TaxTMI 
TaxTMI 
2018 (12) TMI 1378
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....ssessing Officer erred in imposing penalty of Rs. 1,72,000/- u/s 271(1)(c) of the I.T. Act, 1961 and thereafter CIT (A) erred in sustaining such penalty being on the disallowance u/s 43B on account for non-payment of VAT which was further paid in next F.Y. year hence disallowable in the year but allowable in the next year as per cash payment basis therefore the disallowance is of academic nature and the penalty is unjustified and liable to be quashed." 2. The assessee filed its return of income on 30th September, 2013 declaring loss of Rs. 5,62,668/-. During the scrutiny assessment, the AO noted that the assessee has shown VAT payable at Rs. 5,55,346/- and assessee has not filed the proof of payment of the same. Accordingly, the AO asked....
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....quently the provisions of section 43B were attracted. Thus the ld. A/R has submitted that when the disallowance was made by the assessee voluntarily and before it was detected by the AO, then the case of the assessee would not fall under the category of concealment of income or furnishing inaccurate particulars of income. In support of her contention, she has relied upon the decision of Hon'ble Gujarat High Court in the case of Manu Engineering reported in 122 ITR 306 (Guj.) as well as the decision of Hon'ble Delhi High Court in the case of Virgo Marketing, 171 Taxman 156 (Delhi) and submitted that once the assessee has disclosed all the relevant facts and details relating to the issue and books of accounts were accepted by the AO which wer....
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....l the relevant details which were disclosed by the assessee in the return of income and books of account were found to be correct, then the case would not fall in the category of furnishing inaccurate particulars of income or concealment of income. It is also not in dispute that the VAT of Rs. 5,55,346/- was due and payable and, therefore, the same is an allowable business expenditure except the condition under section 43B that the assessee has to pay the said amount on or before the due date of filing the return of income under section 139(1). Once the claim of the assessee is not found to be bogus or false but because of the reason that the assessee could not pay the amount as required under section 43B, the same was to be disallowed. The....
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....case, as a matter of fact, the assessee has given inaccurate particulars. In Webster 's Dictionary, the word "inaccurate" has been defined as : "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript. " We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, ....
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....o be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature. In this behalf the observations of this court made in Sree Krishna Electricals v. State of Tamil Nadu [2009} 23 VST 24....