SURENDRA KUMAR THAKRAL,MEERUT vs. DCIT, CIRCLE- 2, MEERUT

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ITA 473/DEL/2018Status: DisposedITAT Delhi12 November 2018AY 2012-135 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 the assessee had a bonafide belief that the LFC was exempt, as evidenced by the employer not deducting TDS. Therefore, it could not be said that the assessee concealed particulars of income or furnished inaccurate particulars. The penalty was directed to be deleted.

What were the facts?

The Assessing Officer reopened the assessment to include Leave Fare Concession (LFC) received by the assessee, which was claimed as exempt. The employer, SBI, did not deduct TDS on this amount. The Assessing Officer levied a penalty under Section 271(1)(c) for concealment of income.

What were the issues?

Whether a penalty under Section 271(1)(c) is leviable when the assessee acted under a bonafide belief of exemption, supported by the employer's action of not deducting TDS.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 10(5),Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,

Before: SHRI N.K. BILLAIYA

For Appellant: Shri Rohit Aggarwal, CA
Hearing: 05.11.2018

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:

1.

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals], New Delhi dated 28.12.2017 pertaining to assessment year 2012-13.

2.

The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the penalty of Rs. 54,000/- levied u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'].

3.

Roots for levy of penalty lie in the assessment order dated 17.11.2016 framed u/s 147 r.w.s 143(3) of the Act.

4.

The completed assessment was reopened because the Assessing Officer found that the assessee has not included the LFC/LTC received from its employers in its income and the same was claimed to be exempt u/s 10(5) of the Act. The reassessment was completed after making the addition of LFC/LTC received from the employer. Penalty proceedings were separately initiated.

5.

During the course of penalty proceedings, the assessee strongly contended that since his employer SBI did not deduct tax at source on the LFC/LTC payment, the assessee was under bonafide belief that the same was exempt. The contention of the assessee did not find favour with the Assessing Officer who proceeded by levying penalty of Rs. 54,000/- u/s 271(1)(c) of the Act. The assessee carried the matter before the ld. CIT(A), but without any success.

6.

Before me, the ld. counsel for the assessee reiterated what has been stated before the lower authorities.

7.

The ld. DR strongly supported the findings of the first appellate authority.

8.

I have carefully considered the orders of the authorities below. There is no dispute that the employer SBI did not deduct tax at source on reimbursement of LFC/LTC. It cannot be ruled out that the assessee was under bonafide belief that the same is exempt from tax. Otherwise, the employer would have deducted tax at source. In my considered view, it cannot be stated that the assessee has concealed its particulars of income or has furnished inaccurate particulars of income. Considering the circumstances under which the assessee formed bonafide belief, I am of the opinion that this is not a fit case for levy of penalty u/s 271(1)(c) of the Act. I, accordingly, direct the Assessing Officer to delete the penalty so levied.

9.

In the result, the appeal filed by the assessee in is allowed.

The order is pronounced in the open court on 12.11.2018.

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