ASHWIN RAMESH SAKSENA,MUMBAI vs. INCOME TAX OFFICER, WARD 16(1)(1), MUMBAI, MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE HON’BLESHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 1662/MUM/2026 िनधा�रणवष�/Assmt. Year:2012-13) Permanent Account Number: ALIPS6354E ASHWIN RAMESH SAKSENA ITO WARD 16(1)(1) 1002, GREEN VIEW TOWER AAYAKAR BHAWAN, SHANTINIKETA, AIR INDIA COLONY, YARI RD, MUMBAI, MAHARASHTRA Vs. ANDHERI(W), MUMBAI 400020 MAHARASHTRA, 400061 (अपीलाथ�Appellant) (��थ�Respondent)

िनधा�रती�ारा/Assessee represented by: Shri Surendra Tiwari, C.A. राज� व�ारा/Revenue represented by: Shri Surendra Mohan, Sr. DR

सुनवाईकीतारीख/Date of conclusion of hearing: 06.05.2026 घोषणाकीतारीख/Date of pronouncement: 03.08.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of ld. Commissioner of Income Tax (Appeal) / National Faceless Appeal Centre, Delhi, vide DIN: ITBA/NFAC/S/250/2025-26/1084922389(1) dated 19.01.2026, passed against the penalty order by the Assessment Unit of the Income-tax Department u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 17.09.2025,for the Assessment Year 2012-13. 1

