Case Law Details
Gujarat State Electricity Corporation Ltd. Vs DCIT (ITAT Ahmedabad)
During the course of assessment, the Assessing Officer has noticed that assessee has accounted interest expenses twice of Rs. 11.90 crores, therefore, the same was disallowed and also levied penalty of Rs. 1,46,48,271/- u/s. 271(1)(c) of the act on the combined amount of disallowance u/s. 14A and disallowance of interest. After perusal of the material on record, it is undisputed fact that aforesaid expenditure was twicely reflected in the annual account of the year under consideration and during the course of assessment and appellate proceedings the assessee has brought to the notice of the lower authorities that same was rectified by showing the said expenditure as prior period income in the subsequent year. The assessee has also placed copy of income tax return for assessment year 2008-09 which was filed on 30th Sep, 2008 demonstrating that the same was shown as income in the subsequent year and not in Sep, 2009 as contended by ld. Departmental Representative. In the light of the above fact and circumstances, we have also gone through judicial pronouncements referred by the ld. counsel decision of 322 ITR 158 (SC) Reliance Petro-Products Pvt. Ltd. & 348 ITR 306 (SC) Price Watercoopers Pvt. Ltd. wherein it is held merely because assessee had claimed expenditure which claim was not accepted or was not acceptable to revenue that by itself would not attract penalty u/s. 271(1)(c) of the act. We have also gone through the judicial pronouncement of Price Waterhouse Coopers (P) Ltd. wherein the Hon’ble Supreme Court held that assessee firm filed its return of income. It was a bonafide and inadvertent error. Assessee was not guilty of either furnishing inaccurate particulars or attempting to conceal its income, imposition of penalty was unjustified. In the light of the above facts and findings, we observed that assessee had accounted the provision for interest twice by mistake on which the Assessing Officer has levied penalty for furnishing inaccurate particulars of income. However, it is noticed that assessee itself shown the said expenditure as income in the subsequent assessment year 2009-10 and demonstrated from the copy of return that the same was filed on 30th Sep, 2008 before detecting the discrepancy under scrutiny assessment. Therefore, necessary correction has already been done by the assessee before detecting the mistake pointed out by the Assessing Officer in the assessment proceedings for the year under consideration. Looking to the facts and findings of judicial pronouncements as referred above, we consider that decision of ld. CIT(A) in sustaining the impugned penalty is not justified. Therefore, we direct the Assessing Officer to delete the impugned penalty. Accordingly, this appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This assessee’s appeal for A.Y. 2007-08, arises from order of the CIT(A)-1, Vadodara dated 19-05-2017, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short “the Act”.
2. The solitary ground of appeal of the assessee is directed against the decision of ld. CIT(A) in confirming the penalty levied u/s. 271(1)(c) on the addition made on account of disallowance of Rs. 11,92,00,000/- under the normal provision of the Income Tax Act.
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