Tax Penalty Dismissed for Non-Payment Issue

The penalty under section 271(1)(c) of the IT Act for the assessment year 2013-14 was deleted as the disallowance under section 43B was deemed a technical issue of non-payment before the due date, not concealment or furnishing inaccurate particulars. The Tribunal held that since all relevant details were disclosed to the AO and the disallowance had no revenue effect, no penalty was warranted. The appeal of the assessee was allowed, and the penalty was dismissed based on Supreme Court precedent and findings that the disallowance was not a deliberate attempt to conceal income.

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Issues:
Penalty under section 271(1)(c) of the IT Act for assessment year 2013-14 based on disallowance under section 43B for non-payment of VAT.

Analysis:
The appeal was against a penalty order under section 271(1)(c) of the IT Act for the assessment year 2013-14. The assessee declared a loss of Rs. 5,62,668 and showed VAT payable at Rs. 5,55,346 without proof of payment. The AO made an addition under section 43B and imposed a penalty of Rs. 1,72,000. The assessee voluntarily disallowed the VAT in the revised computation of income. The assessee argued that the disallowance was due to non-payment before the due date and was later paid, thus no concealment of income. The AO claimed it was inaccurate particulars. The Tribunal noted that the assessee disclosed all facts and the disallowance was technical due to non-payment, not false claim. The disallowance had no revenue effect, as it was allowed in the subsequent year. Citing Supreme Court decisions, the Tribunal held that no penalty was warranted under section 271(1)(c) as no inaccurate particulars were furnished.

The Tribunal found that the assessee had provided complete details regarding the deduction under section 43B in the Tax Audit Report and income computation. It was a matter of opinion on allowance, not concealment. Relying on Supreme Court precedent, the Tribunal confirmed the CIT(A)'s decision to delete the penalty. Since all relevant details were disclosed to the AO, the disallowance under section 43B did not amount to concealment or furnishing inaccurate particulars, leading to the deletion of the penalty.

Therefore, the penalty under section 271(1)(c) was deleted as the disallowance under section 43B was not a case of concealment or furnishing inaccurate particulars, but a technical issue of non-payment before the due date. The appeal of the assessee was allowed, and the penalty was dismissed.

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