i. The learned CIT(A) erred in law and on facts in confirming penalty of The learned CIT(A) erred in law and on facts in confirming penalty of The learned CIT(A) erred in law and on facts in confirming penalty of Rs. 10,48,200 levied u/s 271(1)(c), which is bad in law and liable to be Rs. 10,48,200 levied u/s 271(1)(c), which is bad in law and liable to be Rs. 10,48,200 levied u/s 271(1)(c), which is bad in law and liable to be deleted. ii. The learned CIT(A) failed to appreciate that penalty has been levied The learned CIT(A) failed to appreciate that penalty has been levied The learned CIT(A) failed to appreciate that penalty has been levied merely on the basis of additions/disallowances in the set merely on the basis of additions/disallowances in the set merely on the basis of additions/disallowances in the set-aside assessment, inter alia (i) disallowance of professional fees of Rs. assessment, inter alia (i) disallowance of professional fees of Rs. assessment, inter alia (i) disallowance of professional fees of Rs. 3,85,000 and (ii) disallowance u/s 40(a)(ia) of Rs. 17, 3,85,000 and (ii) disallowance u/s 40(a)(ia) of Rs. 17, 3,85,000 and (ii) disallowance u/s 40(a)(ia) of Rs. 17,13,766 (alleged TDS default u/s 194(J), and that such disallowance do not TDS default u/s 194(J), and that such disallowance do not TDS default u/s 194(J), and that such disallowance do not automatically warrant penalty u/s 271(1)(c). automatically warrant penalty u/s 271(1)(c). iii. The learned CIT(A) erred in holding that the appellant furnished The learned CIT(A) erred in holding that the appellant furnished The learned CIT(A) erred in holding that the appellant furnished inaccurate particulars, without establishing any concealment of income inaccurate particulars, without establishing any concealment of income inaccurate particulars, without establishing any concealment of income or furnishing of inaccurate particulars as required under section or furnishing of inaccurate particulars as required under section or furnishing of inaccurate particulars as required under section 271(1)(c). iv. Without prejudice, the learned CIT(A) erred in not appreciating that a Without prejudice, the learned CIT(A) erred in not appreciating that a Without prejudice, the learned CIT(A) erred in not appreciating that a mere rejection of a claim or a statutory disallowance does not ipso mere rejection of a claim or a statutory disallowance does not ipso mere rejection of a claim or a statutory disallowance does not ipso facto lead to penalty; the penalty facto lead to penalty; the penalty proceedings require independent proceedings require independent satisfaction. satisfaction. v. Without prejudice, the learned CIT(A) erred in disregarding the Without prejudice, the learned CIT(A) erred in disregarding the Without prejudice, the learned CIT(A) erred in disregarding the appellant's bona fide explanation and in treating the matter as one of appellant's bona fide explanation and in treating the matter as one of appellant's bona fide explanation and in treating the matter as one of deliberate concealment despite the facts being on record. deliberate concealment despite the facts being on record. deliberate concealment despite the facts being on record. 3. Brief facts of the case as culled out from the records are that the case as culled out from the records are that the case as culled out from the records are that assessee is a professional who had not filed his return of income u/s assessee is a professional who had not filed his return of income u/s assessee is a professional who had not filed his return of income u/s 139(1) for the year under consideration. Subsequently, based on 139(1) for the year under consideration. Subsequently, based on 139(1) for the year under consideration. Subsequently, based on information received as per information received as per Individual Transaction Statement Individual Transaction Statement/AIR information about his receipt of professional/technical fees tion about his receipt of professional/technical fees tion about his receipt of professional/technical fees, the case was taken up by initiating proceedings u/s 148 r.w.s. 147. Assessee was taken up by initiating proceedings u/s 148 r.w.s. 147. Assessee was taken up by initiating proceedings u/s 148 r.w.s. 147. Assessee did not file his return of income in response to notice issued u/s 148 did not file his return of income in response to notice issued u/s 148 did not file his return of income in response to notice issued u/s 148. Assessment was completed u/s 144 r.w.s. 147vide order ssessment was completed u/s 144 r.w.s. 147vide order ssessment was completed u/s 144 r.w.s. 147vide order dated 16.11.2018 with total income assessed at Rs. 87,28,130 16.11.2018 with total income assessed at Rs. 87,28,130 16.11.2018 with total income assessed at Rs. 87,28,130/-. Matter went up before the Tribunal in appeal vide ITA No. 2233/M went up before the Tribunal in appeal vide ITA No. 2233/M went up before the Tribunal in appeal vide ITA No. 2233/Mum/2023, order dated 25.10.2023 whereby the order dated 25.10.2023 whereby the Co-ordinate Bench restored the ordinate Bench restored the matter back to the file of ld. A.O. for matter back to the file of ld. A.O. for de novo asses assessment. In the intervening period, assessee filed his return of income on 28.03.2019 assessee filed his return of income on 28.03.2019 assessee filed his return of income on 28.03.2019 by reporting total income at Rs. 17 by reporting total income at Rs. 17,86,790/-,even though the even though the assessment order had been passed much earlier i.e. on 16.11.2018. assessment order had been passed much earlier i.e. on 16.11.2018. assessment order had been passed much earlier i.e. on 16.11.2018.

(i) disallowance of professional fees (i) disallowance of professional fees – Rs. 3,85,000 Rs. 3,85,000/-

(ii) disallowance u/s 40( (ii) disallowance u/s 40(a)(ia) – Rs. 17,13,766/-

Sr. No. Name of the Party Name of the Party Amount Received (Rs.) (Rs.) TDS 1 Viacom 18 Media Pvt Ltd Viacom 18 Media Pvt Ltd 1,86,407 1,86,407 18,641 2 SOL Production Pvt Ltd SOL Production Pvt Ltd 60,66,500 60,66,500 6,06,650 3 The Walt Disney Company The Walt Disney Company 20,84,107 20,84,107 2,08,411 (India) Pvt Ltd (India) Pvt Ltd Total 83,37,014 83,37,014 8,33,702

