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TMI Blog2023 (12) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as 'the Act') relating to the Assessment Year 2015-16. 3. ITA No. 149/Ahd/2020 is appeal filed by the Assessee as against the appellate order dated 09.01.2020 passed by the Commissioner of Income Tax (Appeals)-1, Ahmedabad arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year (A.Y) 2016-17. All these appeals are heard together and are disposed of by this common order. 4. Now first we will take in ITA No. 277/Ahd/2020 for A.Y. 2012-13 (Revenue Appeal). 5. The Registry has noted that there is a delay of 53 days in filing the above appeal. The appeal is filed on 27.05.2020. This period falls under COVID-Pandemic situation, thus following Hon'ble Supreme Court judgment dated 23.3.2020 in suo moto Writ Petition (Civil) No.3 of 2020, vide Hon'ble Supreme Court has extended time limit for filing appeals w.e.f. 15.3.2020. Thus, there is no delay in filing the above appeal and we take the appeal of the assessee for adjudication. 6. The brief facts of the case is that the assessee is Private Limited Company engaged mainly in the business processing of cloth and real estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to the decision, where there is no finding that any details were supplied by the appellant in its return of income found to be incorrect or erroneous or false there was no question of invoking the penalty under section 271(1)(c) Mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the appellant. Reliance is placed on the order in the case of Hindustan Steel Ltd. vs. State of Orissa 83 (TR 26 (SC). Wherein it is held that penalty will not be imposed merely because it is lawful to do so. Whether should be imposed for failure to perform a statutory obligation is matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. In one of the cases the jurisdictional ITAT has given detailed reasoning to confirm the deletion of penalty u/s 271(1)(c), i.e. in the case of Nin Finance & Credit Capital Pvt. vs. ACIT, Cir.3, Baroda on 28 Sept., 2012, ITAT, Ahmedabad observed as under:- We have heard both sides. We have perused the orders of the authorities below. As far as the question of levy of penalty in respect of an addition pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see gives an explanation which is although unproved but simultaneously not disproved, however, circumstances also do not lead to a positive inference that the explanation of the assessee was false, then the Explanation annexed to section 271(1)(c) do not help the Department to levy the penalty, because no material is brought on record to demonstrate that the explanation offered was bogus or false although not accepted. Therefore, because of this reason the penalty proceeding can be said to be distinguishable from the quantion proceedings. By placing reliance on National Textiles 249 ITR 125 (Guj.), wherein it was held that in order to justify the levy of penalty there must be same circumstances leading to a reasonable conclusion that the amount does represent assessee's concealed income and that it is not enough that the amount has been assessed as income and further that the circumstances must show that there was animus concealment coupled with furnishing of inaccurate particulars on the part of the assessee, therefore we hereby hold that the ld.CIT(A) has rightly deleted the penalty. It is mentioned that Hon'ble Gujarat High Court has held in the case of CIT VS. Whitefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars of income, wherein penalty u/s. 271(1)(c) of the Act cannot be levied and relied upon various case laws. Ld. Counsel further submitted that for imposition of penalty, it is necessary to bring on records some material or evidence or circumstances leading to reasonable conclusion that the amount of addition under consideration represent the income of the assessee. It is also necessary that there is conscious concealment or Act of furnishing inaccurate particulars of income on the part of the assessee, which is totally absent in the present case. The Assessing Officer has not proved the explanation offered by the assessee is false and thereby levy of penalty is not justifiable and relied on the following case laws: (i) T Ashok Pai v CIT (210 CTR 259 (SC)) (ii) Dilip N Shroff v JCIT (291 ITR 519 (SC)) (iii) Hindustan Steel Ltd. v State of Orissa (83 ITR 26 (SC)) (iv) K.C. Builders & Arn v ACIT (265 ITR 562 (SC)) (v) Reliance Petroproducts Pvt. Ltd. (332 ITR 158 (SC)) 13. We have given our thoughtful consideration and perused the materials available on record including the submissions and Paper Book filed by the assessee. Regarding the first issue of penalty namely proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , thus the assessee has not furnished inaccurate particulars of income. There is no finding by the Assessing Officer that the details furnished by the assessee in the Return of Income found to be incorrect or erroneous or false, whereby invoking penalty u/s. 271(1)(c) of the Act. Mere making of a claim, which is not sustainable in law by itself will not amount to furnishing inaccurate particulars of income by the assessee. Therefore following the Hon'ble Supreme Court judgment in the case of Reliance Petroproducts Pvt. Ltd., the levy of penalty on this issue is liable to be deleted. Thus we do not find any merits in the grounds raised by the Revenue. 14. In the result, the appeal filed by the Revenue is hereby dismissed. ITA No. 176/Ahd/2021 for A.Y. 2015-16 (Assessee Appeal) 15. The Grounds of Appeal raised by the Assessee reads as under: (1) In law, on facts and in circumstances of the case, the impugned assessment order passed u/s. 143(3) by the Ld. Income Tax Officer, Ward 1(1)(4), Ahmedabad is against natural justice, bad in law & deserves to be cancelled. (2) On facts, in law and in circumstances of the case, the Ld. CIT(A)-1, National Faceless Appeal Centre, Delhi has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed u/s. 143(3) by the Ld. Income Tax Officer, Ward- 1(1)(4), Ahmedabad is against natural justice, bad in law & deserves to be cancelled. (2) On facts, in law and in circumstances of the case, the Ld. CIT(A)-1, Ahmedabad, has grossly erred in forming the addition of Rs. 75,00,138/- on account of disallowance of interest u/s. 40A(2)(b) of the Act. The Ld. A.O. may be directed to delete such addition. (Tax effect is Rs. 23,40,043/). 22. Ld. Counsel for the assessee submitted before us a copy of the assessment order dated 19.03.2022 passed in assessee's own case for the Assessment Year 2017-18 wherein no disallowance is made u/s. 40A(2)(b) of the Act. The Ld. Counsel also produced before us copy of the ledger accounts of the above two parties wherein interest have been paid @ 18% as like that of the earlier years. Thus he submitted taking into account the personal guarantee given by the above two persons to the assessee company, there is no disallowance required to be made u/s. 40A(2)(b) of the Act. 23. Ld. Sr. D.R. Shri Ashok Kumar Suthar appearing for the Revenue could not contravent the above submission of the assessee and also could not place on record, whether the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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