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TMI Blog2024 (6) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... f brought forward losses at Rs. 4,91,78,071/- and would have got the refund. ii. The Ld. Addl. CIT(A) erred in not holding that nonreporting of revised entitlement of set off of brought forward losses in consequent to order giving effect to MAP resolution by assessee suo-moto amounts to furnishing inaccurate particulars of income." 4. The facts that lead to levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 are stated in brief as under:- 4.1 The brief facts of the case are that the Appellant Company is in the business of manufacturing and servicing of diesel engines and its components. The Appellant company bearing PAN AAFCM1573L filed the return of income for A.Y 2016-17 on 30.11.2016 declaring total income of Rs. 81,53,230/-. Subsequently, the Assessee filed its revised return of income on 25.05.2017 declaring total income of Rs. 4,87,96,230/- and paid the taxes as per the provisions of the Income Tax Act. On receipt of Rectification order and MAP Orders for AY 2009-10 and AY 2011- 12 in the month of December 2016, assessee filed a revised return on 25.05.2017 for AY 16-17 as there was a change in the income tax loss carried forward for set off in subsequent years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MAP order received on 10/05/ 2018 by which time the statutory time limit for filing the revised return was over. The AR of the Assessee submitted that the order u/s 143(3) was passed without considering the submissions made by the assessee on 13.12.2018 which had mentioned about the additional taxes paid by the Assessee on 30.05.2018. The income was assessed at Rs. 10,12,55,130/ and accordingly the penalty u/s. 271(1)(c) was initiated on 17.12.2018 for furnishing inaccurate particulars of income. 4.7 The assessee also filed for rectification u/s 154 on 20.12.2018 before the AO to consider the suo motto challan paid on 30.05.2018 and rectify the additions and demand raised by the AO. The AO vide order dated 13.3.2019 rectified and reduced the tax demand raised after considering the additional taxes paid by the Assessee. 4.8 Further, in response to the initiation of penalty proceedings, the assessee made his submission vide letter dated 13.03.2019 stating that penalty could not be levied since the assessee had furnished all the details and acted in bona fide manner in filing returns and payment of taxes and hence, there was no furnishing of inaccurate particulars of income. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow-cause notice 25/6/2019 Penalty order issued by JCIT Circle 4(1)(2) 27/6/2019 4.11 However, the Ld.JCIT, based on the fact that the Assessee had not made suo-moto submission regarding non-eligibility of brought forward loss either in its Return of Income or before the Assessing Officer as well as on the ground that assessee was not eligible to claim brought forward losses and accordingly furnished inaccurate particulars of Income during the Assessment proceedings had levied minimum penalty of Rs. 1,78,30,779/- vide Penalty Order passed u/s. 271(1)(c) dated 27/06/2019. 4.12 Being aggrieved by the aforesaid Penalty Order passed 271(1)(c), the Assessee filed an Appeal before the Learned CIT(A). The Learned CIT(A) deleted the penalty with the following observations- "It is fact on record that this disallowance has arisen owing/consequent to the passing of Order dated 10.05.2018 by the Ld. AO giving effect to the MAP Resolution in assessee's case for AY 2012-13 which resulted in change in the loss carried forward for set-off in the subsequent years including present year i.e. AY 2016- 17. The facts that the original return for year under consideration was filed on 30.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for giving effect to consequential change in quantum of carried forward loss in the year under consideration i.e. AY 2016- 17 on 25.05.2017. This submission of the assessee-appellant has NOT been denied by the Ld. AO. In addition to this, it is the contention of the assessee that though the time limit for the year under consideration to file the revised return had already expired as on 10.05.2018 (date of Order passed giving effect to the MAP Resolution i.r.o AY 2012-13 (supra)), the assessee on its own worked out the revised total income based on consequential effect of the Order passed on 10.05.2018 for the year under consideration and voluntarily paid the corresponding taxes on 30.05.2018. The assessee had also attached the copy of corresponding challan. The fact of payment of such taxes by the assessee on 30.05.2018 as claimed by it is also NOT in dispute. Finally, to emphasize and bring forth its point that it had made payment of such resultant additional tax on its own volition (voluntarily) on 30.05.2018, it has been highlighted by the assessee-appellant that as on the date of suo-motu payment of resultant additional tax i.e. 30.05.2018 its case was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of income. 