TaxTMI 
TaxTMI 
2019 (6) TMI 1286
X X X X Extracts X X X X
X X X X Extracts X X X X
....levant to assessment year (AY) 2006-07. The assessee has raised the following grounds of appeal: 1.1 The order passed u/s.250 on 07.05.2015 for A.Y. 2006-07 by CIT(A)-1, Baroda upholding the penalty of Rs. 45,71,700/- levied u/s.271(1)(c) by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld.CIT(A) has grievously erred in law and on facts in confirming the penalty of Rs. 45,71,700/- levied u/s.271(1)(c) by AO . The Ld.CIT(A) has grievously erred in law and on facts in confirming the penalty levied u/s.271(1)9c) on the ground that the appellant had not come forward suo moto to file revised return. 1.3 That in the facts and circumstances of the case was well as in law, the Ld.CIT(A) ought not to ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment was reopened under section 147 of the Act on the ground that the assessee failed to make the payment such interest within the specified due date. Accordingly, the interest expenses claimed by the assessee was disallowed and added to the total income of the assessee. Subsequently, the notice u/s 274 r.w.s 271(1)(c) of the Act was issued upon the assessee for levying the penalty u/s 271(1)(c) of the Act on account of furnishing inaccurate particulars of income. 2.1 The assessee in response to the notice issued u/s 274 of the Act made reply dated 14th July 2014. The details of the reply stand as under; a. The auditor of the company missed giving the effect of the amendment brought in the Finance Act 2003 whereby the payment of interes....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... interest expenses on the working capital loan was brought under the statute by the Finance Act, 2003 with effect from 1-4-2004. Being the recent amendment, the assessee omitted to make the disallowance of such interest inadvertently in the statement of income. Even the auditor failed to point out the disallowance u/s 43B of the Act as it was the recent amendment. The return of income was filed at a loss amounting to Rs. 3,16,10,630/- only. As such there was not any tax liability on the assessee even after making the disallowance of the impugned interest expenses. 2.4 The assessee has already made the disallowance of the interest expenses payable to the financial institution amounting to Rs. 1,93,10,506.00 only. Thus there was no reason ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of income. The assessee has claimed the deduction for the amount of interest expenses payable on the working capital loan to the bank in its profit and loss account. There is no dispute to the fact that such interest is subject to a deduction on actual payment in pursuance to the provisions of section 43B of the Act. The assessee in the instant case has not made the payment of such interest within the time as specified under section 43B of the Act and therefore the assessee was not entitled to the deduction from its income for such expense. The assessee during the assessment proceedings admitted the fact that it not eligible for deduction on account of such interest expense by virtue of the provision of section 43B of the Act. On perus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r is placed on pages 73 to 74 of the paper book. In view of the above, we are of the opinion that the assessee has made sufficient disclosures in the financial statements and furthermore it should not be penalized on account of the mistake committed by the chartered accountants as discussed above. Therefore we are reluctant to confirm the penalty levied by the authorities below. In holding so, we find support and guidance from the judgment of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs CIT reported in 25 taxmann.com 400 wherein, it was held as under: "The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furni....