AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1940
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....pect of the following expenditure :- (Amount in Rs.) 1. Advance written off 92,89,916/- 2. Deposits written off 18,30,300/- 3. Provision for doubtful debits 2,54,91,606/- 4. Provision for doubtful advances 88,59,577/- 5. Capital work in progress written off 8,56,53,266/- 6. Loss on sale of fixed assets 21,484/- Total 13,11,45,849/- 3. The Assessee submitted that it has not claimed the said expenditure as deduction in the computation of income, however, the Assessing Officer reduced the said expenses from declared by the Assessee holding that loss appearing in the acknowledgement of the e-return filed is similar to that appearing in the intimation passed u/s 143(1). Therefore, since the above expenses were not allowable while computing the income of the Assessee, the Assessing Officer was of the view that the Assessee failed to add back these expenses in the computation of income, thereby penalty proceedings were initiated u/s 271(1)(c) for concealing/furnishing inaccurate particulars of income. Subsequently, the Assessing Officer passed order u/s 271(1)(c) on 31.03.2015 levying penalty u/s 271(1)(c) of the ....
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.... thereby reducing the income it amounts to filing of inaccurate particulars of income. He further observed that the Assessee is supposed to verify the figures reported in the e-return. He rejected the contention of the Assessee that such expenses which have been added back at the time of assessment proceedings were pointed out for disallowance in tax audit report because the Assessee had not given effect while filing the e-return. It was also the observation of the Assessing Officer that excess expenditure claimed was noticed only when the return of income was subjected to detailed scrutiny. Therefore, he concluded that there is willful concealment and furnishing of inaccurate particulars of income by the Assessee by not adding back the expenses which are inadmissible. On appeal, the Ld. CIT (Appeals) sustained the penalty observing that the Assessee by not substantiating its claim of expenses failed to offer explanation. He also observed that there need not be willful concealment for levying of penalty u/s 271(1)(c) of the Act. 6. The Ld. Counsel for the Assessee submits that the Assessee had filed a belated return of income showing a loss which is not eligible to be carried fo....
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....seful to the Assessee since the loss cannot be carried forward and was not set off due to delay in filing the return. The Ld. Counsel further submits that the Assessee has taken the professional help and relied on their work. The tax consultant made human error in filling electronic return for uploading Income Tax related particulars. The Ld. Counsel submits that the disallowance of expenses were reported in the Tax Audit report, which is the complete disclosure of the issues covered. The Ld. Counsel submits that in view of the following decisions no penalty is attracted in its case. 1) Price Waterhouse Coopers Pvt. Ltd. Vs. CIT (2012) 77 DTR (SC) 2) CIT vs. Somany Evergree Knits Ltd. (2013) 352 ITR 0592 (Born) 3) CIT vs. Balaji Distilleries Ltd. (2013) 255 CTR 0265: (2013) 81 DTR 0190 The Ld. Counsel for the Assessee prayed that penalty of Rs. 4,48,57,660/- levied on additions/disallowances of Rs. 13,11,45,849/- by the AO may please be deleted. 8. The Ld. DR vehemently supported the orders of the authorities below. 9. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. The Assessee filed ....
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....income was a loss return and since return was filed belatedly the same did not have effect in the carry forward of losses. It was therefore asserted that the said mistake was revenue neutral and did not have any current or future tax effect. 11. On a careful consideration of the facts it appears that there is no intention on the part of the Assessee to conceal the income or furnish inaccurate particulars of income. The return of loss filed belatedly is not useful to the Assessee since the loss cannot be carried forward and it cannot be set off against the income in subsequent years as the return was filed belatedly. Therefore the Assessee has to forgo whatever loss is shown in the return of income. It appears that the CFO was entrusted with the filing of return and he made a mistake in not properly uploading the return by filling up the return with the disallowances which were already reported by the auditors in the tax audit report. The CFO had undoubtedly made an error in filing electronically by uploading incorrect particulars. Therefore for the fault of the professional, the Assessee cannot be penalized. There is no intention of furnishing of any inaccurate particulars or co....
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.... that the assessee did not notice the error, it was not even noticed even by the Assessing Officer who framed the assessment order. In that sense, even the Assessing Officer seems to have made a mistake in overlooking the contents of the Tax Audit Report. 19. 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 furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income. 20. We are of the opinion, given the peculiar facts of this case, that the imposition of pena....