SWADESH TEXTILES P. LTD, MUMBAI V. ITO 4(3)(4), MUMBAI

ITA 5140/MUM/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3519 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 29-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: SNEHAL J SHAH
• Keywords: Depreciation; Wrong claim; Bad and doubtful debts; Revised return; Unabsorbed depreciation
• Section: 143(3); 234B; 115JB; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5140/MUM/2015 ASSESSMENT YEAR: 2011 - 12 SWADESHI TEXTILES PVT. LTD. , 1 ST FLOOR, KAPADIA CHAMBERS, 599, JSS ROAD, CHIRA BAZAR, MUMBAI - 400002. VS. ITO - 4(3)(4), MUMBAI PAN NO. AAGCS2102Q APPELLANT RESPONDENT ASSESSEE BY : MR. S N EHAL J . SHAH, AR REVENUE BY : MR. V. JUSTIN, DR DATE OF HEARING : 22/05/2018 DATE OF PRONOUNCEMENT: 17/08/2018 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2011 - 12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 9, MUMBAI [IN SHORT CIT(A) ]AND ARISES OUT OF THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEALS FILED BY THE ASSESSEE READ AS UNDER: 1. THE CIT(A) ERRED IN CONFIRMING THE L EVY OF PENALTY OF RS.15,00,560/ - U/S. 271(1)(C) THE ACT BY THE ASSESSING OFFICER BASED ON IRRELEVANT SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 2 GROUNDS AND JUDICIAL PRONOUNCEMENTS WITHOUT CONSIDERING THE FACTUAL AND LEGAL POSITION AS STATED BY THE APPELLANT DURING THE COURSE OF HEARING. 2. THE CIT (A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF RS.15,00,560/ - BY THE ASSESSING OFFICER, THOUGH IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY U/S.271(1)(C) WAS UNJUSTIFIED AND UNWARRANTED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2011 - 12 ON 30.09.2011 DECLARING A TOTAL INCOME AT NIL , AFTER ADJUSTING BROUGHT FORWARD LOSS TO THE EXTENT OF RS.13,58,044/ - . ALSO THE ASSESSEE DECLARED INCOME U/S 115JB AT NIL , AFTER SETTING OF F BROUGHT FORWARD BOOK AND DEPRECIATION LOSSES. THE ASSESSING OFFICER (AO) ASSESSED THE INCOME AT NIL, AFTER ADJUSTING BROUGHT FORWARD LOSS OF RS.43,56,660/ - UNDER THE NORMAL PROVISIONS. ALSO INCOME U/S 115JB WAS ASSESSED AT RS.64,66,123/ - AFTER MAKING VARIOUS ADDITIONS/DISALLOWANCES TO THE BOOK PROFIT DETERMINING THE TAX LIABILITY OF RS.15,00,560/ - INCLUDING INTEREST U/S 234B OF RS.1,19,910/ - , U/S 234C OF RS.17,301/ - AND U/S 234D OF RS.1,17,435/ - . THE DISALLOWANCES MADE BY THE AO WHILE CO MPUTING BOOK PROFIT U/S 115JB ARE (I) INSTEAD OF DEDUCTING DEPRECIATION DEBITED TO THE P&L ACCOUNT, THE ASSESSEE HAS DEDUCTED DEPRECIATION AS PER INCOME TAX AND (II) WHILE COMPUTING THE BOOK PROFIT, THE ASSESSEE HAS DEDUCTED THE ENTIRE BOOK LOSS INSTEAD OF UNABSORBED DEPRECIATION OR UNABSORBED LOSS, WHICHEVER IS LESS. SINCE THE TAX PAYABLE U/S 115JB WAS MORE THAN THE NORMAL PROVISIONS OF THE ACT, THE AO COMPUTED THE TAX U/S 115JB. IN THE ASSESSMENT ORDER DATED 24.02.2014, THE AO INITIATED PENALTY SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 3 PROCEEDING S ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED BOOK PROFIT U/S 115JB WITH THE RETURN OF INCOME AND EVEN IN SUBSEQUENT SUBMISSION, THUS THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME/BOOK PROFIT. THEREAFTER, THE AO CONSIDERED THE BOOK PR OFIT COMPUTED U/S 115JB AMOUNTING TO RS.64,66,123/ - FOR LEVY OF PENALTY ON THE REASON THAT COMPUTATION OF BOOK PROFIT WAS FILED ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE SAME WAS CALLED FOR AND ALSO BECAUSE THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF SUCH INCOME. THE AO THUS LEVIED A MINIMUM PENALTY OF RS.15,00,560/ - U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) AGREED WITH THE REASONS GIVEN BY THE AO AND DISMISSED THE APPEAL. