T.C. HEALTHCARE PVT LTD,MEERUT vs. ITO WARD-25(1), DELHI

Coming to the assessee’s sole substantive ground challenging both the lower authority’s action imposing section 271(1)(c) penalty(ies) amounting to Rs.4,86,860/- and 20,080/- relating to as many quantum disallowance is under the head gifts/presentation expenses and penalty paid on excise duty, respectively, it transpires at the outset during the course of hearing that the Assessing Officer had framed his assessment on 26.12.2018 to this effect which stood upheld in the CIT(A)’s lower appellate discussion. The matter then travelled to this Tribunal, wherein, the above latter issue of penalty payment on excise duty stood restricted to Rs.64,360/- than that in the earlier round amounting to Rs.1,26,696/-.

It is in this background that both the learned lower authorities have held the assessee to have concealed and furnished its inaccurate particulars of income to levy section 271(1)(c) penalty. The Revenue could hardly dispute that both the impugned quantum disallowances have been made after rejecting the assessee’s detailed explanation all along which could not be either termed as an instance of concealment or furnishing of inaccurate particulars of income as per the lordships land mark decision in CIT vs Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 (SC). Hon’ble Apex Court has further settled the issue that quantum and penalty are separate proceedings wherein each and every disallowance/additions made in course of former does not automatically result in invocation of the latter provision. We thus find merit in the assessee’s instant sole substantive ground to delete the impugned penalty in very terms.

The assessee’s appeal is allowed.