8. The Ld.AR on the other hand, supported the order of the Ld.CIT(A) /NFAC and submitted that the Assessee has acted in a bonafide manner and had voluntarily disclosed all the relevant facts and also paid the additional taxes suo-motto on revised computation after the order giving effect of the MAP resolution was received by the Assessee. The Assessee paid the taxes voluntarily even much before the return was picked up for the scrutiny i.e. within 20 days of MAP Order giving effect for Asst. Year 2012-13 received. 9. We have heard the rival submissions and perused the material on record. 10. The summarised facts of the case is that the Assessee Company after filing the return of income for the Asst. year 2016- 17 on 30/11/2016 declaring total Income of Rs. 81,53,230/- filed the Revised Return of Income on 25/05/2017 declaring total income of Rs. 4,87,96,230/- for the Asst. year 2016-17 due to the fact that there was a change in the Losses carried forward for set off in subsequent years as the Assessee Company was in receipt of Rectification Order and MAP Orders for Asst. year 2009-10 and Asst. year 2011-12 in the month of December, 2016. Again after the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(2), Bangalore based on the fact that the Assessee had not made suo-moto submission regarding non-eligibility of brought forward loss either in its Return of Income or before the Assessing Officer as well as on the ground that assessee was not eligible to claim brought forward losses and accordingly furnished inaccurate particulars of Income during the Assessment proceedings had levied minimum penalty of Rs. 1,78,30,779/- vide Penalty Order passed u/s. 271(1)(c) dated 27/06/2019. 17. In the above factual matrix of the case, we deem it fit to decide the moot question that under the facts & circumstances of the case whether the Assessee had furnished inaccurate particulars of his Income specially when the Order giving effect (OGE) to MAP Order for the Asst. year 2012-13 was received by the Assessee after the date of filing the revised return for the Asst. year 2016-17 was barred by time and thereafter the Assessee had voluntarily paid the additional Tax liability of Rs. 96,39,172/- for the Asst. year 2016-17 even before the issuance of Notice for Assessment Proceedings. 18. The relevant provisions of the I. Tax Act, 1961 are as under- 271- Failure to furnish returns, comply wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng first notice u/s. 143(2) of Assessment hearing , the plea of the revenue that had the Assessing Officer not issued the notice u/s. 142(1) dated 10/12/2018 the assessee would not have admitted the set off of brought forward losses at Rs. 4,91,78,071/- is not at all tenable. Further with regard to the claim of the revenue that had the Assessing Officer not issued the Notice u/s. 142(1) dated 10/12/2018 the Assessee would have got the Refund is also not tenable as the Assessee Company had already paid the additional taxes along with the Interest suo motto on 30/05/2018 under minor head "Tax on Regular Assessment (400)" after the preparation of revised computation way before the issuance of Notice u/s. 143(2) for the Asst year 2016-17. The Assessing Officer did not bring any material on record that the explanation given was not bonafide. 21. We are in complete agreement with the Learned CIT(Appeals) that the original return for year under consideration was filed on 30/11/2016 & the revised return was filed on 25/05/2017 which are not in dispute & therefore the underlying additions/disallowance for levy of impugned penalty was not w.r.t concealment of Income or furnishing of inaccur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et off in the subsequent years including the Present Asst. Year 2016-17. Therefore we are of the opinion that the underlying additions/disallowances for levy of impugned penalty was not with respect to furnishing inaccurate particulars of income at the time of filing of the return for the year under consideration. It goes without saying that for applicability of section 271(1)(c), the conditions u/s 271(1)(c) must exist before the penalty is imposed. Therefore this ground of the Revenue also fails. 24. In our Opinion In the present case merely because the Assessment Order was passed on the basis of Addition/Disallowances & the Assessee agreed to the Addition & already paid the Taxes along with the Interest way before the initiation of the Assessment Proceedings , it could not be inferred that the Assessee has furnished inaccurate particulars of Income. Moreover the Assessee Company had offered an explanation. The explanation was also not found to be false. On the contrary it was held to be bona fide. Therefore the Assessing Officer can't resort to the levy of Penalty u/s. 271(1)(c). In view of the above we do not find any infirmity in the decision taken by the Ld. CIT(A) in delet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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