TMI Blog2017 (3) TMI 1940X X X X Extracts X X X X X X X X Extracts X X X X ..... g incorrect particulars. Therefore for the fault of the professional, the Assessee cannot be penalized. There is no intention of furnishing of any inaccurate particulars or concealment of income as the facts undoubtedly suggest in this case. Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. [ 2012 (9) TMI 775 - SUPREME COURT] considered a situation where the Assessee by mistake claimed deduction in respect of provision towards payment of gratuity in its return of income even though tax audit report indicated that such provision was not allowable. Hon ble Madras High Court in the case of CIT Vs. Balaji Distelleries Ltd [ 2012 (10) TMI 514 - MADRAS HIGH COURT] following the decision of the Hon ble Supreme Court in the case of Price Waterhouse Coopers pvt. Ltd,[ 2012 (9) TMI 775 - SUPREME COURT] held that the absence of due care does not mean that the Assessee was guilty of furnishing inaccurate particulars to conceal his income. We hold that there is no concealment of income or furnishing of inaccurate particulars of income by the Assessee, but it is only a mistake in not adding back the expenses disallowable in the computation of income while upload ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the computation of income, thereby penalty proceedings were initiated u/s 271(1)(c) for concealing/furnishing inaccurate particulars of income. Subsequently, the Assessing Officer passed order u/s 271(1)(c) on 31.03.2015 levying penalty u/s 271(1)(c) of the Act holding that Assessee has furnished inaccurate particulars of income and has committed a clear default within the meaning of section 271(1)(c) read with Explanation-1 to section 271(1)(c) of the Act and thereby suppressed the real income of Rs.13,19,73,099/-. 4. The Assessee submitted that the said expenses were shown as disallowances in the tax audit report by the auditors and during electronic filing of the return the said disallowances were not entered properly in the column of disallowances and accordingly it showed a loss. It was submitted that the Assessee did not notice the mistake for the reason that the professional who was engaged for upholding the return made this mistake. It was further submitted that it was under the impression that since the inadmissible expenditure is reported in tax audit report it will be considered as disallowance. Assessee submitted that these expenses were never claimed by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also observed that there need not be willful concealment for levying of penalty u/s 271(1)(c) of the Act. 6. The Ld. Counsel for the Assessee submits that the Assessee had filed a belated return of income showing a loss which is not eligible to be carried forward, and was not claimed in any subsequent years. The return of income was filed electronically by the professional appointed by the company, wherein the disallowances reported in tax audit report were not added back to the income. Thus, the disallowances of Provisions, capital items etc. of Rs.13,11,45,849/- also listed in the tax audit report were added back during the assessment. He submits the following list of additions is as mentioned below:- Particulars Amt Disclosure CWIP Written off 85653266 Clause 17(f) of Tax Audit report Provision for doubtful debts 25491606 Clause 17(f) of Tax Audit report Advances written off 9289916 Addition agreed suo moto Provision for doubtful advances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its case. 1) Price Waterhouse Coopers Pvt. Ltd. Vs. CIT (2012) 77 DTR (SC) 2) CIT vs. Somany Evergree Knits Ltd. (2013) 352 ITR 0592 (Born) 3) CIT vs. Balaji Distilleries Ltd. (2013) 255 CTR 0265: (2013) 81 DTR 0190 The Ld. Counsel for the Assessee prayed that penalty of Rs. 4,48,57,660/- levied on additions/disallowances of Rs. 13,11,45,849/- by the AO may please be deleted. 8. The Ld. DR vehemently supported the orders of the authorities below. 9. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. The Assessee filed return of income electronically on 14.02.2012 declaring loss of Rs.16,10,43,542/-. Admittedly this return was filed belatedly and beyond due date for filing return of income u/s 139(1) of the Act and in which case the business loss reported in the return is not eligible for carry forward and set off against income in subsequent assessment years. The Assessee submits that the return and computation was prepared by the then CFO and he did not properly upload the return by showing the expenses disallowable as reported in the tax audit report. The Assessee contended that in the tax audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs as the return was filed belatedly. Therefore the Assessee has to forgo whatever loss is shown in the return of income. It appears that the CFO was entrusted with the filing of return and he made a mistake in not properly uploading the return by filling up the return with the disallowances which were already reported by the auditors in the tax audit report. The CFO had undoubtedly made an error in filing electronically by uploading incorrect particulars. Therefore for the fault of the professional, the Assessee cannot be penalized. There is no intention of furnishing of any inaccurate particulars or concealment of income as the facts undoubtedly suggest in this case. 12. The Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT [348 ITR 306] considered a situation where the Assessee by mistake claimed deduction in respect of provision towards payment of gratuity in its return of income even though tax audit report indicated that such provision was not allowable. The Hon ble Supreme Court held as under : 14. During the course of hearing this appeal against the judgment and order of the Calcutta High Court, we had required the assessee to explain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income. 20. We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars. 21. Under these circumstances, the appeal is allowed and the order passed by the Calcutta High Court is set aside. 13. In the case of CIT Vs. Somany Evergree Knits Ltd. [352 ITR 592], the Bombay High Court held as under : 7. We have heard the rival submissions. The Id. Counsel for the assessee reiterated the stand of the assessee as put forth before the revenue authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. When all facts are available on record it cannot be said that the assessee attempted to furnish inaccurate particulars. It is a case making an incorrect claim. The bonafide of the assessee are further established by the fact that no appeal was filed by the assessee against the order of the AO.' 14. The Hon ble Madras High Court in the case of CIT Vs. Balaji Distelleries Ltd [81 DTR 190] following the decision of the Hon ble Supreme Court in the case of Price Waterhouse Coopers pvt. Ltd, (supra) held that the absence of due care does not mean that the Assessee was guilty of furnishing inaccurate particulars to conceal his income. 15. In view of the above discussion and respectfully following the above decisions, we hold that there is no concealment of income or furnishing of inaccurate particulars of income by the Assessee, but it is only a mistake in not adding back the expenses disallowable in the computation of income while uploading the return of income in the given facts and circumstances of the Assessee s case. Thus, we direct the Assessing Officer to delete the penalty levied u/s 271(1)(c) of the Act. 16. In the result, appeal of the Assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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