2015 (3) TMI 53

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....1b). The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmadabad has erred in law and on facts to ignore explanation 1 of provision of Section 271(1)(c) of the Act, which lays down that where Assessee's explanation in respect of any matter was not found 'satisfactory', provision of Section 271(1)(c) of the Act, were attracted for furnishing inaccurate particulars of income. 2). On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer." 2. Assessing Officer in the penalty order observed as under: "(a) "The return of income was filed by the assessee on 07.07.2005 declaring total income of Rs. 13,01,223/-. The assessment was completed....

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....our kind reference. The Assessing Officer had allowed the deduction of Rs. 19,58,374/- and reduced the total income to Rs. 3,26,596/-. In view of the above we would like to state the disallowance was made on a technical ground and since all the conditions of section 273A are fulfilled and request your good self that please waive the penalty proceedings and do not impose any penalty under section 271(1)(c) of the I.T. Act, 1961." (c) The A.O. rejected assessee's explanation and observed that "The assessee has submitted that the Tax Deducted at Source of Rs. 19,58,374/- was not deposited into government account within the stipulated period i.e. 31.03.2005, which was only a technical mistake. It is pertinent to reproduce the relevant provis....

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..... Thus, the assessee has furnished inaccurate particulars in respect of income of Rs. 19,58,374/-. In the case of assessee disallowance of Rs. 19,58,374/- was made since the assessee had failed to deposit the tax deducted at source into the 3vernment account before the expiry of the time prescribed under sub-section (1) of section 200 of the I.T. Act (in this case 31.03.2005). The assessee has not given any reply to the satisfaction of the AO as to what prevented him from depositing the TDS into the Govt. A/c. merely stating that the disallowance was made on technical ground, the assessee cannot be absolved of its responsibilities of complying with the provisions of the Act while furnishing the particulars of income. What was expected from....

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.... as against maximum penalty leviable of Rs. 21,49,854/- @ 300% of such tax. This penalty order is passed after obtaining prior approval of the Addl. C.I.T. Range-9, Ahmedabad accorded vide letter No.Addl./Range.9/Pen/Approval/2009-10 dated 29.03.2010." 3. Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee. Having considered the same CIT(A) has deleted the penalty in question. Same has been opposed before us on behalf of Revenue inter alia submitting that CIT(A) was not justified in deleting penalty of Rs. 7,16,818/- levied under the provisions of Section 271(1)(c) of the Act. Accordingly, order of CIT(A) be set aside and that of Assessing Officer be restored. On other han....