6.1. Against the above receipt the above receipts, assessee claimed expenditure towards assessee claimed expenditure towards payment of professional fees which was debited to the profit and loss payment of professional fees which was debited to the profit and loss payment of professional fees which was debited to the profit and loss account, amounting to Rs 60,97,552 amounting to Rs 60,97,552/-, details of which are tabulated details of which are tabulated below: Sr. No. Name of the Party Name of the Party Amount received TDS 1 Words Infocom Pvt Ltd Words Infocom Pvt Ltd 35,55,762 35,55,762 - 2 Kaarmic Move Kaarmic Move 3,00,000 3,00,000 - 3 Sanjeet N Das Sanjeet N Das 15,00,000 15,00,000 - 4 Karun Dutta Karun Dutta 25,000 25,000 - 5 Sunayana Sarkar Dasgupta Sunayana Sarkar Dasgupta 35,000 35,000 - 6 Sonal Enterprises Sonal Enterprises 6,31,790 6,31,790 - 7 Russell Creado Russell Creado 50,000 50,000 - Total 60,97,552 60,97,552

6.2. The additions The additions sustained in the impugned assessment relates to sustained in the impugned assessment relates to parties listed at Sl. No. 2, 5 listed at Sl. No. 2, 5 and 7.

7.1. From the above, it is noted that the said party provided a loan of From the above, it is noted that the said party provided a loan of From the above, it is noted that the said party provided a loan of Rs 3 lacs to the assessee on 31.05.2011 which was repaid by the Rs 3 lacs to the assessee on 31.05.2011 which was repaid by the Rs 3 lacs to the assessee on 31.05.2011 which was repaid by the assessee on 20.10.2011 though assessee had claimed the repayment on 20.10.2011 though assessee had claimed the repayment on 20.10.2011 though assessee had claimed the repayment of loan as professional fees of loan as professional fees, depicting it as an expenditure as an expenditure in his profit and loss account.This entire chain and loss account.This entire chain of transaction took place within the transaction took place within the relevant year under consideration relevant year under consideration.We note that if the repayment made e note that if the repayment made by the assessee towards the said loan amount by the assessee towards the said loan amount is accounted is accounted as an expenditure by way of debit to profi by way of debit to profit and loss account, t and loss account, then the corresponding credit o corresponding credit of receipt of the said amount would be forming receipt of the said amount would be forming part of the professional receipts credited to the same profit and loss part of the professional receipts credited to the same profit and loss part of the professional receipts credited to the same profit and loss account. Hence, the transaction between the assessee and this party is account. Hence, the transaction between the assessee and this party is account. Hence, the transaction between the assessee and this party is a revenue neutral transaction. transaction.

7.2. Ld. AO has disallowed the claim of assessee by considering that AO has disallowed the claim of assessee by considering that AO has disallowed the claim of assessee by considering that it is a transaction on capita it is a transaction on capital account being a loan received by the account being a loan received by the assessee and subsequently repaid. He has not disputed on the said assessee and subsequently repaid. He has not disputed on the said assessee and subsequently repaid. He has not disputed on the said transaction to taint it as unexplained transaction to taint it as unexplained cash credit. Since, this aspect of cash credit. Since, this aspect of the issue has attained finality the issue has attained finality, there would not be any occasion for the there would not be any occasion for the assessee requiring him to do TDS on this specific transaction and assessee requiring him to do TDS on this specific transaction and assessee requiring him to do TDS on this specific transaction and therefore, there cannot be a disallowance to this effect u/s 40(a)(ia) on there cannot be a disallowance to this effect u/s 40(a)(ia) on there cannot be a disallowance to this effect u/s 40(a)(ia) on this amount. This particular transaction is therefore his particular transaction is therefore, ruled out for the purpose of imposition of penalty in the present case before us. purpose of imposition of penalty in the present case before us. purpose of imposition of penalty in the present case before us.

