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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: Shri Ramesh C.Sharmavk;dj vihy la-@ITA No. 631/JP/2018
ORDER
PER RAMESH C. SHARMA, AM
This is an appeal filed by the assessee against the order of the ld. CIT(A)-2, Jaipur dated 12-03-2018 for the Assessment Year 2013-14, in the matter of imposition of penalty u/s 271(1)( c) of the Act. 2.1 The facts in brief are that the assessee is a Limited Company and filed its return of income on 29-09-2013 declaring total loss of Rs. 22,98,582/-. The assessment has been completed u/s 143(3) of the Act wherein loss was reduced to Rs. 18,44,473/- by making addition of Rs. addition of Rs. 1.00 lac on lump sum basis by presuming increase in receipt of interest by the assessee. With respect to the addition of Rs. 3,54,109/-, the AO also levied penalty of Rs. 1,09,420/- u/s 271(1)
( c) of the Act 2.2 By impugned order, the ld. CIT(A) confirmed the action of the AO levying penalty of Rs. 1,09,420/- u/s 271(1)( c) of the Act against which the assessee is in appeal before this Bench.
2.3 I have heard the rival contentions carefully and gone through the orders of the lower authorities and found from the record that during the year under appeal, interest to the tune of Rs. 3,54,109/- had accrued to the assessee as interest on income tax refund granted u/s244A of the I.T. Act, 1961 for AYs 2009-10 to 2011-12. However, the said income tax refunds were neither received by the assessee (i.e. credited in the bank account of the assessee) nor any intimation was received regarding granting of any such refund or adjustment of such refunds against any taxes due on the part of assessee. The fact of granting of such refunds and interest thereon was brought to the knowledge of the assessee only during the assessment proceedings wherein it was intimated to the assessee that such refunds were granted to it and also that such refund alongwith interest thereon preceding Assessment Years. Thus no intimation of such appropriation / adjustment was given by the department to assessee and, therefore, the receipt of income tax refund and interest was not even in the knowledge of the assessee. This fact was submitted before the AO as well as ld. CIT(A) during the course of proceedings vide letter dated 25-07-2016 and written submissions dated 11-12-2017 respectively. We found that when the assessee was not even aware of either the grant of income tax refund or the interest thereon as the same stood adjusted by the department against the outstanding demand of preceding assessment years without any intimation to the assessee, there arose no question of declaring the interest on such refunds in the computation of income. Hence, no penalty could have been imposed for the failure on the part of the department to intimate accrual of such refund and the total interest thereon as well as the fact that the same has been adjusted against some earlier tax demands.
Thus, as the assessee had acted bona fide and declared the true income in its return of income according to its belief, question of either concealment or furnishing of inaccurate particulars of income does not arise, in facts and in circumstances of the case. In view of the above discussion, we do we direct the AO to delete the penalty.
3.0 In the result, the appeal of the assessee is allowed
Order pronounced in the open court on 05 /08/2019.