24 September 2010
Dear all, My asssessee , a govt co, had received notice for scrutiny. In Income tax return it had discloded interest of Rs. 200000 however It had earned the interest on accured basis 400000.Method of accounting is Mercantile. Now A.O. want to charged penalty under 271 for concealment of income,but my assesee claim that we have not received Tds certificate in time and hence we had not recognised the Income, but we are redy to disclosed it in next return as it is not possible to revised the return.. Kindly tell me Whether A.O is correct??? please quote case Law... Also tell me the procedure followed by A.O to Leavy penalty.
24 September 2010
Yes AO is correct, I tax and accounting is separate thing. Since the interest was accrued , it has to be shown in book profit. There is no reason why TDS certificate was not recived. It can be submitted at the time of assessment , some how at the time of appeal also.
But i fell there is one remedy to come out. Whether the payee of interest has taken it as expenditure in his return - is to be confirmed. If the party has not taken as expenditure- indirectly there is no loss of revenue to IT deptt.
Pls go by this line, In case, no loss of revenue, no question of penalty.
24 September 2010
The A.o can not lived penalty u/s 271C mearely not shown in return.The penalty u/s 271C can not be lived compulsary unless the intention of conceelment of income has not been prooved.If the return can not be revised than rectification u/s 154 can be done if the assessment does not complete.
25 September 2010
Thanks for reply.. But my question is how rectification of mistake is possible u/S 154 as there is no order pass by A.O?? Further,Mr. Shailesh, in form 26AS there is no tax credit avilable for the same...
26 September 2010
AS PER IT ACT 1961 RECTIFICATION U/S 154 CAN BE DONE EITHER BY A.O. OR ASSESSEE WHEN THE MISTAKE APPRANT ON RECORD.FOT RECTIFICATION U/S 154 ASSESSMENT ORDER OF A.O IS NOT REQIRED.
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