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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI
Before: SHRI G. MANJUNATHA & SHRI RAVISH SOOD
Date of Hearing 10/12/2019 Date of Pronouncement 10/12/2019 आदेश / O R D E R आदेश आदेश आदेश PER G.MANJUNATHA (A.M):
This appeal filed by the assessee is directed against, the order of the Ld. Commissioner of Income Tax (Appeals)–50, Mumbai, dated 28/02/2018 and it pertains to Assessment Year 2010-11.
The assessee has raised the following grounds of appeal:-
1. The Learned Assessing Officer erred in levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961. On disallowances made in assessment order on expenses not allowable u/s 37 of Income Tax Act.
2. The assessee pray to add, alter or modify any of the ground on or before the date of hearing.
3. The brief facts of the case are that in this case, the assessment has been completed u/s 143(3) of the I.T.Act, 1961 on 26/02/2016 by making additions towards disallowances of interest paid on late
Manisha Vijay Ladhani remittance of TDS for Rs.318/- and disallowances of penalty paid on works contract. Thereafter, the Ld. AO has initiated penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961 and after considering relevant submissions of the assessee levied penalty of Rs.18,318/-, which is 100% of tax ought to be evaded u/s 271(1)(c) of the I.T.Act, 1961, for furnishing inaccurate particulars of income. The assessee carried the matter in appeal before the Ld.CIT (A), but could not succeed. The Ld.CIT(A), for detailed reasons recorded in his appellate order has confirmed penalty levied by the Ld.AO, on the ground that explanation offered by the assessee for making such a claim is not found to be bonafide and accordingly, Explanation (1) to section 271 (1)(c) of the I.T.Act, 1961 would come into play and the assessee will be liable for penalty. Accordingly, confirmed penalty levied by the AO u/s 271(1)( c) of the Act, and dismissed appeal filed by the assessee. Aggrieved by the Ld.CIT(A) order, the assesee is in appeal before us.
None appeared for the assesee. We have heard the Ld. DR and perused the material available on record. We find that the Ld. AO has levied penalty u/s 271(1)(c) of the I.T.Act, 1961, in respect of two additions i.e disallowances of interest paid on late remittance of TDS and disallowances of interest paid on works contract. According to the Ld. AO, the assessee has furnished inaccurate particulars of her income, in respect of above two additions, which warrants penalty u/s 271(1)(c) of the I.T.Act, 1961. It is the claim of the assessee before the lower authorities that mere making a claim which is not substantiated would not amounts to furnishing inaccurate particulars of income. The assessee, further contended that it has filed necessary details, in respect of all those items and Manisha Vijay Ladhani claimed deductions on the bonafide belief that interest paid on late remittance of TDS and interest paid on works contracts is a revenue expenditure, which could be allowed as deduction, while computing income under the head business or profession.
Having considered arguments of the Ld. DR and ALSO material available on record, We find that when a claim is made regarding certain expenses, but such claim was not accepted by the Ld. AO would not be a ground for levying concealment penalty for furnishing of inaccurate particulars of income. Further, the claim of the assessee that said expenditure is deductable is although, rejected by the Ld. AO, but he did not find any deleiberate attempt of the assessee to evade payment tax by claiming said deduction. The AO has disallowed above two expenses only on the ground that said expenditure is not allowable as deduction. But, otherwise the facts with regard to furnishing necessary details, in respect of those expenditure is not disputed by the Ld. AO even during assessment proceedings. Therefore, we are of the considered view that making a claim, which is not substantiated is not a ground for levying concealment penalty u/s 271(1)(c) of the I.T.Act, 1961 and hence, we direct the Ld.AO to delete penalty levied u/s 271(1)(c) of the I.T.Act, 1961.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on this 10 /12/2019