Case Details: Director of Income-tax (International Taxation) vs. Niko Resources Ltd - [2025] 180 taxmann.com 816 (Gujarat)
Judiciary and Counsel Details
- Bhargav D. Karia & Pranav Trivedi, JJ.
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Varun K. Patel for the Appellant.
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B S Soparkar for the Respondent.
Facts of the Case
The assessee-company, incorporated in Canada and engaged in the exploration of natural gas and oil, had entered into a joint venture with a state corporation and executed production sharing contracts with the Government of India for oil and gas fields in Gujarat. For A.Y. 2004-05, it filed a return declaring Nil income processed under section 143(1).
The case was selected for scrutiny and assessment under section 143(3), which determined the total income of about Rs. 180.28 crores after disallowances and initiated penalty proceedings under section 271(1)(c).
In response, the assessee filed an appeal before the CIT(A), wherein the CIT(A) deleted the penalty. Aggrieved by the order, the AO filed an appeal to the Tribunal. The Tribunal also upheld the deletion of the penalty. The matter reached before the High Court
High Court Held
The High Court held that the AO had not made any addition to the income of the assessee under section 143(1) for furnishing inaccurate particulars of income. The AO had made additions to the assessee’s income during the regular assessment proceedings, which were confirmed by the CIT(A). Thus, the additions to the assessee’s income were made under section 143(3).
The additions to the income of the assessee under section 143(3) would not amount to the furnishing of inaccurate particulars of income. Subsequently, the assessee filed an appeal before the Tribunal, which confirmed the additions to the assessee’s income, and the penalty proceedings were initiated accordingly.
The Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. held that the word ‘particulars’ used in section 271(1)(c) connotes the details of the claim made. The assessee must have furnished inaccurate particulars of his income. Where no information given in the return is found to be incorrect, the assessee cannot be held guilty of furnishing inaccurate particulars.
Since no addition was made under section 143(1) for furnishing inaccurate particulars of income, no penalty could be levied upon the assessee.
List of Cases Reviewed
- Orders passed by Tribunal in ADIT v. Niko Resources Ltd. [ITA No. 1608 (Ahd) of 2009, dated 25-11-2011]
- Asstt. DIT v. Niko Resources Ltd. [ITA Nos. 1605 to 1607 (Ahd) of 2009, dated 31-10-2011] [Para 18] Affirmed
List of Cases Referred to
- CIT v. Reliance Petroproducts (P.) Ltd. [2010] 189 Taxman 322 (SC)/[2010] 322 ITR 158 (SC) (para 15)
- Unison Hotels Ltd. v. Dy. CIT [2013] 40 taxmann.com 237 (Delhi) (para 17)
- CIT v. Citi Tiles Ltd [2014] 46 taxmann.com 344 (Gujarat)/[2015] 370 ITR 127 (Gujarat) (para 17)
- Niko Resources Ltd. v. Asstt. CIT [2017] 88 taxmann.com 691 (Gujarat)/[2017] 395 ITR 301 (Gujarat) (para 18).
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