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILES A COPY OF THE WRITTEN SUBMISSION FILED BEFORE THE LD. CIT(A). WE SHALL MENTION BELOW THE SAID WRITTEN SUBMISSION. IT IS STATED THEREIN THAT THE WORKING U/S 115JB WAS FURNISHED IN THE RETURN OF INCOME. ALSO IT IS STATED THAT THERE IS NO PROVISION IN THE INCOME TAX RETURN (ITR) - 6 (APPLICABLE TO COMPANIES) WHEREBY CALCULATION U/S 115JB CAN BE ATTACHED ALONG WITH THE RETU RN OF INCOME. ALSO IT IS STATED THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS ALSO REQUIRED TO BE AUDITED U/S 44AB OF THE ACT. IT IS IN THE BUSINESS OF SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 4 TEXTILES AND AS IT DOES NOT HAVE P ROFESSIONAL OR EXPERT KNOWLEDGE IN THE SUBJECT OF TAXATION, IT HAS TO SEEK OUTSIDE PROFESSIONAL ADVICE. THE CALCULATION U/S 115JB WAS MADE BY THE CHARTERED ACCOUNTANT OF THE ASSESSEE FOR THE CAPTIONED ASSESSMENT YEAR. THE WORKING WAS NOT ONLY PREPARED BY T HE CHARTERED ACCOUNTANT BUT WAS CERTIFIED BY HIM AND REPORT ISSUED IN THE REQUISITE FORM 29B. IT IS STATED THAT THE ASSESSEE HAD TOTALLY RELIED ON THE EXPERTISE AND CERTIFICATION ISSUED BY THE CHARTERED ACCOUNTANT. IT IS ONLY AFTER THE ASSESSMENT ORDER WAS PASSED THAT THE ASSESSEE BECAME AWARE THAT THE WORKING AND THE REPORT ISSUED UNDER FORM 29B CONTAINED INADVERTENT MISTAKES MADE BY THE CHARTERED ACCOUNTANT. IN THE SAID WRITTEN SUBMISSION, IT IS MENTIONED THAT THE CHARTERED ACCOUNTANT HAD INADVERTENTLY MA DE AN ERROR IN COMPUTING BOOK PROFIT U/S 115JB AS BELOW: A. INSTEAD OF DEDUCTING THE DEPRECIATION DEBITED TO PROFIT AND LOSS ACCOUNT, HE DEDUCTED DEPRECIATION AS PER INCOME TAX. IT IS CLEARLY A CASE OF OVERSIGHT AND THEREFORE NOTHING BUT A GENUINE MISTAKE . IT IS PERTINENT TO NOTE THAT BOTH THE BOOK DEPRECIATION AND THE INCOME TAX DEPRECIATION WERE AVAILABLE IN THE SAME AUDIT REPORT ISSUED U/S 115JB AND THEREFORE, THE QUESTION OF FURNISHING INACCURATE PARTICULARS DOES NOT ARISE. B. HE HAS DEDUCTED THE ENTIRE BOOK LOSS INSTEAD OF UNABSORBED DEPRECIATION OR UNABSORBED LOSSES WHICHEVER IS LESS, WHILE COMPUTING THE BOOK PROFITS WHICH IS AGAIN NOTHING BUT AN INADVERTENT ERROR ON THE PART OF THE CHARTERED ACCOUNTANT. SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 5 5.1 THE LD. COUNSE L FILES A COPY OF THE DECISION IN PRICE WATERHOUSE COOPERS P. LTD. V. DCIT (SC) [348 ITR 306], CIT V. COMPRO TECHNOLOGIES (P.) LTD. [2015] 55 TAXMANN.COM 180 (DEL . ) , T .C.N.S. LTD. V. ACIT [ITA NO. 3069/DEL/2013], CIT V. FILTREX TECHNOLOGIES (P.) LTD. [2015] 59 TAXMANN.COM 371 (KARN . ), CIT V. DEEP TOOLS (P&H) 274 ITR 603, CIT V. DHANABAL [2009] 309 ITR 268 (DEL . ), CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (322 ITR 158) (SC), T. ASHOK PAI V. CIT 292 ITR 11 (SC), CIT V. INDUSIND BANK LTD. [2015] 55 TAXMANN .COM 406 (BOM .) , DIT V. ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW [2013] 35 TAXMANN.COM 95 (BOM . ), CIT V. SANIA MIRZA [2013] 40 TAXMANN.COM 17 (AP), CIT V. SOMANY EVERGREE KNITS LTD. 352 ITR 592 (BOM.), LEQUIDZ INDIA (P.) LTD. V. DCIT [ITA NO. 5 58/HYD/2011], CIT V. ESCORTS FINANCE LTD . 328 ITR 44 (DEL . ), UDAYAN MUKHARJEE V. CIT 291 ITR 318 (CAL . ), CIT V. BALAJI DISTILLER IE S LTD. (MAD RAS HIGH COURT ), TAX CASE (APPEAL) NO. 1985 OF 2006. 6. PER CONTRA , THE LD. DR RELIES ON THE ORDER PASSED BY THE LD. CIT(A) AND SUBMITS THAT THE COMPUTATION OF BOOK PROFIT WAS NOT FILED ALONG WITH THE RETURN OF INCOME AND THE ASSESSEE FILED IT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN ASKED TO DO SO BY THE AO. ALSO IT IS SUBMITTED BY HIM THAT INSTEAD OF DEDUCTING THE DEPRECIATION DEBITED TO THE P&L ACCOUNT, THE ASSESSEE HAS DEDUCTED DEPRECIATION AS PER THE INCOME TAX ACT. ALSO IT IS SUBMITTED THAT THE ASSESSEE, WHILE COMPUTING BOOK PROFITS, HAS DEDUCTED THE ENTIRE B OOK LOSS INSTEAD OF UNABSORBED DEPRECIATION OR UNABSORBED LOSSES, WHICHEVER IS LESS. THUS THE LD. DR SUBMITS THAT THE PENALTY OF RS.15,00,560/ - LEVIED BY THE AO U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME HAS BEEN SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 6 RIGHTLY UPHELD BY THE LD . CIT(A). IN THIS REGARD, RELIANCE IS PLACED BY HIM ON THE DECISION IN CIT V. ZOOM COMMUNICATION (P.) LTD. (2010) 191 TAXMAN 179 (DEL . ) AND SRI GOKULAM HOTELS INDIA (P.) LTD. V. ACIT (2014) 49 TAXMANN.COM 543 (MAD.) . 