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TMI Blog2015 (10) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... of income under sub sec. 1 of sec. 139 of the Act, are allowable under s.36(1)(va) read with sec. 2(24)(x) and sec. 43B of the Act. This is not a fit case for levy of penalty u/s 271(1)(c) as there has been no concealment on behalf of the assessee. The error that was brought to the notice in respect of depreciation was a bonafide error, which was corrected by the assessee by filing revised return during the assessment proceedings. The remaining additions made by the AO do not call for levy of penalty under this provision because these are mere disallowances made by the AO but not conclusive evidence of concealment. We, therefore, by keeping in view the ratio laid down in the judgment of Reliance Petro Products (2010 (3) TMI 80 - SUPREME COURT ) and Price Water House Coopers Pvt. Ltd. vs. CIT reported in (2012 (9) TMI 775 - SUPREME COURT) passed by the Hon’ble Supreme Court and jurisdictional High court in the case of of DCIT vs. Nepa Limited reported in (2015 (10) TMI 63 - ITAT INDORE) delete the penalty u/s 271(1)(c) of the Act levied by the AO and confirmed by the ld. CIT(A). - Decided in favour of assessee. - I.T.A .No. 1457/Del/2010 - - - Dated:- 7-9-2015 - SHRI N.K. SA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that in all of the above issues the assessee furnished inaccurate particulars of income to reduce the taxable income and did not substantiate its claim of expenses. Therefore, by virtue of Explanation 1 of Section 271(1)(c) penalty is levied. In this year, normal tax rate is 30% and surcharge is 10% and educational cess is 2% therefore, tax sought to be evaded is computed at ₹ 11,48,900/- on the disallowance/additions of ₹ 34,13,249/-. And therefore, penalty of ₹ 11,49,000/- (which is not less than 11,48,900/-, which is amount of tax sought to be evaded and not exceeding three time to this) is levied after approval of the Addl. CIT, Range-16, New Delhi. 5. Aggrieved by the penalty order the assessee went into appeal before ld. CIT(A). The ld. CIT(A) confirmed the order of ld. AO. 6. The ld. AR submitted in respect of each addition made by the Assessing Officer under section 143(3) proceedings. It is submitted that the assessment order was passed on 30.12.2008 by making following additions: 1. Excess depreciation on Plant Machinery ₹ 24,56,003 2. Non-capitalization of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the ld. AR that the same has been deposited beyond the due date which is 15th day of subsequent month. However the Ld. AR submitted that the same was deposited before the filing of the return. 8. The ld. AR also made his submissions that in the assessment order passed u/s.143(3) by the ld. AO, the satisfaction has been recorded for concealment of income u/s 271(1)(c) of the Act. Accordingly, the penalty proceedings were initiated by the AO as the assessee did not prefer any appeal against the quantum assessment. The ld. AR further pointed out that the penalty has been levied by the ld. AO for furnishing of inaccurate particulars of income and the ld. AO by virtue of Explanation 1 to Section 271(1)(c) has levied penalty. It is argued by ld. A.R that the AO has recorded the satisfaction for concealment of income and the penalty has been levied for furnishing of inaccurate particulars of income by considering Explanation 1 to Section 271(1)(c). Ld. AR further submitted that Explanation 1 to Section 271(1)(c) cannot be applied if the charge is for filing inaccurate particulars. The deeming fiction is that the Explanation 1 could be invoked only if there is a concealment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o laid down by the Hon ble Delhi High Court in the case of CIT v. P.M. Electronics Ltd., 220 CTR 635 (Delhi) while relying upon the decision of Hon ble Apex Court in the case of CIT Vs. Vinay Cement Ltd.,213 CTR (SC) 268 , concurred with the view taken by the Hon ble Madras High Court in Nexus Computer (P) Ltd.,219 CTR(Mad) 54 that employer/employees contribution towards provident fund payments made after the due date prescribed under the Employees Provident Fund Act and Rules made there under but before the due date for furnishing the return of income under sub sec. 1 of sec. 139 of the Act, are allowable under s.36(1)(va) read with sec. 2(24(x) and sec. 43B of the Act. Moreover, Hon ble Apex Court in the case of CIT vs Alom Extrusions Ltd., 319 ITR 306 (SC) held that the omission of the first proviso to section 43B of the Act by the Finance Act, 2003, operated, retrospectively, with effect from, April 1, 1988 and not prospectively from April 1, 2004. 14. The decision relied on by the DR of the jurisdictional High Court in the case of Arcotech (supra) are distinguishable on the facts because in the said case, the assessee had not substantiated the claims and thus had not disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars of income. The penalty can be imposed only for a specific charge. Furnishing inaccurate particulars of income means, when the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas, concealment of particulars of income means, when the assessee has concealed the income and has not shown the income in its return or in its books of accounts. Explanation 1 is a deeming provision and is applicable when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 cannot be applied in a case where the assessee furnishes inaccurate particulars of income. 18. In the present case, we observe that the ld. AO has initiated penalty proceeding u/s 271(1)(c) on the basis that the assessee has concealed the particulars of income and the penalty ultimately levied on the assessee has been for furnishing inaccurate particulars by observing that the case of the assessee is covered by the Explanation 1 to Section 271(1)(c). 19. On the above findings and reasoning, we hold that this is not a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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