substantiation. Why would not the bank give or share the relevant information with the assessee? It would rather be a contradiction in terms to suggest that while the assessee is in the know of the amount of the interest charged by the bank for the year, and for both its accounts, duly reflected as interest accrued and due in its balance-sheet as at the relevant year-end, it does not know if, or to the extent, the same is paid up;

(ii) The assessee is a regular assessee, well serviced by tax and audit professionals. The latter issuing a disclaimer for being unable to state the amount disallowable u/s.43B in the absence of the relevant information, defeats its case of it being an inadvertent mistake. On what basis, then, one may ask, was the deduction claimed? The only course, in the absence of the information, was that the assessee seek leave to revise its’ return, which the law even otherwise extends, i.e., where subsequently it discovers a claim as arising in the facts of its case. A legal claim, in fact, could be pressed at any stage of the assessment proceedings;

(iii) The assessee’s plea of no loss to the Revenue is of no consequence in view of the clear provision of law defining the term ‘tax sought to be evaded’, under Explanation 4 thereto, and with reference to which the penalty is to be levied (CIT v. Gold Coin Health Foods (P.) Ltd. [2008] 304 ITR 308 (SC) and Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 (SC) followed, Price Waterhouse Coopers (P.) Ltd v. CIT [2012] 348 ITR 306 (SC) distinguished)

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