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. WE BEGIN WITH THE DECISIONS RELIED ON BY THE LD. COUNSEL OF THE ASSESSEE. IN PRICE WATERHOUSE COOPERS P. LTD . (SUPRA), FOR TH E AY 2000 - 01, THE ASSESSEE FILED ITS RETURN OF INCOME U/S 139(6) R.W.S. 139(6A) OF THE ACT, ACCOMPANIED BY ITS TAX AUDIT REPORT U/S 44AB AND STATEMENT OF PARTICULARS IN FORM 3CD AS REQUIRED BY RULE 6G(2) OF THE INCOME TAX RULES, 1962. EVEN THOUGH THE STATE MENT INDICATED THAT THE PROVISION TOWARDS GRATUITY WAS NOT ALLOWABLE, THE ASSESSEE CLAIMED A DEDUCTION THEREON IN ITS RETURN OF INCOME. ON THE BASIS OF THE RETURN AND THE STATEMENT, AN ASSESSMENT ORDER WAS PASSED U/S 143(3). THE AO ISSUED A NOTICE TO THE ASSESSEE FOR REOPENING THE ASSESSMENT IN RESPONSE TO WHICH THE ASSESSEE FILED ITS RETURN UNDER PROTEST AND UPON ITS REQUEST, THE ASSSESSEE WAS FURNISHED THE REASONS FOR REOPENING THE ASSESSMENT, WHICH STATED THAT PROVISION FOR GRATUITY WAS NOT ALLOWABLE U/ S 40A(7) AND WAS REQUIRED TO BE ADDED BACK, BUT IT HAD NOT BEEN ADDED BY THE ASSESSEE, THEREBY LEADING TO UNDER ASSESSMENT OF INCOME. SOON AFTER THE ASSESSEE WAS COMMUNICATED THE REASONS FOR REOPENING THE ASSESSMENT, IT REALIZED THE MISTAKE AND BY A LETTER INFORM ED THE AO THAT THERE WAS NO WILFUL SUPPRESSION OF FACTS BY THE ASSESSEE BUT THAT A GENUINE MISTAKE OR OMISSION HAD BEEN COMMITTED WHICH HAD BEEN OVERLOOKED BY THE AO SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 7 BEFORE WHOM THE TAX AUDIT REPORT WAS PLACED. THE ASSESSEE FILED A REVISED RETURN ON THE SAME DATE, A REASSESSMENT ORDER WAS PASSED ON THE SAME DATE AND THE ASSESSEE PAID THE TAX DUE WITH INTEREST. THE AO THEREAFTER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PENALTY AT 300 PER CENT OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS. THE CIT(A) UPHELD THE IMPOSITION AND THE APPELLATE TRIBUNAL ON FURTHER APPEAL REDUCED THE PENALTY TO 100% OF THE TAX SOUGHT TO BE EVADED. ON APPEAL, THE HIGH COURT AFFIRMED THE ORDER OF THE TRIBUNAL. ON F URTHER APPEAL, THE HONBLE SUPREME COURT HELD, ALLOWING THE APPEAL THAT THE FACTS OF THE CASE WERE PECULIAR AND SOMEWHAT UNIQUE. NOTWITHSTANDING THAT THE ASSESSEE WAS A REPUTED FIRM AND HAD GREAT EXPERTISE AVAILABLE WITH IT, IT WAS POSSIBLE THAT EVEN THE ASSESSEE COULD MA K E A SILLY MISTAKE. THE FACT THAT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND THAT IT UNEQUIVOCALLY STATED THAT THE PROVISION FOR PAYMENT WAS NOT ALLOWABLE UNDER SECTION 40(7) OF THE ACT INDICATED THAT THE ASSESSEE MADE A CO MPUTATION ERROR IN ITS RETURN OF INCOME. THE CONTENTS OF THE TAX AUDIT REPORT SUGGESTED THAT THERE WAS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME OR OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. APART FROM THE FACT THAT THE ASSESSEE DID NOT NOTICE THE ERROR, IT WAS NOT EVEN NOTICED EVEN BY THE ASSESSING OFFICER WHO FRAMED THE ASSESSMENT ORDER. ALL THAT HAD HAPPENED WAS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION FOR GR ATUITY TO ITS TOTAL INCOME. THE ASSESSEE SHOULD HAVE BEEN CAREFUL BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DID NOT MEAN THAT THE ASSESSEE WAS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 8 ATTEMPTING TO CONCEAL ITS INCOME. ON THE PECULIAR FACTS OF THIS CASE, THE IMPOSITION OF PENALTY ON THE ASSESSEE WAS NOT JUSTIFIED. IN COMPRO TECHNOLOGIES (P.) LTD. (SUPRA), IT IS HELD THAT WHERE THE ASSESSEES CHARTERED ACCOUNTANT COMMITTED A MISTAKE WHILE COMPUTING BOOK PROFITS U/S 115JB WHICH HE ADMITTED BY FILING A PERSONAL AFFIDAVIT, NO CASE WAS MADE OUT FOR