TMI Blog2018 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued, in so far as the declaration of non allowability of these expenditures are concerned, such items were not covered under the query and to that extent, a revised computation filed by the assessee is voluntary. Undoubtedly, the assesseee is incurring persistent losses and there is considerable reduction in the manpower. Further, the tax audit report vide Clause 17(a) thereof says that the auditors’ reported the expenses of capital nature as ‘nil’. Mere issuance of notice u/s 143(2) does not ipso facto make the declaration of the assessee as non voluntary. We are convinced to believe that the mistake in this matter is the result of the assessee but does not amount to the concealment or furnishing of inaccurate particulars thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.70 2. Fixed Assets balance w/off debited to Profit Loss Account 3,93,060.62 3. Provision for Doubtful Debts 10,78,636.85 Total: 59,30,704.17 However, learned AO rejected the same stating that there is no provision under the Act to make any amendment in the return of income at the stage of assessment and proceeded to make an addition of ₹ 59,31,550/- in respect of the above expenses. Simultaneously, learned AO imitated proceedings u/s 271(1)(c) of the Act and concluded them by way of order dated 28.9.2015 with the levy of penalty of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manpower and since no qualified person was available with the assessee, the mistake had occurred. 3. Learned AR brought to our notice by way of balance sheet for the year ending 31.3.2012 to demonstrate that the employee expenses in respect of the reporting period of 2011-12 was only ₹ 3,96,213/- whereas it was ₹ 74,52,694/- in respect of the reporting period of 2010-11, which clearly establishes that there is a considerable reduction in the manpower. He also showed the loss for the period at ₹ 98,67,695/-. 4. In so far as the contention of the authorities below that there was no voluntary disclosure of the defect inasmuch as the re-computation was filed only after the notice u/s 143(2) and 142(1) of the Act were is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to explain the claim of loss in question in the Profit Loss account, the authorities below are duty bound to levy the penalty, as such, the same cannot be disturbed. 7. We have perused the material placed in the light of submissions on either side. In so far as the persistent loss pleaded by the assessee is concerned, absolutely, it is not controverted by the Revenue. It is submitted on behalf of the assessee that it is not a matter of loss for a particular year but now the company has reached the stage of closure and during the relevant assessment year as is evidenced by the financials of the assessee, the financial stringencies forced the assessee to reduce the work force and by that time itself, the company was running into loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is voluntary. Further, undoubtedly, the assesseee is incurring persistent losses and there is considerable reduction in the manpower. Further, the tax audit report vide Clause 17(a) thereof says that the auditors reported the expenses of capital nature as nil . Mere issuance of notice u/s 143(2) does not ipso facto make the declaration of the assessee as non voluntary. We are convinced to believe that the mistake in this matter is the result of the assessee but does not amount to the concealment or furnishing of inaccurate particulars thereof. With this view of the mater, we hold that the penalty u/s 271(1)(c) cannot be sustained. Learned AO is directed to delete the same. 10. In the result, appeal of the assessee is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
