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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI G.S.PANNU & SHRI JOGINDER SINGH
The captioned appeal by the Revenue is directed against the order of the CIT(A)-16, Mumbai dated 12/08/2013, pertaining to the Assessment Year 2008-09, which in turn has arisen from the order passed by the Assessing Officer dated 15/12/2099 under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) .
(Assessment Year : 2008-09) 2. In this appeal, the only issue in dispute is penalty imposed by the Assessing Officer under section 271(1)(c) of the Act amounting to Rs.15,73,824/-.
Briefly put, the relevant facts are that the respondent assessee is a company incorporated under the provisions of the Companies Act, 1956. Pursuant to a search and seizure action under section 132(1) of the Act on 19/07/2007, the assessee had filed return of income declaring a total income of Rs.8,99,13,211/-, which was subject to an assessment under section 153A r.w.s. 143(3) of the Act dated 15/12/2009. The income assessed by the Assessing Officer was higher than the returned income and the addition relevant for our purpose is a sum of Rs.46,30,250/-, which represented disallowance in terms of section 40(a)(ia) of the Act. The said disallowance was made on the ground that the corresponding tax deduction at source was not deposited within the time period prescribed under section 200(1) of the Act and, hence, the disallowance in terms of section 40(a)(ia) of the Act. The Assessing Officer treated such difference between the returned income and the assessed income as furnishing of inaccurate particulars of income by the assessee within the meaning of section 271(1)(c) of the Act. Accordingly, the Assessing Officer levied a penalty of Rs.15,73,824/- under section 271(1)(c) of the Act, which was equivalent to 100% of the tax sought to be evaded with respect to a disallowance of Rs.46,30,253/-.
3.1 On an appeal by the assessee, the CIT(A) has deleted the penalty on the ground that non-acceptance of a claim for deduction of (Assessment Year : 2008-09) expenditure does not amount to furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act. Against such decision of the CIT(A), Revenue is in appeal before us.
Before us, Ld. Departmental Representative appearing for the Revenue has reiterated the Grounds of appeal which primarily seek to defend the action of the Assessing Officer on the ground that assessee’s claim for deduction of expenditure without effectuating the tax deduction/belated payment of TDS justified the disallowance under section 40(a)(ia) of the Act, which is liable for levy of penalty under section 271(1)(c) of the Act.
5. On the other hand, Ld. Representative for the assessee defended the ultimate decision of the CIT(A) and pointed out that disallowance under section 40(a)(ia) of the Act on account of non-payment of the TDS, which is a technical default, does not result in levy of penalty under section 271(1)(c) of the Act. In support of such proposition, reliance has been placed on the judgment of the Hon’ble Gujarat High Court in the case of CIT vs.L.G.Chaudhary in Tax Appeal No.263 of 2013 dated 4th April, 2013. Furthermore, the Ld. Representative for the assessee also relied upon the decision of the Indore Bench of the Tribunal in the case of Roop Singh Bagga, dated 31/5/2013, wherein also under similar circumstances penalty levied under section 271(1)(c) of the Act has been deleted. Apart from reiterating the reasoning adopted by the CIT(A), Ld. Representative for the assessee also pointed out that even otherwise, the basis on which the disallowance was made by invoking section 40(a)(ia) of the Act was a (Assessment Year : 2008-09) debatable issue for which the penal provisions of section 271(1)(c) of the Act are not attracted. For this purpose he referred to the relevant discussion in the order passed by the Assessing Officer and the CIT(A) in the quantum assessment proceedings dated 15/12/2009 and 25/01/2011 respectively, copies of which were placed on record.
6. Having considered the rival stands, in our considered opinion, no interference is called for in the impugned order of the CIT(A), whereby penalty imposed by the Assessing Officer under section 271(1)(a) of the Act has been deleted. Ostensibly, the disallowance made in the quantum assessment proceedings, which has suffered the levy of penalty under section 271(10(c) of the Act, was made by invoking section 40(a)(ia) of the Act. Section 40(a)(ia) was invoked to disallow an expenditure of Rs.5,00,53,380/- for the reason that the corresponding TDS was not deposited within the time prescribed in law. Notably, as per the Hon’ble Gujarat High Court in the case of L.G.Chaudhary(supra) non-payment of TDS was a technical default which leads to the disallowance under section 40(a)(ia) of the Act and the same does not constitute concealment of income or furnishing of inaccurate particulars of income by the assessee within the meaning of section 271(1)(c) of the Act. In view of the aforesaid judgment of the Hon’ble Gujarat High Court no fault can be found in the conclusion drawn by the CIT(A), which we hereby affirm.
6.1 Moreover, it is a trite law, as settled by the Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158(SC) that mere making a claim, which is found unsustainable by the (Assessment Year : 2008-09) Revenue, would not amount to furnishing of inaccurate particulars regarding the income by the assessee. In the present case too, the orders of the authorities below do not reflect a finding that any of the details or other particulars furnished by the assessee either in its return of income or during the assessment proceedings, qua the impugned dispute were found to be erroneous or false or incorrect. Thus, considering the entire gamut of facts and circumstances of the case, we find that the CIT(A) has correctly deleted the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act. Consequently, the order of the CIT(A) is affirmed and the appeal of the Revenue is dismissed.
In the result, the appeal of the Revenue is dismissed.