LEVY OF PENALTY. IN T.C.N.S. LTD. (SUPRA), THE ASSESSEE - COMPANY FILED N IL INCOME AS PER NORMAL COMPUTATION OF INCOME. HOWEVER, UNDER THE PROVISIONS OF SECTION 115JB, THE ASSESSEE DISCLO SED BOOK PROFIT OF RS.1,40,83,499/ - . WHILE CALCULATING THE BOOK PROFITS, IT HAD CLAIMED DEDUCTION OF RS.31,56,838/ - U/S 80HH. ASSESSMENT WAS COMPLETED U/S 143(3) ON 20.03.2006 ASSESSING THE BOOK PROFITS AT RS.1,40,83,499/ - . THEREAFTER, A NOTICE U/S 148 WAS ISSUED SINCE THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80HHE, WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE ACT. IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE FILED INCOME TAX RETURN, WHEREIN, IT HAD DECLARED AN INCOME OF RS.1,72,40,338/ - AND DEDUCTION U/S 80H HE WAS NOT CLAIMED WHILE WORKING OUT THE BOOK PROFITS U/S 115JB. ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 148 ACCEPTING THE RETURN FILED. THEREAFTER THE AO IMPOSED A PENALTY OF RS.2,48,600/ - FOR MAKING A CLAIM OF DEDUCTION U/S 80HHE, WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE ACT. IN APPEAL , THIS PENALTY WAS UPHELD BY THE LD. CIT(A). IN FURTHER APPEAL, THE TRIBUNAL HELD THAT THE ASSESSEE HAD DECLARED SUBSTANTIAL INCOME AND TAX SOUGHT TO BE EVADED IS ONLY RS.2,78,432/ - (WHICH ALSO INCLUDES INTEREST). T HEREFORE, THE CONTENTION OF ASSESSEE THAT 80HHE DEDUCTION WAS MADE BY INADVERTENCE IS ONLY REASONABLE AND THE SAME SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 9 CANNOT BE BRUSHED ASIDE AS NOT BONAFIDE. THIS IS ALSO EVIDENT FROM THE FACT THAT THE CHARTERED ACCOUNTANT OF THE ASSESSEE HAS ALSO COMMITTED AN ERROR IN CLAIMING DEDUCTION U/S 80HHE OF THE ACT IN THE AUDIT REPORT ACCOMPANYING THE RETURN OF INCOME. THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THAT THERE IS NO WILFUL DEFAULT ON THE PART OF THE ASSESSEE IN FURNISH ING INACCURATE PARTICULARS OF INCOME WARRANTING IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. THEREFORE, THE ORDER OF THE CIT(APPEALS) CONFIRMING THE IMPO SITION OF PENALTY IS SET ASIDE. IN FILTREX TECHNOLOGIES (P.) LTD. (SUPRA) IT IS HELD THAT WHERE AS SESSEE - COMPANY MADE PAYMENT TO A FOREIGN COMPANY WITHOUT DEDUCTION OF TAX AT SOURCE ON THE BASIS OF CERTIFICATE ISSUED BY CHARTERED ACCOUNTANT, SAME WAS A BONA FIDE MISTAKE AND HENCE, ASSESSEE WAS NOT LIABLE TO PENALTY FOR CONCEALMENT OF INCOME. IN DEEP T OOLS (SUPRA), THE ASSES S EE FILED ITS RETURN OF INCOME FOR THE AY 1994 - 95. IT HAD MADE CLAIMS FOR DEDUCTION U/S 80HHC. THE AO POINTED OUT ERRORS IN THE CLAIM. THE ASSESSEE FILED A REVISED RETURN. THEN THE AO IMPOSED A PENALTY U/S 271(1)(C ). THE HONBLE HIGH COURT HELD THAT IN VI EW OF THE FINDINGS RECORDED BY THE TRIBUNAL THAT THE ERROR OF THE CHARTERED ACCOUNTANT WAS INADVERTENT AND DID NOT LACK BONA FIDES, CANCELLATION OF THE ORDER OF PENALTY WAS CLEARLY JUSTIFIED. IN DHANABAL (SUPRA) , THE ASSESSEE CLAIMED 100% DEDUCTION UPON ADVICE GIVEN BY THE CHARTERED ACCOUNTANT WHEREAS IT WAS ENTITLED ONLY TO 80%. THE HONBLE HIGH COURT HELD THAT THE CIT(A) AS WELL AS THE TRIBUNAL HAD COME TO THE CONCLUSION THAT THE EXPLANATION OFFERED BY THE SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 10 ASSESSEE WAS BONA FIDE AND THAT ALL FACTS WHI CH WERE MATERIAL TO THE COMPUTATION OF HIS INCOME HAD BEEN DISCLOSED BY THE ASSESSEE. THEREFORE, THERE WAS NO QUESTION OF ANY PENALTY BEING IMPOSABLE ON THE ASSESSEE. IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THE HONBLE SUPREME COURT HAS HELD THAT A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUN T TO FURNISHING INACCURATE PARTICULARS. IN T. ASHOK PAI (SUPRA), THE ISSUE OF ACTING ON WRONG LEGAL ADVICE AROSE FOR CONSIDERATION. T HE ASSESSEE CLAIMED THAT HIS TAX AFFAIRS WERE BEING LOOKED AFTER BY PROFESSIONAL GROUP WORKING WITH HIS BANKER. THE APPELL ATE TRIBUNAL HELD THAT THE ASSESSEES BONA FIDES WERE ESTABLISHED. IN