DCIT, NEW DELHI vs. M/S. PRAGATI POWER CORPORATION LTD., NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SMT. ANNAPURNA GUPTA & SMT. MADHUMITA ROY
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER
Present appeal has been filed by the Revenue against order past by the Ld. Commissioner of Income Tax (Appeals) -XVII
(CIT(A) in short) under section 250(6) of the Income Tax
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M/s PragaƟ Power CorporaƟon Ltd.
Act,1961(hereinafter referred to as” Act”), confirming the levy of penalty by the Assessing Officer (AO)under section 271(1)(c) of the Act. This appeal is recalled vide M.A. No. 119/Del/2019, vide order dated 07.06.2024. 2. The grounds of appeal raised read as under:
“ (i) "In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the penalty levied under section 271(1)(c) amounting to Rs.6256808/-by accepting the plea of the assessee that the assessee had in original return of income and computation of income added back the sum of Rs.18407792/-ignoring the facts of the case that the assessee itself admitted the default vide letter dated 08.12.2011 filed the revised computation of income.
(ii) "The appellant craves to be allowed to add any fresh grounds of appeal and/or delete or amend any of the grounds of appeal."
At the outset itself Ld. DR pointed out that penalty in the present case, for concealing/furnishing inaccurate particulars of income u/s 271(1)(C) of the Act, was levied by the AO for the assessee not having disallowed prior period Expenses amounting to ₹1,84,07,792/- while computing its income liable to tax. 4. Learning DR pointed out that the Ld. CIT (A) deleted the penalty holding that the assessee had not furnished inaccurate
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particulars of income nor had concealed particulars of income since he had verified that the assessee in its return of income originally filed had accounted for the said sum of prior period expenses. Our attention in this regard was drawn to the findings of the Ld. CIT (A) in this regard at para 5.2 to 5.4 of the order as under:
“ 5.2. The appellant stated that the appellant had in the original return of income and computation of income added back the sum of Rs.1,84,07,792/- which was prior period expenses and computed the tax payable after including this amount. In view of this no penalty for concealment of income would be attracted.
I have verified that the appellant has in the return of income originally filed accounted for the sum of Rs.1,84,07,792/-.
5.3. For imposition of penalty u/s 271(1)(c), the appellant should have concealed his income or furnished inaccurate particulars of its income or given an explanation which is not bonafide. The AO has not given any finding that the details submitted by the appellant were incorrect or false. A mere making of an incorrect claim would not amount to furnishing inaccurate particulars.
5.4. The appellant had clearly not concealed or furnished inaccurate details in respect of Rs.1,84,07,792/- which were prior period expenses. The details were all available on record.”
The Ld. DR contented that these findings of the Ld. CIT(A) are contrary to that recorded by the AO. She drew our attention to the assessment order passed u/s 143(3) of the Act in the case of the assessee for the impugned year wherein she pointed out
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that while dealing with the issue of prior period expenses at para
7 of the order, the AO had categorically recorded the fact that in the original return of income filed the assessee had not disallowed prior period Expenses of 1,84,07,792 ,which fact was admitted to by the assessee by filing a revised computation of income disallowing the said expenses. Our attention was drawn to para 7
of the assessment order which reads us under:
“7. Prior Period Expenses :-
During the course of assessment proceedings it is noticed that prior period of expenses of Rs. 1, 84,07,792/- were not added back to the income of the assessee at the time of filing its original return at income Rs. 97,65,96,877/-. The assessee was asked to furnished the details of prior period expenses and why the same are not added back to its income.
7.1 The assessee has himself admitted this fact by filing a revise computation of income alongwith letter dated 08/12/2011 in which prior period expenses of Rs. 1,84,07,792/- were added back to its income under normal provision and the total income has been workout at Rs.99,50,04,669/-after claiming deduction u/s 801A of the I.T. Act. Moreover, the assessee did not file any revise return in this regard within the stipulated time limit prescribed in the Act. Therefore, the prior period expenses of Rs. 1,84,07,792/- are added back to the income of the assessee.”
