9911796707
TMI Blog2017 (3) TMI 1940X X X X Extracts X X X X X X X X Extracts X X X X ..... ng incorrect particulars. Therefore for the fault of the professional, the Assessee cannot be penalized. There is no intention of furnishing of any inaccurate particulars or concealment of income as the facts undoubtedly suggest in this case. Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. [ 2012 (9) TMI 775 - SUPREME COURT] considered a situation where the Assessee by mistake claimed deduction in respect of provision towards payment of gratuity in its return of income even though tax audit report indicated that such provision was not allowable. Hon ble Madras High Court in the case of CIT Vs. Balaji Distelleries Ltd [ 2012 (10) TMI 514 - MADRAS HIGH COURT] following the decision of the Hon ble Supreme Court in the case of Price Waterhouse Coopers pvt. Ltd,[ 2012 (9) TMI 775 - SUPREME COURT] held that the absence of due care does not mean that the Assessee was guilty of furnishing inaccurate particulars to conceal his income. We hold that there is no concealment of income or furnishing of inaccurate particulars of income by the Assessee, but it is only a mistake in not adding back the expenses disallowable in the computation of income while uploading the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) read with Explanation-1 to section 271(1)(c) of the Act and thereby suppressed the real income of Rs.13,19,73,099/-. 4. The Assessee submitted that the said expenses were shown as disallowances in the tax audit report by the auditors and during electronic filing of the return the said disallowances were not entered properly in the column of disallowances and accordingly it showed a loss. It was submitted that the Assessee did not notice the mistake for the reason that the professional who was engaged for upholding the return made this mistake. It was further submitted that it was under the impression that since the inadmissible expenditure is reported in tax audit report it will be considered as disallowance. Assessee submitted that these expenses were never claimed by the Assessee in the first place and secondly eventual loss has wrongly mentioned in the return of income was not allowed to be carried forward since loss was foregone due to late filing of return. It was submitted that the wrong entry in the return of income/mistake apparent from the records since the said amounts are expressly disallowed in the tax audit report. Therefore, it was contended before the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the disallowances reported in tax audit report were not added back to the income. Thus, the disallowances of Provisions, capital items etc. of Rs.13,11,45,849/- also listed in the tax audit report were added back during the assessment. He submits the following list of additions is as mentioned below:- Particulars Amt Disclosure CWIP Written off 85653266 Clause 17(f) of Tax Audit report Provision for doubtful debts 25491606 Clause 17(f) of Tax Audit report Advances written off 9289916 Addition agreed suo moto Provision for doubtful advances 8859577 Clause 17(f) of Tax Audit report Deposits written off 1830000 Addition agreed suo moto Statutory Audit Fees 716950 Clause 17(f) of Tax Audit report Tax Audit fees 110300 Clause 17(f) of Tax Audit report The Ld. Counsel for the Assessee submits that Rs.12,08,31,699/- were expressly shown as inadmissible in the tax Audit Report and the two other items were advances, and deposits written off. He submits that the addition of the same was agreed suo moto during the assessment, since there was no use of the said loss to the assessee as it could not have been carried forward. He further submits that the Provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reported in the return is not eligible for carry forward and set off against income in subsequent assessment years. The Assessee submits that the return and computation was prepared by the then CFO and he did not properly upload the return by showing the expenses disallowable as reported in the tax audit report. The Assessee contended that in the tax audit report the auditors have mentioned that these expenses were not allowable, however, while uploading the return, the employee had made a mistake in not disallowing these expenses. The Assessee further contended that in any case return was filed belatedly in which event the loss reported by the Assessee is not eligible for carry forward and there is no occasion for claiming such loss in the future years, therefore, there is no loss to the revenue. The Assessee contended that it is a mistake committed by the employee of the company and therefore it was submitted that there is no deliberate concealment or furnishing of inaccurate particulars by the Assessee. It was contended that it is a human error in filing electronic form of return and it was remained unnoticed while filing the return. The error came to be noticed only in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction in respect of provision towards payment of gratuity in its return of income even though tax audit report indicated that such provision was not allowable. The Hon'ble Supreme Court held as under : "14. During the course of hearing this appeal against the judgment and order of the Calcutta High Court, we had required the assessee to explain to us how and why the mistake was committed. 15. The assessee has filed an affidavit dated 14th September, 2012 in which it is stated that the assessee is engaged in Multidisciplinary Management Consulting Services and in the relevant year it employed around 1000 employees. It has a separate accounts department which maintains day to day accounts, pay rolls etc. It is stated in the affidavit that perhaps there was some confusion because the person preparing the return was unaware of the fact that the services of some employees had been taken over upon acquisition of a business, but they were not members of an approved gratuity fund unlike other employees of the assessee. Under these circumstances, the tax return was finalized and filled in by a named person who was not a Chartered Accountant and was a common resource. 16. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s allowed and the order passed by the Calcutta High Court is set aside." 13. In the case of CIT Vs. Somany Evergree Knits Ltd. [352 ITR 592], the Bombay High Court held as under : "7. We have heard the rival submissions. The Id. Counsel for the assessee reiterated the stand of the assessee as put forth before the revenue authorities. He further relied on the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Deep Tools Pvt. Ltd., 274 ITR 603(P&H), wherein it was held that bonafide and inadvertent mistake of a chartered accountant while filing a return of income will not amount to furnishing of inaccurate particulars of income. Reliance was also placed on the decision of the Punjab & Haryana High Court in the case of CIT vs. Shahabad Company-operative Sugar Mills Ltd. (2009) ITS 2255[(decision of P&H High Court in ITA No.19 of 2007 (O&M)] dated 12/10/2009, wherein it was held that making a wrong claim for deduction of depreciation of Guest House does not invite an order imposing penalty. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd. 322 ITR 158(SC), wherein it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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