TaxTMI 
TaxTMI 
2017 (12) TMI 1712
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....s aggrieved that the ld. Commissioner of Income Tax (Appeals) deleted penalty of Rs. 50,28,975/- levied u/s.271(1) (c) of the Income Tax Act, 1961 (in short ''the Act''). 2. Facts apropos are that assessee engaged in the business of manufacturing, exporting, trading and dealing in garments had filed its return of income for the impugned assessment year declaring loss income of Rs. 14,95,34,377/-. Assessment was thereafter completed u/s.143(2) of the Act after scrutiny making the following disallowance/additions:- (i) Disallowance u/s.14A 63,00,143 (ii) Disallowance u/s.40(a)(i) 2,98,830 (iii) Disallowance u/s.40(a)(ia) 12,26,598 (iv) Non-payment of interest to Bank 1,55,00,000 Ld. Assessing Officer ....
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....o it, there was no furnishing of inaccurate particulars. Further as per the assessee, it had substantial loss available for carry forward and no benefit would have accrued to it by making a claim, not allowable under the Act. Reliance was placed on the judgment of Hon'ble Apex Court in the case of Price Waterhouse Coopers vs. CIT, 348 ITR 306. 4. Ld. Commissioner of Income Tax (Appeals) after considering the submissions of the assessee held that Explanation 4(a) of Sec.271(1) (c) of the Act relied on by the ld. Assessing Officer for fastening penalty on the assessee was not at all applicable. As per the ld. Commissioner of Income Tax (Appeals), assessee had offered the sum of Rs. 1,55,00,000/- as remission of liability in its return for ....
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.... Reply of the assessee to the query was as under:- "The company's net worth was eroded as on 3Ft March 2010 under the provisions of Sick Industrial Companies Act (SICA). Accordingly the company filed for reference with the Board for Industrial and. Financial Reconstruction (BIFR) under Section 15(1) of SICA. The reference was considered by BIFR and upon submissions made and material on record, BIFR has declared the Company as Sick Industrial Company U/S 3(1) (0) of SICA vide its order dated 19th April 2011. BIFR issued directions to the lenders and to the Company to submit a Rehabilitation Scheme as per Section 18 of SICA. The Term loan obligations and interest Commitments have been met in full with respect to the Stat....
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....The said amount maybe considered for disallowance u/s 43B(e) of the Income Tax Act and the return treated as amended to that extent." It is clear from the above reply that assessee had offered the sum as income in the subsequent assessment year considering it as a cessation of liability. Interest to the extent of Rs. 1,55,00,000/- debited in Profit and Loss found specific mention in the Audit Report and Annual Accounts also. Thus, the omission to make a suo-motu disallowance u/s.43B(e) of the Act was in our opinion inadvertent and not with an intention of understating the income. That apart, assessee having mentioned the amount in its Audit Report and Annual Accounts, we cannot say that the particulars furnished by it were inaccurate. In....