SHANTI CHEMSTEEL PVT. LTD.,MUZAFFARANGAR vs. DCIT, CIRCLE- 2, MUZAFFARNAGAR

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ITA 7054/DEL/2018Status: DisposedITAT Delhi25 October 2021AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that disallowance of expenditure does not amount to concealment or furnishing of inaccurate particulars of income. Therefore, the penalty levied under Section 271(1)(c) was not sustainable.

What were the facts?

The assessee's appeal is against the CIT(A)'s order confirming a penalty levied by the AO. The penalty was based on additions made to the assessee's income for penalty interest paid to a bank and fee paid to ROC.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied for disallowance of expenditure. Whether the AO was clear in initiating penalty proceedings for concealment or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. K. N. CHARY

Hearing: 25/10/2021Pronounced: 25/10/2021

This appeal filed by the assessee is preferred against the order of the CIT(A), Muzaffarnagar dated 31.08.2018 for A.Y. 2013-14. 2. The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the penalty of Rs.32500/- levied by the AO u/s. 271 (1) (c) of the Act.

3.

The roots for the levy of penalty lie in the assessment order dated 31.03.2016 framed u/s.143 (3) of the Act. The AO, interalia made addition of Rs.496000/- on account of penalty interest paid to Punjab National Bank and Rs.1,05,000/- on account of fee paid to ROC. The penalty proceedings were separately initiated. The relevant findings in the penalty order read as under :-

4. From the above it can be seen that the AO was not certain whether he is initiating penalty proceedings for concealing the particulars of income or furnishing inaccurate particulars of income.

5.

We are of the considered view that disallowance of expenditure would not amount to concealment of income or furnishing inaccurate particulars of income. The ratio laid-down by the Hon’ble Supreme Court in the case of Reliance Petro Products 322 ITR 158 squarely apply on the facts of the case in hand, therefore, we do not find any merit in the levy of penalty u/s. 271 (1) (c) of the Act and the same is directed to be deleted. 6. In the result, the appeal filed by the assessee is allowed.

4.

Decision announced in the open court in the presence of both representatives on 25.10.2021.

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