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TMI Blog2019 (4) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... 07, balance sheet as on 31.03.2007 and relevant schedules. No information given in the return was found to be incorrect or inaccurate, therefore, it could not be said that the provision made by assessee disallowed during the course of assessment proceedings was a result of any suppression of facts or deliberate concealment of income. No justification for imposing penalty when assessee had disclosed all the facts in the audited statement of accounts for the year under reference. There was no concealment of income at all. We are of the further view that it was just a clear cut case of difference of opinion between the assessee and the assessing officer. - Decided against revenue. - ITA No. 4198/Mum/2016 - - - Dated:- 29-3-2019 - Shri Pawan Singh, Judicial Member And Shri N.K. Pradhan, Accountant Member For the Appellant : Shri Pankaj R. Toprani with Shri Krupa P. Toprani (DR) For the Respondent : Shri Satish Chandra Rajore (Sr. AR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by revenue under section 253 of the Income-Tax Act (for short the Act ) is directed against the order of ld. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have escaped from the assessment. 5. On the other hand the ld. AR for the assessee supported the order of the ld. CIT (A). The ld AR for the assessee further submits that the penal provisions under section 271(1)(c) would apply when there is concealment of particulars of income or a failure to disclose fully and truly particulars of income and it is only when the appellant fails by not disclosing particulars of income. However, all the necessary facts and figures were disclosed by the assessee in its return of income, which accompanied the profit and loss account for the year, ended 31.03.2007, balance sheet as on 31.03.2007 and relevant schedules. No information given in the income tax return was found to be incorrect or inaccurate, therefore, it could not be said that the provision made by assessee disallowed during the course of assessment proceedings was a result of any suppression of facts or deliberate concealment of income. The assessee had discharged its onus cast on it as per explanation (1) of section 271(1)(c) of the Income Tax Act. It was submitted that there was no justification for imposing penalty when assessee had disclosed all the facts in the audited stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to argue that the notice issued by assessing officer is invalid. Even otherwise the assessee duly participated in the penalty proceedings and never raised such objection that the assessee is unaware of the charges or limb of section 271(1)(c). 9. We have considered the rival submission of the parties and have gone through the orders of authorities below. The Assessing Officer while passing the assessment order made the addition account of provision for retention and power cost amounting to ₹ 2,80,72,176/- and provision for liquidated damage amounting to ₹ 30,00,000/-. The appeal filed by the assessee challenging the addition before ld CIT(A) was dismissed vide order dated 18.03.2011. No further appeal was filed before Tribunal. The assessing officer issued notice under section 274 read with section 271(1)(c) dated 07.12.2012. The assessing officer recorded that none appeared on behalf of the assessee nor any submissions was made. The Assessing Officer levied the penalty on both the disallowance @ 100% of the tax sought to be evaded vide his order dated 28.03.2013. There is no dispute that all the necessary facts and figures were disclosed by the assessee in its ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted damage on the contract entered with BHEL. Therefore, the provision made towards liquidated damage of ₹ 30,00,000/- towards appellant company was also disallowed. Similarly, in respect of provision of ₹ 1.50 crores the Ld. A.O. concluded that if the appellant was liable to pay any liquidated damage it could be collected from the sub contract Utility Energy tech Engineering Ltd. Therefore in view of the A.O., the appellant company was not required to bear the liquidated damages and accordingly the provision of ₹ 1,50,00,000/ - claimed by the appellant company was not allowed by the A.O. Similarly, provision for retention was also disallowed and penalty u/s.271(1)(c) of the Act were separately initiated. 6.2 In para 5 of the penalty order dated 28.03.2013 the ld. A.O. mentioned that nobody had attended and no written submission was made b the appellant company. Therefore he imposed penalty u/s.271(1)(c) of the Act on the basis of material available on record. According to the A.O. the appellant company could not rebut the additions on account of provision for retention and power cost amounting to ₹ 2,80,72,176/- and provision for liquidated damage amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (c) in every case where the claim made by the assessee is not accepted by the Assessing Officer for any reason. The court held that this cannot be the intention of the legislature. Reliance was also placed on the judgment of Mumbai Tribunal in the case of Walter Saldhana 44 SOT 26 wherein it was decided as under: Mere making of a claim which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The assessee in the present case had made a bona fide claim and hence following the Apex Court's decision in the case of Reliance Petroproducts P. Ltd., it was held that penalty under section 271(1) (c) of the Act was not The Hon'ble jurisdictional High Court in the case of Smc Capital Ltd. vs. ITO 13(2) in ITA No.1342/Del./2010 has held that: 7. We have heard the rival contentions perused the material on record and gone through the case laws cited by both the parties. Assessee's plea that the mistake was inadvertent has not been controverted, this is an objective issue and inadvertence has to be gathere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al position. However, during the assessment proceedings the mistake was noticed and corrected by the respondent-assessee. On the above facts, the tribunal concluded the claim for deduction made by the respondent-assessee was on account of a bonafide mistake and in such circumstances, the levying of penalty was not justified. The grievance of the revenue is that penalty is justified in view of the fact that the respondent-assessee had not filed a revised return of income. However, the Tribunal noted that the time to file revised return had expired. In any event even the revenue does not dispute that it was a bonafide mistake on the part of the respondent-assessee. In the above view, imposition of penalty upon the respondent-assessee is not warranted. The Hon'ble Tribunal Pune Bench' A' in ITA No.1121/PN/2011 in the case of Amruta Organics P. Ltd. vs. DCIT Cir-l concluded that: 6. Having considered the rival submissions, we find that the mere mistake in making of a claim in the return of income would not ipso factor reflect concealment or furnishing of inaccurate particulars of income in terms of section 271 (1) (c) of the Act. The wrong claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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