AGRANI INFRASTRUCTURE WORKS PRIVATE LIMITED (EARLIER KNOWN AS AGRANI TELECOM LTD),MUMBAI vs. ITO RANGE 12(1)(1), MUMBAI

Assessee by Shri Niraj Sheth & Shri Jay Bhansali Revenue by Shri Michael Jerald Date of Hearing 07/01/2020 Date of Pronouncement 15/01/2020 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2013-14 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-20, Mumbai in appeal No.CIT(A)-20/IT-10352/2016-17 dated 04/07/2018 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Áct’).

M/s. Agrani Infrastructure Works Pvt. Ltd. ( earlier known as Agrani Telecom Limited)

M/s. Agrani Infrastructure Works Pvt. Ltd. ( earlier known as Agrani Telecom Limited) dated 20/07/2015 had duly brought to the notice of the ld. AO, the reasons for filing revised return. We find from the paper book that first notice u/s.142(1) of the Act was issued by the ld. AO on 15/10/2015 wherein various details were called for by the ld. AO which admittedly included confirmations in respect of creditors. Before the issuance of this notice u/s.142(1) of the Act dated 15/10/2015, the assessee had already revised its return of income on 31/03/2015 which proves the bonafide intention of the assessee beyond doubt. Hence, the argument of the ld. DR that but for the case being selected for scrutiny, the assessee would not have come forward to file the revised return offering additional income is devoid of merits. At the cost of repetition, we would like to state that in any case, the assessee is having sufficient brought forward losses from earlier years. Hence, there cannot be any malafide intention that could be attributed to the assessee for concealing the particulars of income.

3.2. From the aforesaid observations, it could be safely concluded that the revised return has been filed by the assessee before detection was made by the ld. AO. The issuance of notice u/s 143(2) of the Act is only a general notice informing the assessee that his return has been selected for scrutiny. No specific queries whatsoever were raised by the ld AO at that stage. Hence, there cannot be any levy of penalty u/s.271(1)(c) of the Act on the assessee in the facts of the instant case. In this regard, we find that the ld. AR rightly placed reliance on the decision of the Hon’ble Jurisdictional High Court in the case of PCIT vs. Sterlite Opportunities and Ventures Ltd., in Income Tax Appeal No.894 of 2015 dt 21/02/2018 wherein the question raised before the Hon’ble High Court was as under:-

“(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal is right in holding that penalty under Sections 271(1)(c)

M/s. Agrani Infrastructure Works Pvt. Ltd. ( earlier known as Agrani Telecom Limited) cannot be levied on income declared in the revised return of income filed u/s. 139(5) of the I. T. Act, 1961?”

3.3. The order of the Hon’ble High Court disposing off this question by narrating the facts are reproduced hereunder for the sake of convenience:-

3 The Respondent originally filed its return of income for Assessment Year 2005-06, declaring a loss of Rs.20.64 Crores. On receipt of scrutiny notice under Section 143(2) of the Act, the Respondent filed revised return of income, reducing its income to 'Nil'. This by adding a sum of Rs.20.64 Crores under Section 14A of the Act. Thereafter, assessment was completed at Nil income, as declared by the Respondent Assessee in its revised return of income. 4 Thereafter, the present penalty proceedings were initiated by the Assessing Officer on the ground that the revised return by the Respondent-Assessee was not filed voluntarily but only after issuing a scrutiny notice under Section 143(2) of the Act. This on the ground of having filed inaccurate particulars of income and imposed penalty of Rs.7.40 Crores. 5 Being aggrieved, Respondent carried the issue in Appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By order dated 21st July, 2011, the CIT(A) deleted the penalty. This after having recorded a finding of fact by placing reliance upon the order of the Tribunal dated 27th May, 2011 in quantum proceedings. In the quantum proceedings, the Tribunal has held that there is nothing either in the order of the Assessing Officer or in the order of the CIT(A) to show that the revised return of income was filed only after the detection of the Revenue that the original return contained inaccurate particulars. It further records that the Tribunal in its order dated 27th May, 2011 has recorded the fact that even at the hearing, the departmental representative was unable to show that revised return was filed only after the Assessing Officer had detected inaccurate particulars of income in the original return of income. Thus, the CIT(A) comes to a finding of fact that the filing of the revised income was voluntarily done by the Respondent suo motu and not because of detection by the Revenue. 6 Being aggrieved by the order dated 21st July, 2011 of the CIT(A), deleting the penalty, the Revenue filed an appeal to the Tribunal. The Tribunal by the impugned order has also while coming to finding of fact, reiterates the finding in its earlier order dated 27th May, 2011 in quantum proceedings

M/s. Agrani Infrastructure Works Pvt. Ltd. ( earlier known as Agrani Telecom Limited) viz: the revised return filed under Section 139(5) of the Act, was valid return of income filed by the Respondent on its own and not on the basis of any investigation/ discovery done by the department of inaccurate particulars in the original return of income. Thus, holding that there is no basis for invoking Section 271(1)(c) of the Act . 7 Mr. Tejveer Singh, learned Counsel for the Revenue states that the revised return was filed only after the scrutiny notice was issued to the Respondent. Therefore, the penalty imposed upon the Respondent is justified. On the other hand, Mr. Parekh reiterates the finding in the orders of CIT(A) and the Tribunal. 8 We find that both the CIT(A) as well as Tribunal have recorded a concurrent finding of fact that revised return of income under Section 139(5) of the Act was filed by the Respondent-Assessee on its own and not on account of any detection of inaccurate particulars of income being filed by the Respondent in its original return of income. The finding of fact rendered both by the CIT(A) and the Tribunal that the revised return of income was filed by the Respondent suo motu and not consequent to detection of inaccurate particulars of income by the Assessing Officer, is not shown to be perverse. Admittedly, there is no allegation that the revised return of income filed by the Respondent- Assessee, contains any inaccurate particulars of income. 9 In these circumstance, particularly the finding of fact rendered both by the CIT(A) and the Tribunal, the question as proposed does not give rise to any substantial question of law. 10 Accordingly, Appeal dismissed. No order as to costs.

In view of the aforesaid factual observations and respectfully 3.4. following the aforesaid judicial precedent, we have no hesitation in cancelling the levy of penalty u/s.271(1)(c) of the Act. Since the issue of levy of penalty has been directed to be deleted on merits, the other technical argument made by the ld. AR that penalty would not survive as the notice issued thereon as the relevant part of the penalty notice was not struck off by the ld. AO need not be adjudicated upon and the same is hereby left open. Accordingly, the grounds raised by the assessee are allowed.

M/s. Agrani Infrastructure Works Pvt. Ltd. ( earlier known as Agrani Telecom Limited)

Order pronounced in the open court on this 15/01/2020