2016 (5) TMI 15

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....ssessment in this case was completed in terms of order dated 29.12.2011 passed u/s 153C read with section 153A/143(3) of the Income Tax Act, 1961 at a total income of Rs. 18,61,810/- as against NIL income declared by the assessee in its return of income filed in response to notice issued u/s 153C read with section 153A of the Act. During the assessment proceedings, the Assessing Officer noticed that the assessee had set off the brought forward business losses of Rs. 18,61,812/- of assessment year 2005-06 against the total business income of Rs. 18,61,812/- which resulted in the declaration of NIL income. The Assessing Officer issued a show cause notice to the assessee, the contents of which are extracted below:- 'In the computa....

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....unting to Rs. 18,61,812/- of Assessment Year 2005-06 against the business income of Assessment Year 2008-09 was added back to the income of the assessee and the assessment was completed at the taxable income of Rs. 18,61,812/-. Subsequently, the Assessing Officer imposed a penalty of Rs. 5,75,300/- u/s 271(1)( c) of the Act for concealment of income and filing inaccurate particulars of income. 4. On appeal, the Ld. CIT(A) confirmed the imposition of penalty but reduced it to Rs. 3,83,695/-. The relevant para of the Ld. CIT(A) order is para 5 which is being reproduced for ready reference as under:- "I have considered the facts of the case, and the written submissions of the appellant. In the instant case I find that when the appe....

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....sing Officer's action in imposing penalty u/s 271(1)(c) is upheld. However, I agree with the ARs of the appellant that the tax sought to be evaded in this case should have been Rs. 3,83,695/- which is the additional tax liability that has been cropped up due to the assessment framed u/s 153C of the I.T. Act, 1961. The tax liability as per the return of income on the book profit under MAT provisions was Rs. 1,91,604/- and the assessed tax liability determined in this case was Rs. 5,75,299/-. Therefore, the additional tax liability determined in terms of order u/s 153C r.w.s. 153A/143(3) was Rs. 3,83,6695/- which could only be attributed to the tax sought to be evaded. Therefore, the Assessing Officer in directed to modify the quantum of pena....

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....returned loss of Rs. 29,97,850/-. It was submitted that the assessee had challenged the assessment order before the First Appellate Authority and now the issue has been decided in favour of the assessee. He drew our attention to page 16 to 19 of the Paper Book which contain a copy of the order of the First Appellate Authority i.e. the Ld. CIT(A)-I, Patna wherein vide his order dated 04.07.2014, the Ld. CIT(A) has deleted the addition of Rs. 27,47,526/- for Assessment Year 2005-06. It was further submitted that as a consequence of the deletion, the carried forward losses for Assessment Year 2005-06 will be increased to the tune of Rs. 27,47,526/- which will be more than sufficient to offset the surplus for Assessment Year 2008-09. It was sub....