TaxTMI 
TaxTMI 
2016 (8) TMI 738
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....22 [The CIT (A)] eared in upholding the imposing the penalty u/s 271 (1) (c) an amount of Rs. 9,94,122/- on account of disallowance of PF and ESIC payment u/s 43B. He has not appreciated the disclosure were made in full and proper manner in the Audit report in FORM 3CD along with return of Income. Further appellant has offered a bona fide explanation that it was in BIFR proceedings, and that the PF & ESIC authorities specifically allowed the appellant to make payment in installment. The appellant prays that the imposing penalty to be deleted." 3. The brief facts of the case are that the assessee company filed return of income for the captioned assessment year on 28-11-2003 declaring a loss of Rs. 3,37,20,850/- . 4. During the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act, it was observed by the AO that the assessee has debited an amount of Rs. 6,22,02,224/- towards payment and provisions for employees. The A.O. called for the details of expenses comprised in the above expenses which are to be allowed on payment basis u/s 43B of the Act. It was observed by the A.O. that an amount of Rs. 84,66,255/- were covered under the provisions of Secti....
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.... furnish the explanation as are required as per mandate of Section 271(1)(c) of the Act to come out of clutches of penalty leviable. The A.O. relied on the following decisions:- 1. K.P. Madhusudan v. CIT, (2001)251 ITR 99 (SC) 2. Raghuvir Soni v. ACIT, (2002) 258 ITR 239 (Rajasthan HC) 3. UOI v. Dharmendra Textiles (2008) 174 Taxman 571(SC) The AO distinguished the reliance placed by the assessee on the decision of Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Private Limited (2010) 189 Taxman 322(SC) . Thus, penalty was levied by the A.O. u/s 271(1)(c) of the Act of the minimum amount computed @ 100% of the tax sought to be evaded by the assessee , vide penalty orders dated 26-03-2012 passed by the AO u/s 271(1)(c) of the Act. 4. Aggrieved by the penalty order dated 26-03-2012 passed by the A.O. u/s 271(1)(c) of the Act, the assessee filed appeal before the ld. CIT(A) . 5. Before the learned CIT(A) , the assessee made the following submissions:- "The appellant was registered under BIFR in 1992 and scheme of revival was announced in 1996. The appellant's financial condition was precarious. In the circumstances the appellant had taken approval ....
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.... contention of the assessee that the difference between the A.O. and the assessee was on account of interpretation of section 43B of the Act is highly a debatable issue and hence penalty on such addition is not warranted is also devoid of merits. The learned CIT(A) held that the assessee has not brought on record any material to show that it paid the above dues amounting to Rs. 27,84,655/- within the due date granted under the installment scheme approved by the PF/ESIC authorities. The assessee placed reliance in the case of Reliance Petroproducts Private Ltd., 322 ITR 158 and CIT v. MSK Constructions P. Ltd., 296 ITR 18 (Mad.) but the facts are different and hence distinguishable. The ld. CIT(A) accordingly upheld the action of the A.O. as in his opinion the assessee has not only furnished inaccurate particulars but also there is an attempt to conceal the income and hence explanation 1 to Section 271(1)(c) of the Act is squarely applicable to the facts of the case , whereby penalty levied by the AO u/s 271(1)(c) of the Act was confirmed by learned CIT(A) vide appellate orders dated 03-10-2013 passed by learned CIT(A). 6. Aggrieved by the appellate order dated 03-10-2013 passed by....
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....lment scheme. The additions were made to the income of the assessee u/s 43B of the Act by the Revenue as the assessee could not produce the evidence that it has complied with the installment scheme approved by the PF/ESIC authorities, as well also that despite installment scheme approved by PF/ESIC authorities for payment of employers contribution towards PF/ESIC dues, the assessee could not explain that how still Section 43B of the Act is complied with as the said Section stipulates payment to be made before the due date prescribed for filing of return of income u/s. 139(1) of the Act which clearly the assessee company did not complied with so far as employer contribution towards PF/ESIC aggregating to Rs. 27,84,655/- is concerned. The Revenue has levied penalty u/s 271(1)(c) of the Act on the ground that the assessee has not added the said amount of Rs. 27,84,655/- on account of non-payment of employer contribution towards PF/ESIC before the due date of filing of return u/s 139(1) of the Act to income of the assessee as per the clear provisions of section 43B of the Act. The assessee has come out with the explanation that the assessee was under the bonafide belief that the assess....