ACIT, CIRCLE-18(2), NEW DELHI vs. NIRULAS CORNER HOUSE PVT. LTD., NEW DELHI

This appeal by the Revenue is preferred against the order of the ld. CIT(A) - 36, New Delhi dated 12.02.2019 pertaining to A.Y. 2012-13.

The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the penalty of Rs. 1,72,26,624/- levied by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'].

None appeared on behalf of the assessee in spite of notice.

We have heard the ld. DR at length. Case records carefully perused.

The roots for levy of penalty lie in the assessment order dated 27.02.2015 framed u/s 143(3) of the Act wherein assessed income was Rs. NIL.

Though the assessment was framed at NIL income, the Assessing Officer denied claim of carry forward of business losses of Rs. 8,61,02,164/- as return of income was filed after due date prescribed u/s 139(1) of the Act. Penalty proceedings u/s 271(1)(c) of the Act were separately initiated.

During the penal proceedings, it was brought to the notice of the Assessing Officer that the assessee has filed rectification application u/s 154 of the Act in which the assessee was allowed the unabsorbed deprecation to be carried forward and remaining current year loss was disallowed.

The Assessing Officer was of the opinion that nowhere the assessee has addressed the issue of levy of penalty u/s 271(1)(c) of the Act for claiming current year business loss to be carried forward to the next year when the return was filed after due date prescribed u/s 139(1) of the Act. The Assessing Officer concluded the penalty proceedings by levying penalty of Rs. 1,72,26,620/-.

The assessee carried the matter before the ld. CIT(A) and vehemently stated that income has been assessed at NIL and penalty has been levied for claiming carry forward of losses. It was once again explained that losses of Rs. 8,61,02,164/- included unabsorbed depreciation of Rs. 3,03,52,570/-, which were subsequently allowed to be carry forward by allowing rectification application made u/s 154 of the Act.

After considering the facts and submissions, the ld. CIT(A) was of the opinion that the assessee has not claimed losses incurred for Assessment Year 2012-13 in its return of income filed for Assessment Year 2013-14 or thereafter. Therefore, the penalty was deleted by the ld. CIT(A).

Before us, the ld. DR strongly relied upon the findings of the Assessing Officer.

We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the income was assessed at Rs. NIL and there was no variation in the returned income.

It is not the case of the assessee nor of the Revenue that the assessee has claimed set off of brought forward losses during the year under consideration inspite of belated return of income. On the contrary, the assessee has simply claimed carried forward of losses and even if the return is belated, the Revenue is not prevented by disallowing claim of set off in subsequent Assessment Years.

Considering the facts of the case in totality, we do not find any reason to interfere with the findings of the ld. CIT(A).

In the result, the appeal of the Revenue in is dismissed.