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TMI Blog2021 (9) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... es referred to in clause (c) (in addition to tax if any payable) by him, a sum which shall not be less than, but which shall not exceed (three times), the amount of tax sought to be evaded by the reason of the concealment of particulars of his income (or fringe benefits) or the furnishing of inaccurate particulars of such income. 1.3 Hence for Imposing penalty u/s 271 (1) (c) (iii) there must be a positive income resulting in tax. The Penalty Imposed was in addition to any tax payable. If there was no tax, no penalty could be levied. 1.4 The appellant filed return declaring loss of Rs. 1,86,62,094/- and after assessment by the A.O the loss was reduced to Rs. 2,08,899/-. Even after assessment the appellant was not liable to pay any tax and therefore penalty could not be imposed as neither there were no positive income income nor the appellant was liable to pay any taxes. 1.5 The same was held by the Madras High Court in the case of The Commissioner of Income Tax vs. M/s.Kamy Software Solutions(P) stating that there must be a positive income resulting in tax before any penalty could be levied continued to exist. The penalty imposed was in 'addition to any tax'. If there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand opposing petition filed by the assessee for condonation of delay in filing appeal, submitted that the reasons given by the assessee that its Managing Director's ill health is not supported by necessary medical records, certificate issued by doctor. Therefore, on the basis of affidavit being a selfserving document, huge delay in filing appeal cannot be condoned. Hence, requested to dismiss the appeal filed by the assessee for not filing appeal in time. 3.2 We have heard both the parities and considered petition filed by the assessee for condonation of delay of 109 days in filing appeal before the Tribunal and we find that reasons given by the assessee of ill health of Managing Director of the company appears to be reasonable and bonafide and further, comes under reasonable cause as provided under the Act for condonation of delay in filing the appeal. Therefore, we condone the delay in filing appeal and admit the appeal filed by the assessee to decide the issue on merits. 4. The brief facts of the case are that the assessment for the impugned assessment year was completed u/s.143(3) of the Act on 29.11.2016 and determined total loss of Rs. 2,08,899/- as against retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that when the assessee has offered explanation with regard to entries passed in books of accounts regarding purchase of stock-in-trade and corresponding sundry creditor in the name of the party, then it is very clear that the assessee has furnished all particulars of its income necessary for completion of assessment. Therefore, under these circumstances penalty leviable u/s.271(1)(c) of the Act does not attract. The CIT(A) after considering relevant submissions of the assessee and also taken note of various facts brought out by the AO, opined that the assessee had deliberately furnished inaccurate particulars in respect of purchase of stockin- trade and sundry creditors, which is evident from the fact that although the assessee claims to have purchased stock in the earlier financial year but, corresponding entries in the books of accounts was not passed. Further, the assessee has no valid explanation even in appeal stage. Therefore, he opined that it is a clear case of furnishing inaccurate particulars of income and hence, affirmed the findings of the AO in levying penalty u/s.271(1)(c) of the Act. Aggrieved by the ld.CIT(A) order, the assessee is in appeal before us. 6. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na Polystrap Pvt. Ltd., for an amount of Rs. 1,84,54,195/-. From the above, what we understood is, the assessee has shown purchases from a group company and the same has been accounted in the books of accounts of the assessee under the head 'purchases' with a corresponding credit in the name of the party under the head 'sundry creditors'. Further, the assessee had also increased closing stock value equivalent to amount of purchase from M/s. Shree Krishna Polystrap Pvt. Ltd. Thus, from the above it is very clear that there is no effect on the profit or loss for the impugned assessment year, because the value of stock-intrade has been increased in the balance sheet to the extent of Rs. 1,84,54,195/- with a corresponding sundry creditor in the name of M/s. Shree Krishna Polystrap Pvt. Ltd., for Rs. 1,84,54,195/-. Thus, in our considered view all particulars have been furnished when the AO has called upon to explain the credit in the name of M/s. Shree Krishna Polystrap Pvt. Ltd. The assessee has also explained the reasons for showing purchases from sister concern, as per which the assessee being a sick company is in the process of arranging financial assistance from banks and for this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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