7.3. In respect of the other two parties i.e. Sunayana Sarkar In respect of the other two parties i.e. Sunayana Sarkar In respect of the other two parties i.e. Sunayana Sarkar Dasgupta and Russell Creado, the first party has replied in resp and Russell Creado, the first party has replied in resp and Russell Creado, the first party has replied in response to notice u/s 133(6) that she had not received any such amount from the notice u/s 133(6) that she had not received any such amount from the notice u/s 133(6) that she had not received any such amount from the assessee during the relevant period assessee during the relevant period. Nothing contrary has been othing contrary has been brought on record by the assessee on the reply received by the brought on record by the assessee on the reply received by the brought on record by the assessee on the reply received by the him from the said party. In respect of the second part from the said party. In respect of the second part from the said party. In respect of the second party, assessee had claimed this party had expired in the year 2023 but could not claimed this party had expired in the year 2023 but could not claimed this party had expired in the year 2023 but could not substantiate the same by furnishing corroborative documentary substantiate the same by furnishing corroborative documentary substantiate the same by furnishing corroborative documentary evidence. Also, assessee has not provided details as to PAN and assessee has not provided details as to PAN and assessee has not provided details as to PAN and address of the said party which would otherwise lead address of the said party which would otherwise lead address of the said party which would otherwise lead credence to his submission. In the given set of facts n the given set of facts, in respect of these two parties in respect of these two parties, the penalty imposed by the ld. AO the penalty imposed by the ld. AO is justified.

8.1. On the first contention On the first contention, both the authorities below have taken both the authorities below have taken note of the factual position that return of income of the assessee for A the factual position that return of income of the assessee for A the factual position that return of income of the assessee for AY 2008-09 had reported gross professional receipts of Rs. 74,71,109 09 had reported gross professional receipts of Rs. 74,71,109 09 had reported gross professional receipts of Rs. 74,71,109/-. Therefore, assessee was liable to tax audit Therefore, assessee was liable to tax audit for AY 2008 for AY 2008-09 itself. According to them, c According to them, claim of the assessee that the pres laim of the assessee that the present year under consideration as the first year for tax audit consideration as the first year for tax audit, thus does not hold good, thus does not hold good, rendering him liable to comply with the TDS provisions on the rendering him liable to comply with the TDS provisions on the rendering him liable to comply with the TDS provisions on the payments made by him towards professional fees. payments made by him towards professional fees.

8.2. We note that authorities below have referred only in r We note that authorities below have referred only in r We note that authorities below have referred only in respect of AY 2008-09 wherein the professional receipt in the hands of the assessee 09 wherein the professional receipt in the hands of the assessee 09 wherein the professional receipt in the hands of the assessee exhausted the threshold limit for the requirement of tax audit u/s exhausted the threshold limit for the requirement of tax audit u/s exhausted the threshold limit for the requirement of tax audit u/s 44AB. There is nothing on record from where it can be discerned as to 44AB. There is nothing on record from where it can be discerned as to 44AB. There is nothing on record from where it can be discerned as to what transpired in the assessment ye what transpired in the assessment years 2009-10, 2010 10, 2010-11 and 2011- 12.

8.3. On the claim of assessee in this regard, we refer to second On the claim of assessee in this regard, we refer to second On the claim of assessee in this regard, we refer to second proviso to section 194J which provides that an individual or HUF proviso to section 194J which provides that an individual or HUF proviso to section 194J which provides that an individual or HUF whose total gross receipts from profession exceeds the threshold ross receipts from profession exceeds the threshold ross receipts from profession exceeds the threshold during the financial year immediately preceding the financial year in during the financial year immediately preceding the financial year in during the financial year immediately preceding the financial year in which such sum by way such sum by way of fees for professional services is credited or for professional services is credited or paid, shall be liable to deduct income shall be liable to deduct income-tax under this section. tax under this section. In view of this second proviso to section 194J, the claim of the assessee is this second proviso to section 194J, the claim of the assessee is this second proviso to section 194J, the claim of the assessee is tenable in absence of any verifiable data brought on record by the tenable in absence of any verifiable data brought on record by the tenable in absence of any verifiable data brought on record by the authorities below for disallowing the claim so made by the assessee. authorities below for disallowing the claim so made by the assessee. authorities below for disallowing the claim so made by the assessee. We find that reference to AY 2008 eference to AY 2008-09 by the authorities below is three authorities below is three years away from the year under consideration which cannot be the years away from the year under consideration which cannot be the years away from the year under consideration which cannot be the basis to reject the claim of the assessee without bringing basis to reject the claim of the assessee without bringing basis to reject the claim of the assessee without bringing any verifiable data on record.