APPEAL THE HIGH COURT HELD THAT THE PENALTY WAS RIGHTLY IMPOSED. ON APPEAL, THE HONBLE SUPREME COURT, REVERSING THE DECISION OF THE HIGH COURT HELD THAT QUESTION REFERRED TO THE HIGH C OURT WAS GENERAL IN NATURE. EXISTENCE OF MENS REA WAS ESSENTIALLY A QUESTION OF FACT. THE APPELLATE TRIBUNAL ALONE WAS THE HIGHEST AUTHORITY EMPOWERED TO DETERMINE THE QUESTION OF FACT AND THE HIGH COURT SHOULD NOT ORDINARILY DISTURB THE FINDING OF FACT. T HE FINDING OF THE APPELLATE TRIBUNAL WAS NOT PERVERSE AND THE HIGH COURT OUGHT NOT TO HAVE INTERFERED WITH THE FINDING. IN INDUSIND BANK LTD. (SUPRA) , IT IS HELD THAT WHERE REVENUE AUTHORITIES PASSED PENALTY ORDER TAKING A VIEW THAT ASSESSEE HAD RAISED A FALSE CLAIM OF DEPRECIATION, IN VIEW OF FACT THAT ASSESSEE BROUGHT ALL SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 11 RELEVANT PARTICULARS ON RECORD IN SUPPORT OF ITS CLAIM, IMPUGNED PENALTY ORDER DESERVE TO BE SET ASIDE. IN ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW (SUPRA) , IT IS HELD THAT PENALTY FOR CONCEALMENT OF INCOME, CANNOT BE LEVIED FOR CLAIM BEING REJECTED BY REVENUE, WHERE FULL DETAILS WERE DISCLOSED IN RETURN. IN MS. SANIA MIRZA (SUPRA), IT IS HELD THAT WHERE RECEIPT IN QUESTION WAS CORRECTLY MENTIONED IN RETURN O F INCOME, PENALTY U/S 271(1)(C) COULD NOT BE IMPOSED. IN SOMANY EVERGREE KNITS LTD. (SUPRA), THE TRIBUNAL HELD THAT THE EXCESS DEPRECIATION CLAIMED FOR THE AY 2003 - 04 WAS ON ACCOUNT OF BONA FIDE AND INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE. IN ANY CASE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE REALIZED ITS MISTAKE AND POINTED IT OUT. THE TRIBUNAL HELD THAT THE MISTAKE SHOULD NOT BE VISITED WITH PENALTY U/S 271(1)(C) OF THE ACT. ON APPEAL, THE HONBLE HIGH COURT HELD THAT THERE WAS N O DISPUTE THAT IT WAS A BONA FIDE MISTAKE ON THE PART OF THE ASSESSEE AND THUS, THE IMPOSITION OF PENALTY UPON THE ASSESSEE WAS NOT WARRANTED. IN L I QUIDZ INDIA (P.) LTD. (SUPRA), THE TRIBUNAL HELD THAT THE AO IS VESTED WITH A DISCRETION EITHER TO LEVY O R NOT TO LEVY PENALTY AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE. THE DISCRETION HAS TO BE EXERCISED JUDICIOUSLY AND IN AN OBJECTIVE MANNER. BEFORE IMPOSING THE PENALTY U/S 271(1)(C), IT HAS TO BE PROVED CONCLUSIVELY BY THE DEPARTMENT THAT THERE IS A DELIBERATE AND CONSCIOUS ATTEMPT ON THE PART SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 12 OF THE A SSESSEE TO CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS OF INCOME. IN ESCORTS FINANCE LTD. (SUPRA) , THE ASSESSEE CLAIMED ENTERTAINMENT EXPENSES AT 50%. THE AO REDUCED IT TO 35% AND IMPOSED PEN ALTY. THE APPELLATE AUTHORITY FOUND NO CONCEALMENT OF INCOME. IT IS HELD THEREIN THAT PENALTY CANNOT BE IMPOSED U/S 271(1)(C). IN RESPECT OF AMORTIZATION OF PRELIMINARY EXPENSES, IT IS HELD IN THE ABOVE CASE THAT EVEN IF THERE WAS NO CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS, BUT ON THE BASIS THEREOF THE CLAIM WHICH WAS MADE WAS EX FACIE BOGUS, IT WOULD ATTRACT PENALTY PROVISIONS. IN RESPECT OF CAPITAL GAINS, IN THE ABOVE CASE IT IS HELD THAT PENALTY IS NOT LEVIABLE FOR THE REASON THAT ASSESSEE MADE CORRECTION AND FILED REVISED RETURN AND OFFERED IT DURING ASSESSMENT PROCEEDINGS AND IT WAS AN INADVERTENT ERROR. IN UDAYAN MUKHARJEE (SUPRA), IT IS HELD THAT MIST AKE IN CALCULATION DOES NOT AMOUNT TO CONCEALMENT AND PENALTY CANNOT BE IMPOSED. IN BALAJI DISTILLER IE S (SUPRA), THE HONBLE HIGH COURT HELD AT PARA 20 THAT: 20. APPLYING THE EXPLANATION TO THE FACTS OF THE CASE HEREIN, WE FIND THAT THE FINDINGS OF THE TRIBUNAL ON THE ASSESSMENT WAS NOT ON THE GROUND OF TREATING THE CLAIM AS NOT BONA FIDE. WE FIND THAT THE ASSESSMENT ON THE CONSUMPTION OF BOTTLES MADE ON THE GROUND OF ALLEGED NON - EXISTENCE OF TWO FIRMS WAS REJECTED BY THE TRIBUNAL BY RENDERING A FINDING THAT THE SUPPLIERS WERE