Ld. Counsel for the assessee on the other hand countered by stating that the Ld. CIT (A) had on verification of the records, found as a matter of fact the assessee to have accounted for the ITA No.- 6192/Del/2014
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prior period expenses while computing its income. Our attention was drawn to the Acknowledgement of the original ITR filed by the assessee alongwith the computation of Income placed at Paper
Book page No.1 & 2 resp. and also the copy of Return of Income originally filed placed at P.B 3-33. 7. Drawing our attention to the computation of income at P.B
2, Ld. Counsel for the assessee pointed out that the assessee had disallowed prior period expenses while computing its income determining its Gross total income at Rs. 184,82,97,875/- and after claiming deduction u/s 80IA of the Act had computed total income of Rs.99,50,04,669/-. He pointed out that the total tax determined as payable in the computation was Rs.32,89,10,965/-
. Next, he drew our attention to the Ack. Of ITR and pointed out that the tax payable therein tallied with that computed by the assessee at Rs. 32,89,10,965/-, however the figures of Gross
Income and taxable income varied by the disallowance of prior period expenses at Rs.182,98,900,83/- and Rs.97,65,96,877/- respectively. He drew our attention to the complete return of income pointing out therefrom that at point no 15 (P.B 10) the ITA No.- 6192/Del/2014
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assessee had disclosed the amount of income or expenditure of prior period credited or debited to the profit and loss account of 1,84,07,792. He contended that the figure of income returned was incorrect and a punching mistake and since evidently assessee had shown taxes payable and paid taxes on income computed after disallowing prior period expenses, the Ld. CIT(A) had correctly appreciated the facts while recording that the assessee had disclosed /accounted for prior period expenses while computing its income. He contended therefore that the Ld. CIT(A) had rightfully deleted the penalty levied under section 271 (1)(c) of the Act
8. Having heard the rival contentions, we do not find any infirmity in the order of the Ld. CIT(A) deleting the penalty levied under section 271(1)(c) of the act in the present case. Admittedly the penalty was levied for concealing / furnishing inaccurate particulars of income relating to prior period expenses of Rs.1,84,07,792/- allegedly not disallowed by the assessee in the original return of income filed. The Ld. CIT(A) has recorded a finding of fact that the assessee had accounted for the prior period
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expenses while computing its income and had mentioned verifying the said fact from records before him. The Ld. Counsel for the assessee has duly demonstrated the said fact from the copy of original return of income filed before us that the assessee had duly disclosed the prior period expenses in its return of income
(P.B 10) ,had accounted for the same while computing its income originally (P.B 2) and had also paid taxes on the computed income after disallowing prior period expenses(P.B 1 & 2).
9. The Ld. DR’s case rested on the finding of the AO that the assessee had disallowed the said expenses only vide a revised computation filed during assessment proceedings. However, he was unable to dislodge the finding of fact recorded by the Ld.
CIT(A) duly corroborated by the Ld. Counsel for the assessee with evidences.
10. Moreover Ld. Counsel for the assessee has explained the contradictory findings of both the authorities to have arisen on account of incorrect figure of income punched while filing return of income, though computed correctly by the assessee by disallowing prior period expenses and paying taxes on the income
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so computed as also disclosing the taxes to be paid in the return of income correctly.
11. In the light of the above, the Ld. CIT(A) we hold has rightly held that there is no concealment / furnishing of inaccurate particulars of income and has therefore we hold rightfully deleted the penalty levied under section 271(1)(c) of the Act by the AO amounting to Rs.62,56,808/-.
12. Appeal filed by the revenue is therefore dismissed.
Order pronounced in the open court on 04.04.2025 (MADHUMITA ROY)
ACCOUNTANT MEMBER
Dated: 04.04.2025
Pooja/-