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TMI Blog2022 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ve reconciled difference by showing certain provisions, but said claim was not satisfactorily explained to the Assessing Officer as well as learned CIT(A). Even before us, although the assessee has filed a chart explaining difference between income and expenditure shown in ITR as well as Form 3CD, but claim of the assessee goes unproved in absence of any evidences. Therefore, we are of the considered view that there is no error in the reasons given by the Assessing Officer to make additions towards difference in net profit shown in ITR filed for relevant assessment year and tax audit report issued in Form 3CD. Assessing Officer, after considering relevant facts has rightly made additions towards difference in net profit. The learned CIT(A) after considering relevant arguments of the assessee has rightly held that there is no error in the reasons given by the Assessing Officer to make additions towards difference in net profit. Hence, we are inclined to uphold findings of the learned CIT(A) and dismiss appeal filed by the assessee. - I.T.A.No.2096/Chny/2019 - - - Dated:- 23-2-2022 - Shri Chandra Mohan Garg, Judicial Member And Shri G. Manjunatha, Accountant Member For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vide letter dated 11.12.2018 submitted that tax auditor has reported net profit as per unaudited financial statement, which has not considered year end provision towards salary expenses and employer contribution to EPF ESI, provision for partners salary, provision for depreciation on lift and bank interest income, after reconciliation with Form 26AS and if you consider these year end expenses, net profit reported by the assessee in the return of income filed for the relevant assessment year is correct. However, the tax auditor has not considered correct financials while uploading data in Form 3CD. Therefore, the assessee submitted that difference in net profit as per two documents has been reconciled. 4. The Assessing Officer however, was not convinced with the explanation furnished by the assessee and according to him, arguments of the assessee is that Tax Auditors Mr.Narayanaswamy and N.Krishnaswamy, who furnished audit report u/s.44AB of the Act, has not reported correct figures is incorrect, because audit report has been filed on twice, one before the assessee filed its return of income on 27.10.2016 and the other subsequent to filing of return of income by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or mistake of the auditor, who committed error in reporting financial statement to the department. The learned AR for the assessee submitted that the assessee has made year end provisions for various expenses, including salary of staff, salary to partners, employer contribution to EPF ESI and also corrected less depreciation claimed on lift, including unaccounted interest income on deposits as per Form 26AS. These expenses have not been considered by the auditor while uploading financial statement in Form 3CD. Therefore, for the mistake of the auditor, the assessee cannot be penalized, more particularly, when the assessee has explained reasons for difference in net profit shown in ITR filed for relevant assessment year and Form 3CD issued by the auditor. He further referring to the decision of the ITAT., Lucknow Bench in the case of M/s. Model Echoes Pvt .Ltd Vs DCIT in ITA No.657/Lkw/2017 vide order dated 10.01.2018, submitted that the Tribunal has apprised facts and held that for the mistake of auditor, the assessee cannot be penalized, when the assessee has explained differences. He had also relied upon the decision of the Hon'ble Supreme Court in the case of Price Waterho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee claims to have made certain year end provisions which has been not considered by the tax auditor. However, on perusal of reasons given by the Assessing Officer, it is abundantly clear that even after filing revised tax audit report, tax auditor has reported very same net profit which was reported in earlier tax audit report filed on 17.10.2016, even before the assessee filed return of income on 27.10.2016. If at all, claim of the assessee is correct that auditor has not considered year end provisions while uploading Form 3CD, then tax auditor would have corrected said mistake, when he had filed second audit report on 27.10.2016, subsequent to return of income filed by the assessee on 19.10.2016. In this case, net profit shown in Form 3CD as per first audit report filed on 17.10.2016 and second audit report filed on 27.10.2016 is one and the same, whereas, there is difference in net profit shown by the assessee in ITR filed on 19.10.2016 and same is unreconciled, although the assessee claims to have reconciled difference by showing certain provisions, but said claim was not satisfactorily explained to the Assessing Officer as well as learned CIT(A). Even before us, although th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal reached to the Hon'ble Supreme Court, the Hon ble Court, after considering fact that tax auditor has correctly quantified disallowance of expenses, came to the conclusion that this is all happened because of bonafide and inadvertent error while submitting return of income and such error can only be described as human error, which we all are prone to make for that it cannot be said that the assessee has furnished inaccurate particulars of income for levy of penalty u/s.271(1)(c) of the Act. In our considered view, facts of the case before the Hon'ble Supreme Court is altogether different and cannot be applied to the facts of this present case. In the present case, admittedly there is difference in net profit as shown in ITR and tax audit report and same has not been satisfactorily explained by the assessee. The Assessing Officer, after considering relevant facts has rightly made additions towards difference in net profit. The learned CIT(A) after considering relevant arguments of the assessee has righty held that there is no error in the reasons given by the Assessing Officer to make additions towards difference in net profit. Hence, we are inclined to uphold findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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