ITO, NEW DELHI vs. SH. ROHIT KHANNA, NEW DELHI

PDF · subscribers
ITA 4296/DEL/2014Status: DisposedITAT Delhi30 September 2015AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the mere failure to deduct tax at source, while the expenses were otherwise properly disclosed, is not a sufficient ground for imposing penalty under Section 271(1)(c). The penalty was deleted as the assessee did not conceal income or furnish inaccurate particulars.

What were the facts?

The assessee claimed deductions for commission and advertisement expenses. The AO disallowed these expenses for non-deduction of TDS and subsequently imposed a penalty. The CIT(A) deleted the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) can be imposed solely for non-deduction of TDS on disclosed expenses. Whether non-deduction of TDS amounts to concealment of income or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 40(a)(ia),Section 194H,Section 194C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-I : NEW DELHI

Before: SHRI R.S. SYAL

For Respondent: Shri S.L. Anuragi, Sr. DR
Pronounced: 30.09.2015

ORDER This appeal by the Revenue arises out of the order passed by the CIT(A) on 25.6.2014 deleting the penalty of Rs.4,58,148/- imposed by the AO u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2010-11.

2.

I have heard the ld. DR and perused the relevant material on record. There is no appearance from the side of the assessee despite notice. I am, therefore, proceeding to dispose of this appeal ex parte qua the assessee.

3.

It is observed that the assessee paid Commission of Rs.14,65,940/- and incurred Advertisement expenses amounting to Rs.53,688/-.

Deduction was claimed for these two expenses. The AO disallowed these two expenses on the ground that tax was required to be deducted at source u/s 194H and 194C, respectively for these payments, which was not done. He, therefore, made disallowance u/s 40(a) (ia) in respect of these amounts. Thereafter, penalty was imposed which came to be deleted in the first appeal.

4.

It is observed that the very basis of penalty is disallowance of two expenses for non-deduction of tax at source. Section 271(1)(c) can be invoked where the assessee conceals his income or furnishes inaccurate particulars of his income. Here is a case in which the assessee claimed deduction after due payment of these two expenses and this fact was properly disclosed which has not been disputed by the AO. The mere fact that the assessee did not deduct tax at source may be a good ground for disallowance in assessment, but cannot under any circumstance be considered as a case justifying imposition of penalty u/s 271(1)(c). I, therefore, approve the view taken by the ld. CIT(A) on this score.

5.

In the result, the appeal is dismissed.

The order pronounced in the open court on 30.09.2015.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →