TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 560
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....e business of construction. During the course of assessment proceedings, the Assessing Officer, on verification of details submitted in respect of labour payment, noticed that in some cases, the tax deducted at source from certain parties to whom labour payments were made, were not deposited into Government account as per the provisions of section 200(1) of the Act. He, therefore, held that the assessee had clearly violated provisions of section 40(a)(ia) of the Act and accordingly, made a total addition of Rs. 13,20,588/- to the total income of the assessee. The Assessing Officer, thereafter, initiated penalty proceedings by issuance of notice under section 274 read with section 271 of the Act on 24.10.2008 to the respondent âEUR" assessee. The assessee submitted its reply in response to the show cause notice the details whereof are reproduced in paragraph 2 of the impugned order. The Assessing Officer, however, was not convinced by the reasons put forth by the assessee and accordingly, levied minimum penalty of Rs. 4,44,510/- under section 271(1)(c) of the Act. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals), who by an order dated 1....
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....t in the case of Commissioner of Income Tax IV v. L. G. Chaudhary rendered on 15.01.2013 in Tax Appeal No.536 of 2012 wherein, the court observed that the disallowance was due to non-payment of TDS, which was at the most a technical default and that, there was nothing to indicate any concealment of the income or furnishing of inaccurate particulars of income by the assessee and that the Assessing Officer was not justified in levying the penalty. The court, accordingly, did not find any reason to interfere in the appeal and held that both the authorities, namely, CIT (Appeals) and the Tribunal have rightly deleted the penalty. 5. Opposing the appeal, Mr. Varun Patel, learned standing counsel for the respondent, reiterated the findings recorded by the Assessing Officer and the Tribunal. It was submitted that in the present case, while the appellant âEUR" assessee had deposited Rs. 6,18,300/- on 24.04.2006, that is, before the due date of filing of return of income for the assessment year under consideration, the balance amount out of Rs. 13,12,588/- had not been deposited in the year under consideration and was deposited only in the subsequent year. Referring to the findings r....
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....hed inaccurate particulars of income and levied penalty under section 271(1)(c) of the Act. The Tribunal, while upholding the finding recorded by the Assessing Officer, has found that this was not a case wherein the claim made by the assessee was allowable under the provisions of the Act and that the assessee was required to deduct tax in accordance with the statutory provisions and deposit the same within the stipulated time limit as prescribed, which has not been done by the assessee. The Tribunal has, accordingly, come to the conclusion that the assessee had suppressed accurate particulars of income by not making disallowance under section 40(a)(ia) of the Act. 7. As noticed hereinabove, the Commissioner (Appeals) had deleted the penalty on the ground that the default being technical and venial in nature inasmuch as the entire amount of tax which was required to be deducted at source was deducted and deposited in the Government account. According to the Commissioner (Appeals) for a technical breach, levy of penalty was not warranted. Thus, the assessee while filing the return of income, did not make disallowance under section 40(a)(ia) of the Act in relation to the amounts paid....
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....or any detail supplied was found to be factually incorrect and accordingly, held that, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The court repelled the contention raised by the counsel for the revenue that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". The court held that in order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore, it is obvious that it must be shown that the conditions under section 271(1)(c) must exist before the penalty is imposed. The court further observed that there can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. 9. Reverting to the facts of the present case, the Assessing Officer, in the penalty order, has observed that the addition/disallowance made on account of non-deduction of tax deducted at source....