VERY MUCH IN EXISTENCE. ON THE 2% ADDITION MADE TO THE BOTTLES SENT SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 13 DIRECT TO THE FACTORY WITHOUT ENTERING INTO THE BOOKS OF ACCOUNTS AND ON THE PRICE DIFFERENCE, THE TRIBUNAL ULTIMATELY SUSTAINED THE ADDITION TO THE EXTENT OF 25%. GOING BY THE QUANTUM APPEAL ORDER, FOLLOWED IN THE ORDERS OF THE AUTHORITIES BELOW AND THE FINDINGS THUS RENDERED BY THE AUTHORITIES IN THE PENAL PROCEEDINGS, WE AGREE WITH THE ASSESSEE'S CONTENTION THAT THE ADDITIONS MADE WERE NOT IN RESPECT OF LACK OF B ONA FIDES, BUT ON THE CIRCUMSTANCES STATED IN THE ORDER OF THE TRIBUNAL. 7.1 NOW WE TURN TO THE DECISIONS RELIED ON BY THE LD. DR. IN ZOOM COMMUNICATIONS (P.) LTD. (SUPRA) , IT IS HELD THAT IF THE ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW, BUT IS ALSO WHOLLY WITHOUT ANY BASIS AND EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE, EXPLANATION 1 TO SECTION 271(1)(C) WOULD COME INT O PLAY AND ASSE SSEE WILL BE LIABLE FOR PENALTY. IN SRI GOKULAM HOTELS INDIA (P.) LTD. (SUPRA), THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY 2007 - 08 DISCLOSING NIL INCOME. THE ASSESSEE ADMITTED INCOME FROM BUSINESS FOR THAT ASSE SSMENT YEAR AT RS.1 ,51,92,970/ - AND THE SAME WAS SET OFF WITH CARRIED FORWARD LOSS OF THE EARLIER YEARS. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED. IN THE COURSE OF THE SCRUTINY PROCEEDINGS, THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS LIABLE TO PAY MAT U/S 115 JB OF THE ACT. THE ADJUSTED BOOK PROFIT FOR WORKING OUT THE MAT PAYABLE UNDER SECTION 115JB WAS CALCULATED BY THE AO AS HEREUNDER: 'NET PROFIT AS PER PROFIT & LOSS A/C 13799075 ADD: PROVISION FOR BAD AND DOUBTFUL DEBTS 254910 14053985 SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 14 LESS: PROVISION FOR FRINGE BENEFIT TAX 44795 14009190 LESS: CARRIED FORWARD LOSS ASST YR.2002 - 03 2147324 CARRIED FORWARD LOSS ASST YR.2003 - 04 2884699 5032023 8977166 THEREAFTER PROCEEDINGS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WAS INITIATED FOR THE FAILURE OF THE ASSESSEE TO COMPUTE THE BOOK PROFIT AND THE MAT PAYABLE UNDER SECTION 115 JB OF THE ACT. THE AO WAS OF THE VIEW THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY HE LEVIE D A PENALTY OF RS.10,07,238/ - U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO, BY ORDER DATED 27.02.2012 ACCEPTED THE PLEA OF THE ASSESSEE AND ALLOWED THE APPEAL. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL CONTENDING THAT PENALTY IS LIABLE TO BE IMPOSED IN TERMS OF SECTION 271(1)(C) OF THE ACT, AS THE ASSESSEE FAILED TO COMPUTE THE BOOK PROFIT AND TAX PAYABLE U/S 115JB OF THE ACT. THE TRIBUNAL , BY ORDER DATED 31.7.2013, ACCEPTING THE SUBMISSIONS OF THE R EVENUE, PARTLY ALLOWED THE APPEAL HOLDING THAT THE ASSESSEE FAILED TO MAKE PROPER COMPUTATION AND THEREFORE PENALTY WAS RIGHTLY IMPOSED BY THE AO . IN THE ABOVE DECISION, THE HONBLE HIGH COURT A GREEING WITH THE ORDER OF THE TRIBUNAL, HELD AS UNDER : SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 15 THE TRIBUNAL, IN PARAGRAPH 8 OF THE ORDER HELD THAT THERE WAS NO DISPUTE THAT THE ASSESSEE HAD NOT MADE ANY COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT, WHILE FILING ITS RET URN OF INCOME. IT IS THE ASSESSING OFFICER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, FOUND OUT THAT THE ASSESSEE HAD REPORTED HIGHER CARRIED FORWARD LOSS AND THEREBY FILED 'NIL' RETURN. THE FINDINGS OF THE TRIBUNAL IN PARAGRAPH NO.8 WITH REGARD TO FURNISHI NG OF INACCURATE PARTICULARS WILL BE RELEVANT FOR CLARITY ON THIS ISSUE, WHICH READS AS FOLLOWS: '8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE HAD NOT MADE ANY COMPUTATION OF BOOK PROFIT UNDER SECTION 115 JB OF THE ACT, WHILE FILING ITS RETURN OF INCOME. ASSESSING OFFICER HAD FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO REPORT THE