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Income Tax Appellate Tribunal, DELHI “C” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
ORDER PER KUL BHARAT, JM :
This appeal filed by the assessee is directed against the order of the Ld. CIT (A)- Muzaffarnagar, dated 28/06/2018 pertaining to Assessment Year 2012-13.
The assessee has raised following grounds of appeal:-
“1. The Ld.CIT (A) has erred in confirming the penalty u/s 271(1)(c) for Rs. 75100 out of Rs. 2,44,300/- imposed by the A.O.”
The only effective ground in this appeal is against sustaining the penalty of Rs. 75,000/- out of Rs. 2,44,300/- imposed by the Assessing Officer (in short “the A.O”.)
The facts in brief are that in this case return of income disclosing income at Rs. 1,05,53,330/- was filed on 29th September, 2012, the same was processed u/s 143 (1) of the Income Tax Act, 1961 (in short “the Act”). The case was selected for scrutiny and the assessment u/s 143(3) was framed vide order dated 27th March, 2015 thereby, the Assessing Officer assessed income at Rs.1,18,31,749/- against the declared income of Rs. 1,05,53,330/.
The Assessing Officer made disallowances in respect of provision for standard and sub standard NPA assets, gratuity and other disallowances. The Assessing Officer had also initiated penalty proceedings u/s 271(1)(C) of the Act. Subsequently, the Assessing Officer vide order dated 27th February, 2018 imposed penalty u/s 271(1) (C) of the Act of Rs. 2,44,309/-.
Aggrieved against this, the assessee preferred appeal before the Ld.CIT(A). The Ld.CIT(A) after considering the submissions of assessee partly allowed the appeal. Thereby, the Ld.CIT(A) deleted the penalty in respect of some disallowance and sustained the penalty in respect of disallowance of Rs. 2,28,478/-, Rs. 11,151 and Rs. 3,200/- those were made respect of sub standard/non standard NPA Assets, loss on sale of furniture’s and fixtures and the dividend receipt.
Aggrieved against this, the assessee is in appeal before the Tribunal.
Ld. Counsel for the assessee vehemently argued that the Ld.CIT(A) not justified in sustaining the penalty. He submitted that the assessee neither concealed any income nor any inaccurate particulars were furnished. It was mere change of opinion, he further submitted that Ld.CIT(A) has not considered the submissions of the assessee in the right perspective. He submitted that the claim of the assessee was bonafide. Therefore, considering the facts and circumstances of the present case, the penalty deserves to be deleted.
Ld. DR opposed the submissions as support the orders of the authorities below. He submitted that the assessee furnished inaccurate particulars of income by claiming allowance of such expenses that was not admissible under the law.
We have heard the rival submissions and perused the material available on record. The Ld.CIT (A) has contested by observing as under:-
“The facts of the case along with material on record have been gone through. It is observed that addition in respect of interest on alleged NPAs for Rs.329241/- has been made in the absence of supporting details. Disallowance of Rs. 103 5/- has been made u/s 43B on non-payment basis. Disallowance of Rs.217246/- has been made for the gratuity contribution in the absence of the approval of the Principal CIT, Muzaffamagar for the gratuity fund. Such addition/disallowance cannot be held in the nature of concealing the particulars or furnishing the inaccurate particulars of income. However, the appellant claimed amount of Rs.228478/-, Rs.11151/- and Rs.3200/- on account of standard/non standard NPA assets, loss .on sale of furniture, deduction u/s 80P(2)(d) of the Act in the return of income which have been disallowed by the AO as being prima facie disallowable. These claims made by the appellant are nowhere debatable in nature. The plea of the appellant that merely not accepting the claim made by the appellant will not attract the penalty y/s 271(l)(c) of the Act has been considered in the light of the above discussion. It is found that the appellant has thus furnished inaccurate particulars of income in respect of claims of Rs.228478/-, Rs.11151/- and Rs.3200/- on account of disallowance for claim of standard/non standard NPA assets, loss on sale of furniture, deduction u/s 80P(2)(d) of the Act. Therefore, the AO is directed to recompute the penalty to be imposed u/s 271(l)(c) of the Act accordingly. Grounds of appeal Nos.l & 2 are partly allowed.”
The contention of the assessee is that the claim was in bonafide.
We find that the Ld.CIT(A) sustained penalty in respect of addition of Rs. 2,28,478/-, Rs. 11,151/- and Rs. 3,200/- that were made by the Assessing Officer on account of disallowance for claim of Standard/Non Standard NPS assets, loss on sale of furniture’s and disallowance of deduction u/s 80P(2) (d) of the Act. Before the Assessing Authority, it was stated that it was mandatory on the part of the assessee bank as per RBI Guidelines to make provision for NPA Assets. Hence the claim was made as per the RBI guidelines. Therefore, in our considered view, this claim of the assessee was debatable. The authorities below ought not to have imposed the penalty and confirmed the same. The Assessing Officer is directed to delete penalty imposed in respect of disallowance of Standard/Sub Standard NPA assets. In respect of the other items, it is seen that the assessee claimed loss on sale of furniture’s and fixtures of Rs. 11,151/- and in respect of the claim of deduction u/s 80P (2)(d), both these expenses were rightly disallowed hence, the penalty on these items is sustained. The ground of appeal of the assessee is partly allowed.
In result, the appeal of the assessee is partly allowed.