8.4. As regards the the second contention, ld. AO observed that assessee ld. AO observed that assessee was actively involved in actively involved in day-to-day professional activities which yielded professional activities which yielded him professional income as report him professional income as reported by him in his profit and loss by him in his profit and loss account. He has also earned salary income during the year account. He has also earned salary income during the year account. He has also earned salary income during the year, forming part of the return filed by him though at part of the return filed by him though at much later much later point in time. Thus, on one hand there is an active pursuit by the assessee to earn Thus, on one hand there is an active pursuit by the assessee to earn Thus, on one hand there is an active pursuit by the assessee to earn professional income but on the other hand there is mental distr professional income but on the other hand there is mental distr professional income but on the other hand there is mental distress / emotional turmoil to focus on financial and tax matter emotional turmoil to focus on financial and tax matter emotional turmoil to focus on financial and tax matters for necessary compliance. In this regard, we did In this regard, we did not find any reasoned observation not find any reasoned observation and finding arrived at by the authorities below for the disallowances and finding arrived at by the authorities below for the disallowances and finding arrived at by the authorities below for the disallowances made u/s 40(a)(ia).It is also worth noting that the mere rejection of a .It is also worth noting that the mere rejection of a .It is also worth noting that the mere rejection of a claim or statutory disallowance does not claim or statutory disallowance does not ipso facto lead to penalty; it lead to penalty; it requires independent satisfaction. s independent satisfaction.

8.5. In view of the above stated factual position and the provision of above stated factual position and the provision of the Act as stated above, we find that the penalty imposed by the ld. AO the Act as stated above, we find that the penalty imposed by the ld. AO the Act as stated above, we find that the penalty imposed by the ld. AO on this disallowance u/s 40(a)(ia) is not tenable. I on this disallowance u/s 40(a)(ia) is not tenable. It is worth noting that t is worth noting that disallowance towards professional fee of Rs 3 lacs would not have any e towards professional fee of Rs 3 lacs would not have any e towards professional fee of Rs 3 lacs would not have any adverse effect on the assessee u/s 40(a)(ia) as it has turned out to be a adverse effect on the assessee u/s 40(a)(ia) as it has turned out to be a adverse effect on the assessee u/s 40(a)(ia) as it has turned out to be a loan transaction.

Order pronounced in the open court on Order pronounced in the open court on 03rd August, August, 2026

Sd/ /- Sd/- (Pawan Singh Pawan Singh) (Girish Agrawal Girish Agrawal) Judicial Member Judicial Member Accountant Member Accountant Member Mumbai Dated: 03.08.2026 KUNAL, PS Copy to: ASHWIN RAMESH SAKSENA ASHWIN RAMESH SAKSENA 1002, GREEN VIEW TOWER 1002, GREEN VIEW TOWER 1 SHANTINIKETA, AIR INDIA COLONY, SHANTINIKETA, AIR INDIA COLONY, YARI RD, ANDHERI(2), MUMBAI YARI RD, ANDHERI(2), MUMBAI MAHARASHTRA, 400061 MAHARASHTRA, 400061 ITO WARD 16(1)(1) ITO WARD 16(1)(1) 2 AAYAKAR BHAWAN, MUMBAI, AAYAKAR BHAWAN, MUMBAI, MAHARASHTRA 400020 MAHARASHTRA 400020 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI MUMBAIBENCH 5 GUARD FILE