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TMI Blog2021 (9) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed an application explaining the reasons for the delay and sought condonation of delay. The contents of the affidavit filed in support of the said application are as under: "1. I, S.Subrahmanya Sastry, s/o late S.A Sarma, aged 56 years r/o H.No.1-6-18/4, Road No.35, Chaitanyapuri, Hyderabad, occupation Manager, accounts in M/s. Raasi refractories Ltd., Hyderabad do solemnly affirm and state as follows. 2. Appellate Order dated 07-02-2019 passed by C.I.T (Appeals)-3, Hyderabad u/s.250 of the LT Act, '61, in ITANo:10131/DCIT,-Cir.3(1)/Hyd/CIT(A)-3,Hyderabad 2018-19 in the case of M/s.Raasi refractories Ltd., was received on 16-3-2019. I informed my employer who instructed me to contact the tax consultant and get the appeal pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s 143(3) of the Act, the assessee was required to file certain details. The assessee filed such details. 5. On perusal of the balance sheet of the assessee, the Assessing Officer noticed that there were outstanding statutory liabilities of Rs. 4,84,43,411/-. Therefore, the details of the payments made against such statutory liabilities were called for. After perusal of the details filed by the assessee, the Assessing Officer observed that in its computation of income, the assessee had added back only a sum of Rs. 10,86,618/- u/s 43B of the Act and further that the balance statutory liabilities which comes to Rs. 4,73,56,793/- were not paid before the due date of filing of the return of income. He accordingly brought it to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to the addition of Rs. 23,98,370/- the Assessing Officer held that but for the scrutiny, the same would not have come out and the assessee has sought to avoid the payment of tax. Thus observing, he levied the minimum penalty of Rs. 1,61,43,100/- being 100% of the tax sought to be avoided. 9. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the Assessing Officer and the assessee is in second appeal before the Tribunal by raising the following grounds of appeal: "1. The order of the learned CIT (A) is against law, weight of evidence and probabilities of the case. 2. The learned CIT(A) ought to have appreciated the submissions made by the assessee and sought to have held that the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have been levied by the Assessing Officer. He further submitted that the notice u/s 274 r.w.r 271(1)(c) is also not valid because the Assessing Officer did not strike off the irrelevant portion of the notice for levy of penalty. In support of his contentions that where the notice is not valid, the consequent penalty is not sustainable, he placed reliance upon the decision of the Hon'ble Andhra Pradesh High Court in the case of Pr. CIT vs. Smt. Baisetty Revathy in I.T.T.A. NO.684 of 2016, dated 13th July, 2017. As regards the merits of the issue,, he submitted that the sum of Rs. 4,73,53,793/- which is shown to be outstanding in the financial year 2015-16, consists the statutory liabilities of the earlier years and therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Overseas Bank (IOB) ESI Co's contribution 20,35,363 27,04,920 Issued posted dated cheques Excise provision on closing stocks 40,09,107 40,09,107 Reversed Professional Tax 42,345 16,350 Cash TDS employees 32,760 36,000 IOB TDS Contractors 53,036 57,401 IOB TDS on Professional 52,609 55,805 IOB TDS on rent 80,677 90,162 IOB Total 65,61,059 72,07,832 It is respectfully submitted that Excise Provision on closing stock as on 31.03.2015 was a provision and hence the same is reversed as on 1.4.2015. Except that , these are the only payments made by the Appellant during financial year 2015-16, from out of the amount outstanding of Rs. 4,73,56,793/-. It is prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sustainable. It is accordingly dismissed. 15. As regards the merits of the issue, we find that the assessee has not offered the interest income to tax and therefore, the penalty on such addition is sustainable. However, with regard to the disallowance of Rs. 4,73,56,793/- on which the penalty is levied, we find some strength in the argument of the assessee that these are pertaining to the earlier A.Ys. When they did not pertain to the relevant A.Y, the penalty on such disallowance is not sustainable. In view of the same, we direct the Assessing Officer to verify the statutory liabilities which pertain to the earlier years and on such items, no penalty u/s 271(1)(c) of the Act shall be levied. 16. In the result, assessee's appeal is part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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