BOOK PROFIT AND MADE A WORK - OUT THEREOF HIMSELF. ASSESSEE, BY ITS LETTER DATED 17.2.2012, ADDRESSED TO THE CIT(APPEALS), HAD ADMITTED THAT THE AMOUNT OF DEPRECIATION /LOSS AVAILABLE FOR SET - OFF AGAINST BOOK PROFIT, WAS AT THE BEST RS.60,81,430/ - FOR ASSESSMENT YEAR 2002 - 03 AND RS.28,84,699/ - FOR ASSESSMENT YEAR 2003 - 04. WITH REGARD TO THE BROUGHT FORWARD LOSS FOR ASSESSMENT YEAR 2003 - 04, THERE IS NO DIFFERENCE BETWEEN THE WORK - OUT FURNISHED BY THE ASSESSEE AND THE ASSESSING OFFICER. THE DIFFERENCE PERTAINS ONLY TO THE BROUGHT FORWARD LOSS OF ASSESSMENT YEAR 2002 - 03. WHILE ASSESSEE'S CALCULATIONS SHOW THE AMOUNT AS RS.60,81,430/ - , ASSESSING OFFICER HAD CONSIDERED RS.21,4 7,324/ - . EVEN IF WE PRESUME ASSESSEE TO BE CORRECT, THE AGGREGATE AMOUNT OF BROUGHT FORWARD LOSS/DEPRECIATION AVAILABLE FOR A SET - OFF WILL NOT BE MORE THAN RS.89,66,129/ - . ADMITTEDLY, THE NET PROFIT AS PER THE P & L ACCOUNT CAME TO RS.1,37,99,075/ - . THUS, VIEWED FROM ANY ANGLE, ASSESSEE WAS LIABLE TO MINIMUM ALTERNATE TAX. ASSESSEE HAD FAILED TO FURNISH A COMPUTATION OF ITS BOOK PROFIT IN ITS RETURN OF INCOME. BUT FOR THE VIGILANT ATTITUDE OF THE AO, THIS WOULD HAVE BEEN SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 16 MISSED OUT ALTOGETHER. THERE WAS DEF INITELY A FAILURE ON THE PART OF THE ASSESSEE TO FURNISH PARTICULARS NECESSARY FOR ITS ASSESSMENT. RIGOURS OF SECTION 271(1)(C) WAS ATTRACTED.' 8. IN THE LIGHT OF THE ABOVE, THE FINDINGS OF THE TRIBUNAL THAT IN AN ADMITTED CASE OF 'NIL' RETURN, WITHOUT COM PLYING WITH THE PROVISIONS OF SECTION 115 JB OF THE INCOME TAX ACT, WHERE THE ASSESSEE IS LIABLE TO PAY MAT AND THE NON - COMPLIANCE THERE OF RESULTS IN IMPOSITION OF PENALTY IN TERMS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, IS CORRECT. THE TRIBUNAL ALSO FOUND THAT ONLY ON ACCOUNT OF THE ASSESSING OFFICER'S ENDEAVOUR, THE MAT LIABILITY CAME TO BE NOTICED. THEREFORE, THERE WAS A CLEAR CASE OF THE ASSESSEE FAILING TO FURNISH PARTICULARS NECESSARY FOR THE ASSESSMENT AND THE CASE OF THE DEPARTMENT THAT THE ASS ESSEE HAS FURNISHED INACCURATE PARTICULARS FOR THE PURPOSE OF DETERMINING THE TAX UNDER SECTION 115 JB STANDS ESTABLISHED. AS A RESULT, PENALTY HAS TO BE LEVIED AS PER THE PROVISIONS OF SECTION 271(1)(C) AND THE ASSESSING OFFICER WAS JUSTIFIED IN IMPOSING SUCH PENALTY. HENCE, THE FINDINGS OF THE TRIBUNAL CONFIRMING THE ORDER OF THE ASSESSING OFFICER AND REVERSING THE ORDER OF THE FIRST APPELLATE AUTHORITY IS CORRECT. 9. THE ISSUE IN THE PRESENT APPEAL IS ONLY RELATES TO THE PENALTY IMPOSED UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT, WHICH WE FIND IS JUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IN VIEW OF THE ABOVE, WE FIND THAT THE ISSUE DECIDED BY THE TRIBUNAL ON THE BASIS OF THE ADMITTED CASE OF THE ASSESSEE BY FILING 'NIL' RETURN WHEN THEY ARE LIABLE TO PAY MINIMUM ALTERNATE TAX IS CORRECT. HENCE, THE PROVISIONS OF SECTION 271(1)(C) GETS ATTRACTED. 7.2 IN THE INSTANT CASE, THE ASSESSEE HAS NOT SHOWN ANY TAX PAYABLE U/S 115 JB. WE MAY REFER HERE TO THE SAID INCOME TAX RETURN PLACED AT PAGE 40 - 61 OF THE PAPER BOOK ( P/B ) FILED BY THE ASSESSEE . AT PAGE 48 OF THE P/B IS COMPUTATION OF TAX LIABILITY ON TOTAL INCOME AND UNDER IT I S THE COLUMN INDICATING TAX PAYABLE ON DEEMED TOTAL INCOME U/S 115JB (7 OF SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 17 SCHEDULE MAT). ALSO WE REFE R TO T HE FORM NO. 29B [RULE 40B], THE REPORT U/S 115JB OF THE ACT FOR COMPUTING THE BOOK PROFITS OF THE COMPANY , AT PAGE 62 OF THE P/B. THE FACT REMAINS THAT THE NET PROFIT ACCORDING TO THE P&L ACCOUNT COMES TO RS.64,10,620/ - . AS PER THE ADJUSTMENT TO NET PROFIT TO CONVERT IT INTO BOOK PROFIT, THE NET PROFIT AS SHOWN IN THE P&L ACCOUNT IS TO BE REDUCED INTER - ALIA BY (I) DEPRECIATION DEBITED TO P&L ACCOUNT AND (II) AMOUNT OF LOSS (BEFORE DEPRECIATION) BROUGHT FORWARD OR UNABSORBED DEPRECIATION, WHICHEVER IS LESS, AS PER BOOKS OF ACCOUNTS. IN THE INSTANT CASE, INSTEAD OF DEDUCTING DEPRECIATION DEBITED TO THE P&L ACCOUNT, THE ASSESSEE HAS DEDUCTED DEPRECIATION AS PER THE INCOME TAX ACT. ALSO THE ASSESSEE HAS DEDUCTED THE ENTIRE BOOK LOSS INSTEAD OF UNABSORBED DEPRECIATION OR UNABSORBED LOSS, WHICHEVER IS LESS, WHILE COMPUTING THE BOOK PROFITS. 