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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 ..... y on such disallowance is not sustainable - we direct the AO 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. Assessee s appeal is partly allowed for statistical purposes. - ITA No. 931/Hyd/2019 - - - Dated:- 30-8-2021 - Smt. P. Madhavi Devi , Judicial Member And Shri Laxmi Prasad Sahu , Accountant Member Assessee by : Sri A. V. Raghu Ram Revenue by : Smt. N. Esther , DR ORDER Per Smt. P. Madhavi Devi , J. M. This is assessee s appeal for the A.Y 2015-16 against the order of the CIT (A)-3, Hyderabad, dated 7.2.2019 confirming the penalty order passed by the Assessing Officer u/s 271(1)(c) of the Act. 2. At the outset, it is seen that there is a delay of 16 days in filing of the appeal before the Tribunal and the assessee 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/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its computation of income, the assessee had added back only a sum of ₹ 10,86,618/- u/s 43B of the Act and further that the balance statutory liabilities which comes to ₹ 4,73,56,793/- were not paid before the due date of filing of the return of income. He accordingly brought it to tax. 6. Further, the Assessing Officer also noticed that the assessee has received interest income of ₹ 23,98,370/-, which was not taken into a/c while computing the income of the assessee. When asked to explain, the assessee submitted that the management erroneously omitted to consider the same in its computation of income and therefore, the assessee has no objection to the addition. Accordingly, the sum of ₹ 23,98,370/- was also brought to tax. 7. Thereafter, the Assessing Officer initiated penalty proceedings u/s 271(1)(c) of the Act by issuance of notice u/s 274 r.w.s 271(1)(c) of the Act. The assessee submitted its reply. With regard to the addition of ₹ 4,73,56,793/-, the assessee submitted that the entire amount does not pertain to the relevant A.Y and due to the change in the management of the company, certain omissions have taken place in the preparation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of hearing, the appellant prays that the appeal be allowed. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary . 10. The learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the assessee had filed an explanation before the Assessing Officer which has not been found to be incorrect and therefore, the penalty should 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 ₹ 4,73,53,793/- which is shown to be outstanding in the financial year 2015-16, consists the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 4,73,56,793/-. It is prayed that the appeal may be allowed by deleting the penalty of ₹ 1,61,43,100/- . 12. Thus, the assessee prayed for deleting the penalty levied u/s 274 r.w.s 271(1)(c). 13. The learned DR, on the other hand, relied upon the orders of the Assessing Officer and submitted that the assessee had not filed its return of income for the relevant A.Y disclosing its income and but for the scrutiny, the above issues would not have come to the notice of the Department and therefore, it is a clear case of concealment of income as well as furnishing of ina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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