DCIT (LTU), NEW DELHI vs. M/S. SIEL LTD., NEW DELHI

Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon.

The facts in brief are that during the course of assessment proceedings, the Assessing Officer noted that the assessee had claimed 2 deduction of Rs.2,22,34,324 under section 43B of the Income-tax Act, 1961. The Assessing Officer in the assessment dated 25.1.2001 disallowed an aggregate amount of Rs.1,18,49,950 out of the total claimant of Rs.2,22,34,324. Out of the above amount of Rs.1,18,49,950 deduction of Rs.1 crores was not allowed by the Assessing Officer on the basis that payment on account of excise duty was made in respect of business transferred to another company, namely, Tecumseh Products India Ltd. (TPIL) and accordingly the liability was on capital account and same was not related to the business of the assessee company. The balance amount of Rs.18,49,950 was not allowed for the reason that as per the method of accounting followed by the assessee, the amounts had not been debited to the profit and loss account. Both these above additions were upheld by the Learned CIT(Appeals) as well as by the ITAT. Subsequently, the Assessing Officer held that there was concealment and filing of inaccurate particulars of income and levied penalty under sec. 271(1)(c) of the Act to the extent of Rs.41,47,482. The Learned CIT(Appeals) has deleted the penalty which has been questioned by the Revenue before us.

3 4. In support of the grounds, the Learned Senior DR has basically placed reliance on the penalty order. The Learned AR on the other hand tried to justify first appellate order.

Having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has deleted the penalty mainly on the basis that there was no concealment of particulars of income or furnishing inaccurate particulars thereof towards the additions made and sustained in the quantum matters. Regarding claim of Rs.1 crore on account of excise duty, it has been stated that a specific note was given in accounts in respect of this payment, reproduced at page Nos. 3 and 4 of the first appellate order. Regarding disallowance of Rs.18,49,950, it was submitted that assessee had specifically claimed deduction for the same in the return of income and details thereof were specifically given in the statement of computation of taxable income supported with certificate from chartered accountant that payment had duly been made. The Assessing Officer had disallowed the deduction stating that above amount had been debited to profit and loss account as per the system of accounting followed by the assessee. The Assessing Officer did not dispute the evidence in regard to payment of the liability during the year. Thus, it is clear that there was no concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee towards 4 the above additions made and upheld in the quantum matters. In absence of fulfillment either of the above two mandatory ingredience that there was concealment of particulars of income or furnishing inaccurate particulars thereof, penal provisions under sec. 271(1)(c) of the Act cannot be initiated.