7.3 BECAUSE OF THE ABOVE FACTS, T HE PRESENT CASE OF THE ASSESSEE IS DISTINGUISHABLE FROM THE CASE LAW S REFERRED AND FILED BY THE LEARNED COUNSEL WHICH HAVE BEEN NARRATED AT PARA 7 HEREINBEFORE . IN PADMASUNDRA RAO V. STATE OF TN 255 ITR 147 (SC ); CIT V. RAM NARAIN 227 ITR 401; GOVT. OF INDIA V. JAGADISH 221 ITR 338, IT HAS BEEN HELD THAT RELIANCE SHOULD NOT BE PLACED ON A DECISION WITHOUT DISCUSSING HOW THE FACTUAL SITUATION FITS IN WITH THE FACTUAL SITUATION OF THE DECISION ON WHICH RELIANCE IS PLACED. THAT CIRCUMSTANTIAL FLEXIBILITY, E.G. ONE ADDITIONAL OR DIFFERENT FACT, MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS IN TWO CASES. IN PADMAUSUNDARA RAO , THE HO NBLE SUPREME COURT HELD: SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 18 COURTS SHOULD NOT PLACE RELIANCE ON DECISIONS WITHOUT DISCUSSING AS TO HOW THE FACTUAL SITUATION FITS IN WITH THE FACT SITUATION OF THE DECISION ON WHICH RELIANCE IS PLACED. THERE IS ALWAYS PERIL IN TREATING THE WORDS OF A SPEECH OR JUDGMENT AS THOUGH THEY ARE WORDS IN A LEGISLATIVE ENACTMENT, AND IT IS TO BE REMEMBERED THAT JUDICIAL UTTERANCES ARE MADE IN THE SETTING OF THE FACTS OF A PARTICULAR CASE, SAID LORD MORRIS IN HERRINGTON VS. BRITISH RAILWAYS BOARD (1972) 2 WLR 537.CIRC UMSTANTIAL FLEXIBILITY, ONE ADDITIONAL OR DIFFERENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS IN TWO CASES. 7.4 WE ARE AWARE OF THE FACT THAT THE PENALTY IN THE INSTANT CASE HAS BEEN IMPOSED IN RESPECT OF RESULTANT INCOME AFTER DISALLOWANCES MADE IN BOOK PROFIT U/S 115JB AND NOT AFTER ADDITIONS/DISALLOWANCES MADE IN ASSESSMENT UNDER NORMAL PROCEDURE. THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SRI GOKULAM HOTELS INDIA (P.) LTD. (SUPRA) SQUARELY APPLIES TO THE PRESENT CASE. A FORTIORI , IN THE INSTANT CASE, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME U/S 115 JB OF THE ACT. 7.5 IN UOI V. DHARMENDRA TEXTILE PROCESSORS (2008) 166 TAXMAN 65 (SC), THE HONBLE SUPREME COURT HAS HELD THAT PENALTY U/S 271(1)(C) IS A CIV IL LIABILITY AND FOR ATTRACTING SUCH CIVIL LIABILITY, WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENTS AS IS CASE IN MATTER OF PROSECUTION U/S 276C. 7 .6 IT IS THE CONTENTION OF THE LD. COUNSEL, WITHOUT PREJUDICE TO THE OTHER SUBMISSIONS MADE BY HIM THAT THE AO HAS LEVIED PENALTY OF RS.15,00,564/ - ON TOTAL LIABILITY PAYABLE, WHICH IS INCORRECT. IT IS STATED THAT PENALTY CAN BE LEVIED ONLY ON THE AMOUNT OF TAX SOUGHT TO BE EVADED WHICH IS NOTHING BUT THE BASIC TAX LIABILITY INCLUDING SURCHARGE AND EDUCATIO N CESS I.E. RS.11,98,918/ - . SWADESHI TEXTILES PVT. LTD. ITA NO. 5140/MUM/2015 19 AS PER THE PROVISIONS OF THE ACT, THE PENALTY IS TO BE CALCULATED BY REFERENCE TO THE TAX ASSESSED. THUS WE AGREE WITH THE ARGUMENT OF THE LD. COUNSEL AND DIRECT THE AO TO RESTRICT THE PENALTY TO RS.11,98,918/ - IN PLACE OF RS.15,00,560/ - COMPUTED BY HIM. WE ALSO WANT TO MAKE IT CLEAR THAT ALL THE CASES RELIED ON BY BOTH THE SIDES HAVE BEEN DULY TAKEN INTO CONSIDERATION WHILE DECIDING THE MATTER. THE OMISSION OF REFERENCE TO SOME OF SUC H CASES IN THE ORDER IS EITHER DUE TO THEIR IRRELEVANCE OR TO EASE THE ORDER FROM THE BURDEN OF THE REPETITIVE RATIO DECIDENDI LAID DOWN IN SUCH DECISIONS. 8. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 17/08/2018. SD/ - SD/ - ( JOGINDER SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 17/08/2018 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI