MESERS KANWARSHREE BUILDCON PRIVATE LIMITED, RAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4(1), RAIPUR

ITA 146/RPR/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9970 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 139

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.146/RPR/2019 Ǔनधा[रण वष[ / Assessment Year : 2008-09 M/s. Kanwarshree Buildcon P. Ltd. Maa Annapurna Complex, Banjari Road, Gol Bazar Road, Raipur (C.G.)-492 001. PAN : AACCK6889N .......अपीलाथȸ/Appellant बनाम / V/s. The Assistant Commissioner of Income Tax-4(1), Raipur (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri G.N Singh, Sr. DR स ु नवाई कȧ तारȣख / Date of Hearing : 25.07.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 23.09.2022 2 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-II, Raipur dated 29.03.2019, which in turn arises from the order passed by the A.O under Sec 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.09.2015 for assessment year 2008-09. Before us the assessee has assailed the impugned order on the following grounds of appeal : “1. On the facts and circumstances of the case, the ld. CIT(A) has erred in sustaining the penalty of Rs.5,04,600/- imposed by the ld. AO u/s.271(1) for irregular adjustment of business loss of Rs.20,81,180/-. 2. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing.” 2. Succinctly stated, the assessee company which is engaged in the business of a builder had filed its return of income for A.Y. 2008-09 on 30.09.2018, declaring an income of Rs.15,72,640/. Original assessment was thereafter framed by the A.O vide order u/s.143(3) dated 24.12.2010 determining its income at Rs.16,47,640/-. 3 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 3. Controversy involved in the present appeal lies in a narrow compass i.e. whether or not the assessee company which had filed its return of loss for the preceding year beyond the time limit contemplated in sub-section (1) of Section 139 of the Act, having wrongly carried forward the loss for the said year to the succeeding year and adjusted the same against its income of the said later year would be liable for penalty u/s.271(1(c) of the Act? 4. Shorn of unnecessary details, the assessee company had filed its return of income for A.Y.2007-08 on 31.03.2008, declaring a loss of Rs. (-) 16,32,927/-. Although the assessee company had filed its return of income beyond the time limit contemplated under sub-section (1) to Section 139 of the Act, and thus, as per the mandate of section 80 of the Act was not entitled to carry forward and set-off such loss as against its income of the succeeding year under sub-section (1) to Section 72 of the Act, however, it had inadvertently done so. Ostensibly the assessee had carried forward the brought forward business 4 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 loss of Rs. (-) 16,32,927/- of A.Y.2007-08 to the year under consideration i.e. A.Y.2008-09 and had claimed set-off of the same against its income for the said year. Assessment was thereafter framed by the A.O u/s. 143(3), dated 24.12.2010, wherein loosing sight of the aforesaid material fact that the assessee had wrongly claimed set-off of the brought forward loss of A.Y.2007-08 the A.O allowed the same. 5. Subsequently, the A.O realizing his aforesaid mistake issued notice u/s.154 of the Act, dated 27.01.2014 and called upon the assessee to explain as to why its aforesaid adjustment of business loss may not be withdrawn. In reply the assessee did not contest the withdrawing of its claim for set-off of the aforesaid b/forward business loss of Rs. (-) 16,32,927/- (supra) as proposed by the A.O. On the contrary, the assessee vide its reply dated 28.09.2015 fairly admitted its disentitlement for claim of set-off of the aforesaid business loss of Rs. (-) 16,32,927/- (supra). Accordingly, the A.O vide his order passed u/s.154 dated 24.09.2015 disallowed the assessee’s claim for 5 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 wrong adjustment of brought forward loss of Rs.(-) 16,32,927 (supra). As the assesee had accepted the withdrawal of its claim of brought forward loss of Rs. (-) 16,32,927/- (supra), therefore, he did not carry the matter any further in appeal before the CIT(Appeals). 6. After passing the rectification order u/s 154, dated 24.09.2015 the A.O subjected the assessee to penalty for furnishing of inaccurate particulars of income u/s.271(1)(c) of Rs. 5,04,600/- i.e as regards its wrong/irregular adjustment of brought forward loss of Rs.16,32,927/. 7. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 8. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off 6 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 9. After having given thoughtful consideration to the aforesaid issue in hand, we are of the considered view that the fact that the assessee company had inadvertently carried forward the business loss of AY 2007-08 of Rs. (-) 16,32,927 (supra) to the succeeding year i.e the year under consideration cannot be ruled out. Our aforesaid conviction as regards bonafides of the assessee can safely be gathered from the fact that on being confronted with the aforesaid irregularity in its claim for set-off of the b/forward losses it had fairly admitted the same and had not assailed the consequential addition made by the A.O any further in appeal. Be that as it may, we are of the considered view that the carry forward of the business loss of the preceding year by the assessee company to the succeeding year i.e the year under consideration can to the best be held to be a mistake on its part, which though would 7 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 undeniably justify disallowance of the said claim, but by no means would render the assessee liable for penalty u/s.271(1)(c) of the Act. Our aforesaid conviction is fortified by the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC). In its aforesaid judgment the Hon’ble Apex Court had inter alia held that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. It was held by the Hon’ble Apex Court as under: “A glance at the provisions of section 271(1)(c) of the Incometax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word “particulars” used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not 8 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars.” 10. Also support is drawn from the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. Upendra V. Mithani, Income Tax Appeal (L) No.1860 of 2009, dated 05.08.2009. In its aforesaid order, it was observed by the Hon’ble High Court that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved i.e. it is not accepted but circumstances do not lead to the reasonable and positive inferences that the assessee’s case is false, then, no penalty u/s. 271(1)(C) of the Act can justifiably be imposed. Further, reliance is placed on the judgment of the Hon’ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs. CIT, Civil Appeal No.6924 of 2012 dated 25.09.2012. In its aforesaid judgment, it was observed by the Hon’ble Apex Court 9 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 that though the assessee before them ought to have been careful but the absence of due care would not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income. 11. Considering the facts involved in the present case in light of the settled position of law, in our considered view the inadvertent carry forward by the assessee company of its business loss of the preceding year i.e. A.Y.2007-08 and, seeking setting-off of the same against its income for the year under consideration cannot, on such standalone basis, i.e de hors any material which would dislodge its bonafides for doing so justify saddling it with penalty u/s.271(1)(c) for furnishing of inaccurate particulars of income. 12. We, thus, in terms of our aforesaid observations not being able to concur with the view taken by the lower authorities, set- aside the order of the CIT(Appeals) and vacate the penalty imposed by the A.O u/s. 271(1)(c) of the Act. 10 M/s. Kanwarshree Buildcon P. Ltd. Vs. ACIT-4(1) ITA No. 146/RPR/2019 13. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANTMEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 23 rd September, 2022 SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-II, Raipur (C.G) 4. The Pr. CIT-II, Raipur (C.G) 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु रबɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur.