2023 (7) TMI 999

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.... dated 24.05.2019 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"]. 3. The Tribunal via the impugned order has set aside the penalty levied on the respondent/assessee under Section 271(1)(c) of the Income Tax Act, 1961 [in short, "the Act"] amounting to Rs. 14,31,07,613/-. The Assessing Officer (AO) had levied the said amount as penalty on account of disallowance under Section 43B of the Act. 4. Mr Aseem Chawla, learned senior standing counsel, who appears on behalf of the appellant/revenue, says that the order of the Tribunal is not sustainable, in view of the fact that the disallowance said to have been made "voluntarily" by the respondent/assessee under Section 43B of the Act, was triggered on account of notices i....

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....ection 43B of the Act was raised by the AO for the first time via a notice dated 21.11.2016 issued under Section 142(1) of the Act. 7. Having regard to these facts, which, as indicated above, are not in dispute, the Tribunal concluded that the disallowance was enhanced, voluntarily, and therefore, this was not a case in which penalty ought to have been imposed. 8. Mr Aseem Chawla, who appears on behalf of the appellant/revenue, has vigorously argued that the Tribunal's view is unsustainable in law. In support of his submission, Mr Chawla has, inter alia, relied upon the following judgments: (i) Gangotri Textiles Ltd. v. Deputy Commissioner of Income-tax, (2022) 137 taxmann.com 198 (SC). (ii) Gangotri Textiles Ltd. v.....

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....cific notice issued by the AO involving aspects concerning Section 43B of the Act. 11. We have heard the learned counsels for the parties at some length and have perused the record. The facts, as noticed hereinabove, are not in dispute. 12. Clearly the respondent/assessee had enhanced the disallowance under Section 43B of the Act from Rs. 6,08,64,813/- to Rs. 48,18,93,419/- suo motu. 12.1. This course-correction was carried out with the submission of a revised tax audit report on 26.08.2016, which led to a revised return being filed via online mode as well as physically. The online revised ROI was filed on 29.08.2016 which was followed by a physical filing on 01.09.2016. 13. The Tribunal noted that there is no dispute about the ....

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....for admission of this appeal." 15. Mr Chawla does not dispute that fact that the view taken by the Gujarat High Court was reversed only on 21.02.2019 by the Supreme Court via judgment rendered in Commissioner of Income-tax, Ahmedabad v. Gujarat Cypromet Ltd., (2019) 103 taxmann.com 346 (SC). 16. Thus, given the aforesaid, it cannot be said that the enhancement of disallowance under Section 43B of the Act carried out by the respondent/assessee was not voluntarily. 17. The decision of the Madras High Court on Gangotri Textiles Ltd. v. Deputy Commissioner of Income Tax, Corporate Circle 2, Coimbatore, (2020) 121 taxmann.com 171 (Madras), which was carried in appeal to the Supreme Court, on which Mr Chawla has placed reliance, accordin....