TMI Blog2019 (5) TMI 1983X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals)-XXIV, New Delhi, in relation to the penalty proceedings u/s.271(1)(c) for the Assessment Year 2014-15. The assessee is mainly aggrieved by levy of penalty u/s. 271(1)(c) for a sum of Rs. 14,31,07,613/- on account of disallowance made u/s.43B. 2. The facts in brief qua the levy of penalty are that, assessee is a manufacturer of stainless steel, SS Flats, SSHR coil, SSCR coil SS pipes etc from the Plant located in Uttarakhand. It had been stated from the records that assessee have been incurring huge losses year after year and there were carry forward losses and depreciation coming from the Assessment Year 2012-13 which aggregated to Rs.155.35 crores. The assessee had availed various credit facilities from financial institutions and banks for setting up of the business and for operations. Unfortunately, there was a severe flood in factory area in August, 2011 due to cloud burst and since then assessee had suffered huge losses as operation could not be carried out and consequently the assessee was not in a position to pay the installment of the loan and interest on the loan borrowed by it. Thereafter Assessee Company had applied for restructur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Based on this audit report, the assessee has filed revised return and furnished the revised return manually before the Assessing Officer, because online return was not permitted. The said revised return was filed on 01.09.2016. Ld. Assessing Officer in the assessment order based on such revision of audit report and the revised return held that the return filed by the assessee was not proper and has not correctly shown the particulars of income, because in the original return assessee has not offered the income of Rs. 42,10,28,576/- for taxation and the revised return is not valid. The audit report has been revised only after notice u/s. 143(2). Based on this, he has made the disallowance u/s. 43B(e) of Rs. 42,10,28,576 and accordingly, the assessed loss was reduced to Rs. 11,86,66498/-. 5. Now on such disallowances, penalty has been levied by the Assessing Officer on the ground that, firstly, return has not been revised in time allowed u/s. 139(5) and; secondly, the assessee has made a wrong claim of expenses of Rs. 42,10,28,576/- in the original return of income. Hence, assessee had furnished inaccurate particulars of income. 6. After considering assessee s explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 02.08.2016 which was a general query in a printed form wherein clause (b) and (c) has been ticked which read as under: (b) ** produce of cause to be produced before ma at my office .. on the accounts and/or documents specified below/overleaf. (c) ** furnish in writing and verified in the prescribed manner the following information (i) copy of ITR for Assessment Year 2014-15, (ii) copy of Audit Report alongwith all the annexures, (iii) proof regarding payment of taxes, (iv) TDS Certificate, if any and (v) power of attorney in favour of authorized representative. The information called for should be furnished to my office at Room No.361, 3rd Floor, ARA Centre, E-2, Jhandewalan Extn., New Delhi by 09.08.2016 at 11.30 AM. This is also an intimation for the change of incumbent. 9. Thus, from a bare perusal of the aforesaid notices, it can be seen that at no point of time, the Assessing Officer has raised any query with regard to claim of disallowance u/s.43B. He further drew our attention to the guidance note for revising the tax audit report and pointed out that auditors have given the explanation on disallowance of interest. He pointed out that there was a bona f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iny much earlier. As per the law, assessee needs to substantiate its claim in the return of income and if any such claim has been revised after the scrutiny proceedings have been initiated, then it cannot be termed as voluntary. Even at the time of restructuring of loan the management was involved, and therefore, it cannot be held that assessee was not aware and has simply relied upon the auditor s note and opinion given in the original audit report. Thus, this fact was in the knowledge of the assessee and assessee cannot take the shelter that it has acted upon the end of the auditors. In the written submission, she has strongly relied upon the decision of Hon'ble Supreme Court in the case of CIT vs. Mak Data Pvt. Ltd., 358 ITR 593 wherein the Hon'ble Supreme Court has held as under: The Assessing Officer, shall not be carried away by the plea of the assessee like 'voluntary disclosure', 'buy peace', 'avoid litigation', 'amicable settlement', etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the assessment proceedings and the Assessing Officer is not required to record his satisfaction in a particular manner or reduce it into writing. [Para 10] In view of above, impugned penalty order passed by the High Court deserved to be confirmed. 11. She has further relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Zoom Communication Pvt. Ltd. reported in (2010) 327 ITR 510 (Del) and also the decision in the case of Jivanlal and Sons vs. ACIT reported in (2019) 103 taxmann.com 208 (SC) given by the Hon'ble Supreme Court dismissing the SLP of the assessee wherein the Hon'ble High Court has confirmed the penalty on the assessee s explanation that it has claimed deduction in respect of tax paid on the basis of wrong advice given by the Chartered Accountant. Lastly, she relied upon the decision of Hon'ble Allahabad High Court in the case of Hamirpur District Co-operative Bank Ltd. vs. CIT wherein the Hon'ble High Court has held that where Assessing Officer having noticed that assessee, a co-operative bank, had debited amount of advance tax paid under head other expenditure and it had also debited a certain amount in profit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.43B, Assessing Officer has not confronted this issue at all to the assessee. Only vide notice dated 21.11.2016, which was after the revised tax audit report Assessing Officer has raised this query in notice u/s. 142(1). The relevant points in this regard were as under: 25. Please provide detail of statutory payments covered by 43B and state if such payments have been made before the due date for filing of return, pleas furnish proof of the same, if not already filed with the return. 28. Furnish the auditor s report with comments/qualification of the auditors for the audit dated 26.08.2016. 29. Explain the circumstances and the facts of revising the audit report on 26.08.2016 alongwith supporting evidences to justify the reasonability for doing so. 30. The facts of revision in the audit report itself prove that the audit of the company made by the auditors on 29.11.2014 was not proper and not valid. Hence, the same cannot be treated as valid audit as per the provisions of law. Thus, there is failure on the part of your company to get the accounts of the company within the specified date in a proper manner u/s.44AB of the Income Tax Act, 1961. Therefore, you are requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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