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TMI Blog2022 (4) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... AO that the new auditor appointed, had pointed out certain mistakes in the expenses claimed by the assessee and submitted the revised computation correcting the wrong claim work-in-progress as expenditure. This fact is being confirmed by the AO in the assessment order. Assessee has filed a complaint before the Institute of Chartered Accountants of India against the auditor who had filed the original return of income of the assessee. In our considered view, in the instant case, what has emerged is that the assessee, having realised that the expenditure claimed was not tenable as pointed out by the new auditors, offered the amounts expended to be added to the income and, accordingly, paid the requisite tax. This was not a case in our opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate bench of the Tribunal where the Hon ble Tribunal has taken cognizance of the fact that severing relationship with earlier CA might take time. We are of the view that the claim of the expenditure by the assessee is bona fide and accordingly, we set aside the order passed by Ld CIT(A) and direct the AO to delete the penalty levied u/s 271B(1)(c) for the year under consideration. Appeal of assessee allowed. - ITA No.19/Bang/2020 - - - Dated:- 19-4-2022 - Shri Beena Pillai, Judicial Member And Ms. Padmavathy S, Accountant Member For the Assessee : Shri Arvind V Chavan, Advocate For the Revenue : Shri Shehnawaz Ul Rahaman Addl. CIT ORDER PER PADMAVATHY S, ACCOUNTANT MEMBER This appeal is against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... putation of income, financial statements, tax audit report, the accounts and other details. The case was converted from limited scrutiny to complete scrutiny with the approval of CIT. During the course of assessment proceedings the assessee has admitted to the errors in the computation of expenses, Work-in-progress and wrong classification of Assets and expenses. The assessee has recomputed the expenses and re- classified the assets and liabilities and submitted the new working along with tax audit report. As part of this excess expenses are reversed to the extent of ₹ 77,75,425. The assessee has agreed for disallowance of the same. The AO verified the submissions of the assessee and disallowed the said expenses while passing the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the assessee on the basis that the assessee had not got its accounts audited in a timely manner and the same was done only when the assessment proceedings where going to be concluded. The CIT(A) relied on the decision of Delhi High Court in the case of Commissioner of Income Tax vs Zoom Communications Private Limited (2010) 191 Taxman 179 (Delhi) and thereby confirmed the order of AO 6. Aggrieved by the order of the CIT(A) the assessee is in appeal before The Tribunal. 7. The Ld AR reiterated the submissions made before the lower authorities and submitted that the assessee was not aware of that the chartered accountant has not maintained the accounts properly and once he came to know of the same has initiated proceedings agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled a complaint before the Institute of Chartered Accountants of India against the auditor who had filed the original return of income of the assessee. In our considered view, in the instant case, what has emerged is that the assessee, having realised that the expenditure claimed was not tenable as pointed out by the new auditors, offered the amounts expended to be added to the income and, accordingly, paid the requisite tax. This was not a case in our opinion, where, the assessee could be said to have either concealed particulars or furnished inaccurate particulars of the income. It was, essentially, a case, where, an untenable claim for deduction of work-in progress had been made and that too based on the advice of a professional, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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