2020 (2) TMI 1658

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....61 (hereinafter referred to as the "Act"). 3. Brief facts of the case are that the assessee had filed an appeal before the Ld. CIT(A) against the intimation dated 02.02.2019 u/s. 143(1) of the Act passed by the DCIT(CPC), Bangalore. On appeal, the Ld. CIT(A) in the impugned order observed that the assessee company had filed return of income on 27.10.2017 declaring total income of Rs.11,93,30,100/-. Subsequently, the return was processed by CPC and intimation u/s. 143(1) was made on 12.07.2018 regarding certain inconsistencies in disallowances u/s. 37 of the Act. According to Ld. CIT(A), the assessee company had filed its response to the CPC on 11.08.2018. However, the AO (CPC) did not consider the same (reply of assessee) and passed the ....

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....ts stand and determined the total income at Rs.12,00,40,780/- by increasing the business income by Rs.7,10,679/-. The detailed breakup figure of Rs.18,81,350/- (as shown in the Tax Audit Report) and Rs.11,70,671/- which was disallowed/added back by the assessee in the return of income is as under: "Break-up of Rs.18,81,350/- [As disallowed in 143(1)] Club Expenditure Rs.18,80,285/- Penalty on Provident Fund Rs. 498/- Penalty on Entry Tax Rs. 567/- Total Rs.18,81,350/- Break-up of Rs.11,70,671/- (Suo moto disallowed in computation) Expenditure incurred on CSR Activities Rs.11,57,883/- Interest on late payment of TDS Rs. 11,723/- Penalty on PF Rs. 498/- Penalty on Entry Tax Rs. 567/- To....

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.... by the CPC proposing the adjustment. After considering the explanation of the assessee if the CPC was not satisfied with the reply of the assessee, then it had to issue notice u/s. 143(2) of the Act as decided by the Hon'ble jurisdictional High Court. In this regard it is gainful to refer to the decision of the Hon'ble Calcutta High Court in the case of Peerless General Finance & Investment Co. Ltd. Vs. CIT 228 CTR 72 wherein it has been held that - "It is also necessary for the AO to examine second proviso before making any disallowance. A disallowance cannot be made under s. 438 simply because payment was not made within the previous year. From the facts it appears that the information contained in the tax audit report did not e....