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2014 (10) TMI 152 - ITAT JAIPURPenalty u/s 271(1)(c) – Held that:- No penalty can be imposed on the assesse qua an addition which is occasioned by the operation of a retrospective legislation - Assessee cannot be penalized for a purported wrong which did not exist on statute book at the time the assessee made a claim at the time of filing its return or completion of assessment - there is no justification in the order of the CIT(A) holding that in his view without even retrospective amendment, the assessee could not have made this claim - there existed a judicial debate on such claim, besides all the relevant details were disclosed along with the return by way of audited account statements and certificates - The assessee is following a consistent method of accounting on mercantile basis - There is no adverse qualification by the auditors either on accounting policies or consistency in method of accounting – relying upon Apollo Tyres vs. CIT [2002 (5) TMI 5 - SUPREME Court] - while computing the book profits, revenue authorities cannot interfere in audited accounts. Penalty u/s 271(1)( c) is leviable with respect to the amount of ₹ 4215.03 lacs - The amount accounted for as deferred taxation is based on the same audit report which was provided based on consistent method of accounting policy and it has been accepted so by the C.A. and statutory auditors - The CIT(A) arbitrary held that part of it was liable for penalty - the proposition that once the assessee's accounts are audited and book profits are computed according to the audit report then the Revenue authority cannot interfere with the audited figures. Diminution in value of equity shares and 'provisions for deferred taxation" were made originally and contested by the assessee in appeal - the assessee cannot be penalized for claims which were not disallowable by any express provision on the statute book at the relevant time - once the book profits are computed on the basis of the audited accounts then the AO cannot interfere in the book profits calculations - penalty is impossible on the basis of information furnished the return - If the assesse has furnished all the relevant details and information along with the return, then disallowance of any claim by assessing officer is not exigible to penalty - Besides a judicial debate existed on the issue about AO's power to interfere with audit statement in calculating book profits under sec. 115J. IMACID deposit – Held that:- The assessee had given proper explanation in this behalf, which has been overlooked by CIT(A) - The mistake is bonafide, the entries were made as per regular accounting policy in this behalf. Besides all the relevant particulars for this accounting of IMACD having been filed along with return of income, the penalty retained by the CIT(A) – Decided in favour of assessee.
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