TMI Blog2012 (8) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... the employee-CA, penal provisions should not have been invoked. Lodging of a police complaint and subsequent arrest of the ex-employee of the company prove that assessee company had no role in filing inaccurate particulars rather it was a victim of a fraud. Penalties under the Act are imposed for some omissions and commissions. In our opinion, in the case under consideration it cannot held that there was any omission or commission on part of the assessee-company for which it should have been visited by penalty u/s. 271(1)(c) of the Act. - ITA No. 6078/Mum/2010 - - - Dated:- 10-8-2012 - D. Manmohan (Vice President) And Rajendra (Accountant Member) For the Petitioner : N. K. Mehta For the Respondent : D. V. Lakhani ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii). Sales tax u/s. 43B (MST) ₹ 95.02,158/- iii). Excise duty u/s. 43B ₹ 36,70,416/- iv). Sundry creditors ₹ 9,79,378/- v). Understated closing stock ₹ 5,36,195/- vi). Disallowance u/s. 40(a)(ia) ₹ 15,75,748/- vii). Depreciation on fixed assets ₹ 64,398/- viii). Income stripping ₹ 15,027/- ix). Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses were put in the books of accounts and money was withdrawn from the company, that company had lodged a police complaint against its employees, that when assseesee came to know about the fraud it on its own approached the department and informed it about the defalcation, that special audit of the accounts as per the provisions of section 142 (2)(A) was carried out to determine the fraud committed by the ex-employees, that entire amount of fraud was allowed by the department in the AY 2006-07,that information was submitted to the department before the assessment proceedings started for the year under consideration. He referred to page No.54 of the Paper Book in this regard. He further submitted that penalty levied in the AY 2004-05 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the case of Walter Saldhana (26 SOT26/ 9-Mumbai). 5. Un-disputed facts emerging from the material available can be summarised as under: i. Assessee was victim of a fraud ii. Defalcation was committed by the senior officer of the company with the help of his subordinates. iii. Crime was detected in 2005 and complaint against the employees was lodged by the assessee company with police authorities. iv. As soon as the assessee came to know about the defalcation, it informed the Departmental authorities. v. Accounts of the assessee company were audited as per the provisions of Sec. 142 (2A) of the Act. vi. AO had allowed defalcation amounting to ₹ 19.04 crores, while passing the assessment order for the A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions and commissions. In our opinion, in the case under consideration it cannot held that there was any omission or commission on part of the assessee-company for which it should have been visited by penalty u/s. 271(1)(c) of the Act. 5.2. After deliberating upon the facts and circumstances of the case, we are of the opinion that order passed by the FAA does not suffer from any legal infirmity. He has rightly relied upon the case of Reliance Petro Chemicals (supra).We are of the opinion that deletion of penalty by him is fully justified. Details filed by the assessee-company with regard to four items discussed in para No.3 was result of a crime committed upon the assessee-company. In these circumstances Grounds of Appeal filed by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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