IN INCOME TAX APPELLATE TRIBUNAL PUNE BENCH , PUNE BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . ITA No.1394 PN 2013 " Assessment Year : 2008-09 Shri Rajendra Pannalal Bora, P. Gopalgaon, Tal. Rahata, Ahmednagar PAN : AGNPB3855H . Appellant v s DCIT, Ahmednagar Circle, . Respondent Ahmednagar Appellant by : Shri Nikhil Pathak Respondent by : Shri Anil Kumar Chaware Date of Hearing :29.09.2016 Date of Pronouncement:05.10.2016 ORDER PER R.K.PANDA, AM : This appeal filed by assessee is directed against order dated 15-04-2013 of CIT(A)-I, Pune relating to Assessment Year 2008-09. 2. Although number of grounds have been taken by assessee they all relate to order of CIT(A) in confirming levy of penalty of Rs.14,08,281 - u s.271(1)(c) of I.T. Act. 2 ITA No.1394 PN 2013 3. Facts of case, in brief, are that assessee is individual and filed his return of income on 25-12-2008 declaring loss of Rs.42,45,340 -. However, assessee had paid advance tax of Rs.9,27,000 - and claimed refund of Rs.9,27,000 -. During course of assessment proceedings AO observed from computation of income that assessee had shown net profit of Rs.4,81,350 - against which assessee had claimed carry forward loss of Rs.4,81,350 -. Similarly, assessee had shown other income of Rs.96,938 - against which assessee had claimed deduction u s.80C and thereby had offered Nil income. assessee had also agricultural income of Rs.1,24,725 -which was not included in income since as per computation no income was taxable. AO observed that computation of income filed did not match with computation of income which was filed electronically. AO, therefore, asked assessee to produce books of account, bank statements etc., and also explain reasons regarding discrepancies. 4. During course of assessment proceedings assessee vide submission dated 19-11-2010 apart from other things submitted that return filed by Accountant is not correct return and it is not based on books of account. assessee prepared correct statement of total income from audited statement of accounts and stated that there is profit of Rs.4,81,350 -. assessee also filed affidavit and requested that owing to loss of audit report by Accountant mistake crept in e-return filed. There was no malafide intention to conceal or to furnish inaccurate particulars of income. It was submitted that as against loss of Rs.42,45,314 - there is positive income of Rs.4,81,350 -. 3 ITA No.1394 PN 2013 5. After considering arguments advanced by assessee AO completed assessment determining total income of Rs.4,81,350 -. Thereafter, AO initiated penalty proceedings u s.271(1)(c) of I.T. Act. Rejecting various explanations given by assessee AO levied penalty of Rs.14,08,281 - u s.271(1)(c) of I.T. Act. In appeal Ld.CIT(A) confirmed penalty levied by AO. 6. Aggrieved with such order of CIT(A) assessee is in appeal before us. 7. Ld. Counsel for assessee referring to acknowledgement of return for A.Y. 2008-09, copy of which is placed at pages 1 to 22 of paper book drew attention of Bench to Column No.1 according to which gross total income has been declared at Rs.51,35,110 -. He submitted after claiming deduction under Chapter VIA total income as per said return is shown at Rs.50,35,110 -. Again as per Column No.3 (a) assessee has claimed loss of Rs.42,45,314 -. Referring to page 43 of paper book (page 1 of assessment order) he submitted that as per said return loss as per e-return filed on 25-12-2008 is Rs.42,45,340 -. Referring to page 46 of paper book he submitted that AO has completed assessment determining total income of Rs.4,81,350 -. Referring to page 12 of paper book, which is part of return of income, he submitted that net income has been shown in return of income filed with AO is Rs.8,00,702 -. Thus, total income declared at Rs.8,00,702 - is more than income determined by AO. He submitted that assessee in instant case has filed belated return of income for which he is not 4 ITA No.1394 PN 2013 entitled to set off carry forward loss. In any case since returned income is more than assessed income AO was not justified in levying penalty of Rs.14,08,281 - u s.271(1)(c) of I.T. Act. 8. Ld. Departmental Representative on other hand heavily relied on order of CIT(A). 9. We have considered rival arguments made by both sides, perused orders of AO and CIT(A) and paper book filed on behalf of assessee. We find AO in instant case has completed assessment determining total income at Rs.4,81,350 - as against loss of Rs.42,45,340 - as per computation of income filed with return of income filed electronically. We find assessee during course of assessment proceedings filed revised computation of income according to which correct income was RS.4,81,350 -. We find AO levied penalty of Rs.14,08,281 - u s.271(1)(c) of I.T. Act on ground that assessee has furnished inaccurate particulars and concealed his particulars of income. It is submission of Ld. Counsel for assessee that as per return of income assessee had shown net profit of Rs.8,00,702 - which is more than assessed income. There was only some error in computation of income due to mistake of Accountant. However, argument now advanced by Ld. Counsel for assessee that as per e-return itself assessee has declared income of Rs.8,00,702 - and same is more than returned income and therefore provisions of section 271(1)(c) are not applicable to assessee were never taken before AO or CIT(A). AO or CIT(A) has neither seen this vital 5 ITA No.1394 PN 2013 discrepancy nor decided issue from this angle also. In view of above and in interest of justice, we deem it proper to restore matter to file of AO with direction to decide issue in light of argument advanced by assessee that returned income is more than assessed income and mistake was only in computation statement. AO shall decide issue as per fact and law after giving due opportunity of being heard to assessee. We hold and direct accordingly. grounds raised by assessee are accordingly allowed for statistical purposes. 10. In result, appeal filed by assessee is allowed for statistical purposes. Order pronounced in open court on 05-10-2016. Sd - Sd - (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Pune; " Dated : 5th October, 2016. ( )" + , Copy of Order forwarded to : 1. Appellant 2. Respondent 3. CIT(A)-I, Pune 4. CIT- I, Pune $ ' ' ( , ( , DR, 5. ITAT, Pune; 5. + Guard file. BY ORDER, $ ' True Copy - . ' ( Sr. Private Secretary ( , ITAT, Pune Rajendra Pannalal Bora v. DCIT, Ahmednagar Circle, Ahmednagar