ACIT Vs Thermax Limited (ITAT Pune)
Revenue has not doubted the genuinity of the return filed by the assessee and has not said that the particular of expenses claimed in the return were not correct. The expenses were claimed and quantum additions have been upheld by the Tribunal. However, in the separate proceedings of penalty u/s.271(1)(c) of the Act when the Revenue has accepted the return of the assessee and has not brought on record any material to show that whatever stated in the return is incorrect or inaccurate, in such scenario, there is no question of imposing penalty under the said provision. The legal principle follows once the quantum addition has been deleted, penalty u/s.271(1)(c) of the Act has no legs to stand.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal preferred by the Revenue emanates from the order of the Ld. CIT(Appeals)-6, Pune dated 01.02.2017 for the assessment year 2009-10 as per the following grounds of appeal on record:
“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the penalty levied u/s.271(1)(c) of the I.T. Act in respect of addition made on account of prior period expenses when when CIT(A) himself upheld the action of the AO in respect of the quantum addition?
2. “Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the penalty levied u/s.271(1)(c) of the I.T. Act in respect of addition made on account of commission expenses when CIT(A) himself upheld the action of the AO in respect of the quantum addition?
3. “Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the penalty levied u/s.271(1)(c) of the I.T. Act in respect of disallowance of foreign exchange loss when when CIT(A) himself upheld the action of the AO in respect of the quantum addition?
4. “Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the penalty levied u/s.271(1)(c) of the I.T. Act in respect of disallowance made on account of professional expenses when when CIT(A) himself upheld the action of the AO in respect of 50% of the quantum addition?
5. The appellant craves leave to add, amend or alter any of the above grounds of appeal.”
2. The brief facts of the case are that the assessee company is engaged in the business of manufacturing and selling of steam boilers, heat exchangers, water treatment plant, water treatment resins, water treatment chemicals, carbon and metal film resistors related accessories and treasury operations. It is also engaged in trading in various items. The assessee filed his return of income for the assessment year 2009-10 declaring total income of Rs.3,70,78,639/-. Thereafter, the assessee filed revised return of income on 01.03.2010 declaring total income of Rs.3,69,13,43,639/-. The Assessing Officer passed assessment order u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) on 27.12.2010 determining total income at Rs.4,36,27,51,620/-. In the assessment order, the Assessing Officer made number of additions on various issues. Penalty u/s.271(1)(c) of the Act has been on the amounts in respect of additions made as under:
