SRF LIMITED,NEW DELHI vs. DCIT, CIRCLE- 1, LTU, NEW DELHI

Briefly the facts relating to the issue in dispute are, the assessee is a residential corporate entity. For the assessment year under dispute, assessee filed its return of income on 30.11.2011 declaring income of Rs.546,29,47,341/- under the normal provisions and book

On the basis of the aforesaid additions, the Assessing Officer issued a show-cause notice under Section 271(1)(c) of the Act calling upon the assessee to explain why penalty should not be imposed for furnishing inaccurate particulars of income. In response to the show- cause notice, assessee furnished its explanation requesting the Assessing Officer to drop the penalty proceedings. However, taking note of the fact that assessee’s appeal against the final assessment order has been dismissed by the Tribunal in dated 09.10.2018, the Assessing Officer passed an order imposing penalty of Rs.18,76,064/- under Section 271(1)(c) of the Act. Against the penalty order so passed the assessee preferred an appeal before Learned CIT(A). After considering the submissions of the assessee in the context of the facts and material on record, Learned CIT(A)

Before us, Learned Counsel appearing for the assessee submitted that assessee’s appeal against the final assessment order, though, was initially dismissed by the Tribunal due to non- prosecution, however, the order so passed was subsequently recalled while allowing miscellaneous application filed by the assessee. He submitted, the appeal is now pending for disposal before the Tribunal. Proceeding further, he submitted, in so far as addition relating to Rs.4,20,000/-, being payment made to SRF Vidhalaya claimed as deduction under Section 37(1) of the Act, it has been decided in favour of the assessee by the Tribunal in the preceding assessment year. In this context, he drew our attention to the relevant observations of the Co-ordinate Bench in dated 24.02.2020 in A.Y. 2010-11. Thus, he submitted, on merits the issue is squarely covered in favour of the assessee. In so far as, the addition made on account of short deduction of TDS, the Learned Counsel submitted, the addition was made due to mismatch in the figure of TDS. He submitted, now the issue has been resolved and as per the information available in the system of the Department, there is no short deduction of TDS. Thus,

Learned Departmental Representative strongly relied upon the observations of the Assessing Officer and Learned CIT(A).

We have considered rival submissions and perused the material on record. Undisputedly, after the order of Learned First Appellate Authority, penalty under Section 271(1)(c) of the Act survived in respect of two additions of Rs.4,20,000/-, being donation to SRF Vidhalaya claimed as deduction under Section 37(1) of the Act, and addition of Rs.78,260/- towards short deduction of TDS. As far as, the addition of Rs.4,20,000/- is concerned, we have noted that identical issue came up for consideration before the Tribunal in assessee’s own case in the immediately preceding assessment year. While deciding the issue in the order referred to above, the Tribunal has accepted assessee’s claim of deduction under Section 37(1) of the Act and deleted the addition. Thus, prima facie, issue is squarely covered in favour of the assessee. In so far as, the other addition of Rs.78,260/- on account of short deduction of tax at source, the assessee has demonstrated before us that such addition was due to mismatch in the claim made by assessee and the information uploaded in the system of the Department. However, as on date, the issue stands resolved and there is no such issue of short deduction of tax at source. Thus, upon considering the facts and material placed before us, we are of the view that no case for imposition of penalty under Section 271(1)(c) of the Act has been made out. Accordingly, we