M/S. BHANSALI TRADE IMPEX,,GIRGAON vs. ITO-19(1)(2),, MUMBAI

The Registry has pointed out a delay of 153 days in filing the appeal. The assessee has filed an application seeking condonation of delay. It is the contention of the assessee that one of the partners’

Having considered rival submissions, we are of the view that the delay in filing the appeal was due to a reasonable cause, hence, we condone the delay and admit the appeal for adjudication on merit.

Brief facts are, the assessee, a partnership firm, filed its return of income for the year under consideration on 28th September 2013, declaring income of ` 9,71,710. During the assessment proceedings, the Assessing Officer on a perusal of the audit report noticed that the auditor has submitted the details of unpaid TDS amounting to ` 19,861. On a query being made, the assessee submitted that it has voluntarily disallowed the TDS amount under section 40(a)(ia) of the Act. The Assessing Officer, being of the view that the assessee should have disallowed the corresponding expenditure and not the TDS amount, disallowed the amount of ` 5,40,170, under section 40(a)(ia) of the Act. The assessee did not contest the aforesaid disallowance. On the basis of the aforesaid disallowance, the Assessing Officer initiated proceedings for imposition of penaltyunder section 271(1)(c) of the Act, alleging furnishing of inaccurate particulars of income and concealment of income. After issuing a show cause notice to the

The learned Authorised Representative submitted, the assessee has disclosed all material facts relating to the expenditure made as well as tax deducted at source not only in the audit report, but also during the assessment proceedings. He submitted, due to a bonafide mistake, the assessee had disallowed the TDS amount instead of the expenditure corresponding to such TDS. He submitted,there being neither furnishing of inaccurate particulars of income or concealment of income, the penalty imposed should be deleted.

The learned Departmental Representative strongly relied upon the observations of the Assessing Officer and learned Commissioner (Appeals).

We have considered rival submissions and perused the material on record. It is evident from the material on record that in the statutory audit report itself, the auditor has furnished the details of expenditure in respect of which tax was not deducted at source. It is also evident that the assessee has voluntarily made some disallowances under section 40(a)(ia) of the Act. However, the mistake

Before parting, we must observe that the assessee has raised a legal issue by way of additional ground challenging the validityof penalty order passed by the Assessing Officer on the ground of defective show cause notice issued under section 274 of the Act. Since we have deleted the penalty imposed under section 271(1)(c) of the Act on merits, it is not necessary for us to deal with the additional ground raised by the assessee. Accordingly, the additional ground is dismissed.

In the result, assessee’s appeal is allowed as indicated above. Order pronounced through notice board under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 30.06.2020.