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Income Tax Appellate Tribunal, BENCH “I”,MUMBAI
Before: SHRI D.KARUNAKARA RAO & SHRI PAWAN SINGH
Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. This appeal by assessee filed u/s 253 of the Income-tax Act (‘Act’) is directed against the order of Ld. Commissioner of Income-tax (Appeals) [for short ‘the CIT(A)] –22, Mumbai dated 20.01.2015 for Assessment Year (AY) 2010-11. Though, the Revenue has raised as many as three Grounds of appeal
, however, as per our considered opinion, the only substantial ground of appeal is “whether the ld. CIT(A) erred in deleting the penalty levied u/s. 271(1)(c) of the Act”.
2. Brief facts of the case are that the assessee-company is engaged in the business of manufacturing and selling of hard boiled sugar confectionery and toffees, filed its return of income for relevant AY on 11.10.2010 declaring total loss of Rs. 7,05,97,819/-. The assessment was completed u/s 143(3) of the Act on 14.12.2011. In the assessment, the Assessing Officer (AO) made the various addition/disallowance consisting (i) unpaid liability of Rs. 12,45,053/- (ii) bad-debts of Rs. 30,00,000/- (iii) Pooja Expenses of Rs. 1,65,460/- and (iv) income un-reconciled with Form-26AS of Rs. 98,205/-. After completion of assessment order, the AO issued show-cause notice 2 M/s. Nutrine Confectionery Co. Ltd. dated 27.10.2011 for initiating the penalty proceeding u/s 274 r.w.s. 271(1)(c) of the Act. The assessee contested the penalty proceeding and filed its reply dated 26.06.2013 contending therein that disallowance in the assessment order are very small and routine disallowance and do not tantamount to concealment or furnishing of inaccurate particulars. The assessee further relied upon the decision of Hon’ble Supreme Court in CIT vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158. The perse assessee submitted that the disallowance does not amount to concealment/furnishing of inaccurate particulars of income. The contention of assessee was not accepted by AO and levied the minimum penalty @ 100% of the income sought to be evaded. The penalty was worked out at Rs. 15,32,513/- vide its order dated 28.06.2013. On appeal by assessee, the penalty was deleted by ld. CIT(A). Thus, further aggrieved by the order of ld. CIT(A), the Revenue has filed the present appeal before us.
3. None appeared on behalf of assessee before us when the case came up for hearing on 01.12.2016 despite waiting for sufficient time. From the record, we have noticed that the assessee was duly served by the notice of hearing of appeal on 10.04.2015. As none-appeared before us despite waiting for sufficient time, we left no option except to proceed further and to hear the submission of ld. DR for Revenue. The ld. DR for Revenue argued that in the assessment, the AO made the disallowance of unpaid liability of Rs. 12,45,053/-, bad-debts of Rs. 30,00,000/-, Pooja Expenses of Rs. 1,65,460/- and income un-reconciled as per AIR of Rs. 98,205/- and the AO levied the minimum penalty for furnishing inaccurate particulars of income. It was further argued by the ld. DR for Revenue that the ratio of decision of Hon’ble Supreme Court in case of CIT vs. Reliance Petroproducts (supra) is not applicable on the fact of the present case. On our specific query with regard to the further appeal, if any filed by assessee in quantum assessment before the First Appellate Authority or Tribunal. The ld. DR for the Revenue fairly conceded that he is unaware, if any further appeal was filed by the assessee in the quantum assessment or not.
4. We have considered the rival contention of the parties and gone through the order of authorities below. We have seen that the AO made various disallowance as referred above. We further noticed that the disallowances were made by AO from the various claim by the assessee in his return of income. The AO made the disallowance on the 3 M/s. Nutrine Confectionery Co. Ltd. basis of information disclosed and the document filed in support of return of income. The ld. CIT(A) while appreciating the facts and the contention raised before him regarding various disallowance observed that (i) unpaid liability, the assessee had himself informed the AO that this amount is with regard to bonus and leave encasement of Rs. 22,19,158/- discussed in the Audit Report in the return of income erroneously added Rs. 9,74,105/- instead of Rs. 22,19,158/-. The assessee himself informed the AO and offered the balance amount during the assessment proceeding. Hence, the assessee had not concealed any income nor filed inaccurate particular of income. For second disallowance/issue for Pooja Expenses, the AO has not pointed out whether there was any concealment or inaccurate particular. Moreover, we have seen that assessee had claimed an amount of Rs. 2,21,566/- on account of Pooja Expenses and made suo moto disallowance of Rs. 56,106/-. The AO further disallowed the remaining balance amount of Rs. 1,65,460/-. Thus, there is no concealment or inaccurate particular. With regard to the disallowance of bad-debts, the ld. CIT(A) observed that issue of bad-debts is a debatable issue, and relying upon the decision of Hon’ble Supreme Court in TRF Ltd. Vs. CIT 323 ITR 397. And with regard to fourth issue regarding Non-reconciliation of ITS details, the ld. CIT(A) observed that it was a mistake of Andhra Bank and interest does not pertains to the assessee and the assessee cannot be penalized for the mistake in Form-26AS of third party and granted the relief on the basis of decision of Hon’ble Supreme Court in case of Reliance Petroproducts Pvt. Ltd. (supra). We find that the ld. CIT(A) passed a reasoned order after considering the entire fact and various decision of Hon’ble Apex Court and does not require any interference at our end.
In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on this 9th December, 2016. Sd/- Sd/- (D.KARUNAKARA RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 09/12/2016 S.K.PS Copy of the Order forwarded to :
1. 1. The Appellant 2. The Respondent.
3. The CIT(A), Mumbai.