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Income Tax Case law - Off market transaction is not a unlawful activity and there is no relevance in seeking details of share transaction from stock exchange when the sale was not on stock exchange and relying upon it for making addition (Click for detail)
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Direct tax code to come into force in April 2012: Pranab Mukherjee (Click for detail)
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Google India gets Income-Tax Dept notice for not revealing correct revenues (Click for detail)
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Tax and Inequality- A Central Concern for Effective Governance (Click for detail)
II. Recent Updates:
1. COMMISSIONER OF INCOME TAX Vs. RAJAJINAGAR CO-OPERATIVE BANK LTD, ITA No. 86 of 2006, Dated: 20.07.2011 HIGH COURT OF KARNATAKA
Whether penalty u/s 271C can be levied when the assessee misconstrued the provision of law and did not deduct tax at source.
Ignorance of law cannot be an excuse. But under the scheme of Income Tax Act, Section 271C provides for imposition of penalty for non-compliance of the said provision. However, Section 273-B which starts with non-obstante clause makes it clear that no penalty shall be imposable on the person or the assessee as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. Therefore the penalty payable u/s 271C is not automatic.
If the assessee is able to show reasonable cause for on-compliance of such provision, no penalty is imposable u/s 273B; as stated by the assessee, they did not properly construe this provision. By mis-construing this provision they also did not deduct tax from the interest payable to non-members. That is the bonafide mistake which they have committed. Their bonfides is demonstrated to the effect that once in a survey the said mistake was notice and pointed out immediately they have paid the tax with interest. Therefore, in the light of this undisputed facts of this case, when the CIT(A) and the Tribunal held that the same constitutes a reasonable cause and when the same is not shown to be false, the assessee has satisfied the requirement of Section 273-B, in which event, no penalty shall be imposable.
(Please click here for judgment)
2. CIT Vs. SUMANGAL OVERSEAS LTD., ITA No. 174 of 2011, Decision Delivered On: 18.11. 2011, HIGH COURT OF DELHI
The claim on bad debts to be patently wrong and erroneous in law is manifest in the conduct of the assessee in admitting the falsity of the claim and not preferring any further appeal. The CIT (A) observed that the assessee was a corporate whose accounts were duly audited by qualified Chartered Accounts and thus, the claim of bona fide mistake, due to lack of professional held is untenable on its very face. The CIT (A) rejected the claim of non-leviability of penalty on the ground that the assessment was a loss of `76,61,830/- in view of the provisions of Explanation 4(a) to Section 271(1)(c) of the Act On these facts, it is apparent that the claim was neither mala fide nor false. It was a bona fide claim preferred by the assessee, who had also disclosed all the facts relating to and material to the computation of his income. In these circumstances, the assessee fulfilled both the conditions to be outside the purview of Explanation (1) to Section 271(1)(c) of the Act.
(Please click here for judgment)
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