9911796707
TMI Blog2019 (9) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... ty - Assessee doesn t deserve to succeed on this ground. The assessing officer has after disallowance of the impugned amount duly noted in the assessment order that penalty proceedings u/s. 271(1)(c) of the Act is initiated . Consequent to amendment in section 271 by insertion of section 271(1B) duly applicable in the extant assessment year, this is sufficient satisfaction and the penalty cannot be annulled on the ground of lack of satisfaction by the assessing officer. Penalty may not be levied on bonafide and inadvertent error of the assessee - In our considered opinion showing a huge amount of foreign currency translation loss on capital account by a multinational company as revenue loss can by no stretch of imagination be considered to be a bonafide - assessee was very well aware that it was deliberately showing capital account transaction loss as loss on revenue account. Hence by no stretch of imagination it can be said that there was any inadvertent error. It was fully considered decision of the assessee to show the capital loss as revenue loss. Hence this limb of the argument is dismissed and inadvertent error. Assessee voluntarily disclosed during the course of assessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of foreign exchange fluctuation loss during the course of assessment proceedings. 5) On the facts and in the circumstances of the case, the learned CIT(A) erred in not appreciating the fact that the disallowed expense (ie foreign exchange fluctuation loss) was suo-moto offered for tax by the Appellant during the course of assessment proceedings. 3. Brief facts of the case relating to levy of penalty are as under :- The assessee-company is engaged in the business of manufacture of industrial belts, building material and has state of art manufacturing facilities across the globe. In the assessment order the Assessing Officer has held as under :- "On perusal of the profit and loss account, it is seen that out of the total foreign currency loss of ₹ 1,84,85,987/- debited, ₹ 1,68,68,672/- pertains to capital assets and should have been capitalized. Since the same was not added to the total income, it now disallowed u/s. 37 of the I.T. Act, 1961. (Disallowance of ₹ 1,68,68,672/-). Penalty proceedings u/s. 271(1)(c) of the Act is initiated". 4. In the penalty order u/s. 271(1)(c) of the Act, the Assessing Officer noted that penalty proceedings u/s. 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d return could have been filled by the assessee as the Act gives adequate time for the same. 5. The Assessing Officer further referred to the decision of Hon'ble Apex Court in the case of Union of India Vs. Dharmendra Textiles Processors (166 Taxmann 65) and decision in the case of K.P. Madhusudanan Vs. CIT (251 ITR 99). The Assessing Officer further distinguished the decision relied upon by the assessee and finally concluded that he was satisfied that the assessee had furnished inaccurate particulars of its income and concealed its income in various issues discussed above. 6. Against the above order, the assessee has filed the appeal before learned CIT(A). However learned CIT(A) upheld the decision of the Assessing Officer. 7. Against the above order the assessee is in appeal before us. 8. At the outset, learned Counsel of the assessee contended that notice in this case u/s. 271(1)(c) is invalid in as much as in appropriate portion of the notice has not deleted by Assessing Officer. For this proposition he referred to several case laws. Learned counsel further referred to the following case laws : * SSA's Emerald Meadows (ITA 380/2015) (Karnataka HC) approved by SC ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT-A. Learned CIT-A has duly noted the assessee's submission in his order. However while adjudicating the issue he has omitted to adjudicate this ground raised before him. Hence in our considered opinion the interest of justice requires that this issue should be remitted to the file of learned CIT-A. Learned CIT-A is directed to consider the issue afresh after giving the assessee proper' opportunity of being heard. The learned CIT-A should also take into account the various case laws on the subject as available and as canvassed by the assessee as aforesaid. The learned CIT-A should also take into account the decision of honourable of apex court in the case of CIT Vs. S.V. Angidi Chettiar (XLIV ITR 739). Accordingly this issue raised is remitted to the file of learned CIT-A with directions as above. 12. Another ground raised is that penalty proceeding is invalid as satisfaction is not recorded by the assessing officer at the time of initiation of penalty. 13. In our considered opinion the assessee doesn't deserve to succeed on this ground. The assessing officer has after disallowance of the impugned amount duly noted in the assessment order that "penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e account. Hence by no stretch of imagination it can be said that there was any inadvertent error. It was fully considered decision of the assessee to show the capital loss as revenue loss. Hence this limb of the argument is dismissed 18. Another ground raised is that penalty cannot be levied as assessee voluntarily disclosed during the course of assessment proceedings. 19. Up on careful consideration we are of the considered opinion that on the facts and circumstances of the case by no stretch of imagination it can be said that there was any involuntary disclosure by the assessee. The assessing officer has duly detected the huge amount of capital transaction loss. He had asked the assessee the detail thereof in these circumstances assessee had no option but to disclose the same. By no stretch of imagination it can be said to be voluntarily disclosure. The decision of the apex court in the case of K.P.Madhusudanan fully applies on the facts of the case. Hence this ground raised by the assessee stands dismissed. 20. Another limb of assessee's argument is that it had relied upon the tax auditor's report. We find that the tax audit is conducted on the basis of information and expla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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