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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 ..... n 30/05/2018 itself i.e. way before the issuing first notice u/s. 143(2) of Assessment hearing, the plea of the revenue that had the AO 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 is not at all tenable. With regard to the claim of the revenue that had the AO 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. We are in complete agreement with the 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 inaccurate particulars of income at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue : Shri Subramanian .S, Addl. CIT (DR) ORDER PER KESHAV DUBEY, JUDICIAL MEMBER This appeal at the instance of the revenue is directed against the Order of the Ld.CIT(A)/NFAC vide DIN Order No. ITBA/NFAC/S/250/2023-24/1059833301(1) dated 17.01.2024 for the Assessment Year 2016-17 passed u/s. 250 of the IT Act, 1961. 2. The Revenue is aggrieved by the decision of the Ld. CIT(A)/NFAC in deleting the penalty of Rs. 1,78,30,779/- levied by the AO U/S 271(1)(c) of the Income Tax Act, 1961. 3. Before us the Revenue has raised the following grounds of appeal : i. The Ld. Addl. CIT(A) has erred on the facts and circumstances of the case 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/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.09.2018 and 10.12.2018 seeking certain information. The assessment proceedings were initiated and the Assessee duly produced the information called for. 4.5 The appellant filed submission on 13.12.2018 which also furnished the revised computation on carry forward of loss due the OGE of MAP order for AY 12-13 along with details of the tax paid on 30th May, 2018. 4.6 After considering the submissions and explanations of the Assessee, order u/s 143(3) of the Income tax Act was passed by the Income tax Officer, Ward-4(1)(3) (herein after referred as AO), Bengaluru on 17.12.2018 making an addition of Rs. 5,24,58,897/- by disallowing the excess brought forward losses/unabsorbed depreciation claimed, which was on account of the adjustment due to the OGE of 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 initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional taxes along with revised computation 13/12/ 2018 Order u/s 143(3) of the IT Act passed by ITO Ward 4(1)(3) dis- allowing excess bought forward losses/unabsorbed depreciation, Demand Notice and Initiation of penalty u/s 271(1)(c) 17/12/2018 Rectification u/s 154 filed by the assessee with ITO for considering the additional taxes paid 20/12/2018 Rectification order u/s 154 by the ITO Ward 4(1)(3) granting credit of additional taxes paid 13/3/2019 Submission of response in lieu of initiation of penalty proceedings u/s. 271(1)(c) in connection to Order passed u/s. 143(3) 13/3/2019 Notice served to the assessee by JCIT Circle 4(1)(2) post Transfer of Case 19/6/2019 Assessee's response and submission to show-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid 20/12/2018 Rectification order u/s 154 by the ITO Ward 4(1)(3) granting credit of additional taxes paid 13/3/2019 It is also the Contention of the assessee-appellant that the subject order giving effect to the MAP Resolution for AY 2012-13 was passed by the Ld. AO in its case on 10.05.2018 and by then the statutory time limit for filing the revised return for the year under consideration i.e. AY 2016-17 had already expired. In support of its claim that such contention is a bonafide-contention the assessee-appellant had submitted that in its own case on receipt of rectification and MAP Resolution Effect giving orders for AY 2009-10, it had voluntarily revised the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld.AR of the assessee has also filed a paper book comprising 457 pages enclosing therein the copies of documents/evidences submitted before the Authorities below. 6. Before us, the Ld. DR vehemently argued that had the assessing officer not issued the notice u/s. 142(1) of the IT Act dated 10.12.2018, the assessee could not have admitted the set off of brought forward losses at Rs. 4,91,78,071/- and would have got the refund. 7. Further, the Ld. DR submits that non-reporting of the revised entitlement of set off of brought forward losses in consequent to order giving effect to MAP resolution by the assessee suo-moto amounts to furnishing inaccurate particulars 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 receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward losses/unabsorbed depreciation claimed which was on account of the adjustment due to the Order Giving Effect(OGE) of the MAP Order received by the Assessee Company on 10/05/2018 by which the statutory time limit to file the revised return was already barred by time. 15. Based on the above additions of Rs. 5,24,58,897/- by way of disallowance of excess brought forward losses/unabsorbed depreciation, the Assessing officer initiated the penalty proceedings u/s. 271(1)(c) of the I. Tax Act, 1961 for furnishing inaccurate particulars of Income on or before the completion of the Assessment Proceedings. 16. Further, The Learned JCIT, Circle 4(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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er MAP order received for the Asst. Year 2009-10 2011-12 and the Assessee Company again had the intension of filing the revised return on receipt of Order giving effect(OGE) of MAP Order for the Asst. Year 2012-13 on 10/05/2018 but could not file the Revise return again as the time limit for filing revised return u/s. 139(5) of the I. Tax Act, 1961 had already lapsed on 31/03/2018 seems to be bonafide justifiable. Under the above mentioned reason we hold that as the Assessee Company had paid the additional Taxes along with the Interest suo motto amounting to Rs. Rs. 96,39,172/- on 30/05/2018 itself i.e. way before the issuing 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 30/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the additional Tax liability of Rs. 96,39,172/- for the Asst. year 2016- 17 voluntarily on 30/05/2018 but could not filed the revised return of Income again as the time limit for filing the revised return for the Asst. year 2016-17 was barred by time on 31/03/2018 whereas the Order giving effect to MAP Order was received only on 10/05/2018. Thus it is a fact on record that the disallowance has arisen owing/consequent to the passing of the Order dated 10/05/2018 by the Ld. AO giving effect to the MAP Resolution in Assessee s case for Asst. Year 2012-13 which resulted in change in the loss carried forward for set 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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