TMI Blog2021 (4) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- Since this was not a case where the assessee had either concealed particulars of its income and/or furnished inaccurate particulars of its income which are the prerequisite for imposition of penalty, the conclusion reached by the Tribunal that the penalty imposed by the assessing officer was correctly cancelled, by the CIT (A), cannot be found fault with. Where basic facts are disclosed or where a new claim is made because of a change in accounting policy, albeit in a fresh return, and given up because the law, as declared, did not permit such a claim, in such circumstances, initiation of penalty proceedings against the assessee, in our view, is not mandated in law. As the assessee attempted a change in the method of accounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act ). 2.2 The record shows that the assessee s case was picked up for scrutiny and a notice under Section 143(2) of the Act was issued. 2.3 On 05.01.2009, search and seizure operations under Section 132 of the Act were carried out qua the Taneja Puri Group. 2.4 This led to proceedings under Sections 132 and 153A of the Act against the assessee. Consequently, the assessee filed a fresh return in which a cumulative expenditure amounting to ₹ 13,42,70,655/- comprising interest paid on borrowings, brokerage and other expenses [hereafter referred to as the expenses ] was claimed, albeit, on an accrual basis. 2.5 It appears while pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... via the impugned order. In paragraph 40 of the impugned order, the Tribunal made the following pertinent observations: We have carefully considered the rival contentions and the orders of the lower authority of assessment as well as of penalty. The[sic: In the] present case the assessee has made a fresh claim under section 153A of the income tax act of the proportionate expenditure, which was originally claimed, partly in the original return and the balance was claimed in the return under Section 153A of the Income Tax Act. Admittedly, the balance expenditure which is claimed by the assessee in return filed under Section 153A of the Income Tax Act was already shown in the project expenditure for that year at the close of the year which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. On reading the various paragraphs of the order of the Ld. CIT A wherein he has given reasons for deletion of the penalty, we do not find any infirmity in his order in deleting the penalty. In view of this the order of the ld. CIT A is confirmed and appeal of the revenue is dismissed. [Emphasis is ours] 4. We have heard learned counsel for the parties and perused the record. What is evident to us [and there are findings of fact returned, in that behalf, by the authorities below], is as follows: (i) The assessee brought about a change in the accounting policy vis-avis the aforementioned expenses to align it with Accounting Standard-7 (in short 'AS-7'). (ii) Before the Tribunal, in the quantum appeal, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituted a fresh claim which was embedded in the fresh return filed pursuant to the proceedings carried out under Section 153A of the Act. 7. Therefore, to our minds, since this was not a case where the assessee had either concealed particulars of its income and/or furnished inaccurate particulars of its income which are the prerequisite for imposition of penalty, the conclusion reached by the Tribunal that the penalty imposed by the assessing officer was correctly cancelled, by the CIT (A), cannot be found fault with. Where basic facts are disclosed 1 or where a new claim is made because of a change in accounting policy, albeit in a fresh return, and given up because the law, as declared, did not permit such a claim, in such circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have perused the said judgement. In our view, the facts obtaining, in that case, are distinguishable from those existing in the instant case. That was a case where the assessee, i.e., Zoom Communication Pvt. Ltd. [Zoom] had filed a return wherein it had, inter alia, debited its profit and loss account to extent of ₹ 1,00,000/- qua income tax paid by it. This figure was shown in the schedule appended to the profit and loss account under the heading Administration and other Expenses . The explanation given by Zoom was that, due to oversight, the said amount was not added, as it ought to have while computing its taxable income. 8.5 It is in this backdrop that the Court reversed the view of the Tribunal whereby penalty had been dele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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