2016 (2) TMI 1205

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....x (Appeals) has erred in law in confirming the penalty of Rs. 1,08,150/- u/sec. 27(1)(c) of the Income Tax Act, 1961 which the learned Assessing Officer has imposed in this case." "That the Hon'ble Commissioner of Income Tax (Appeals) while upholding the aforesaid penalty did not appreciate the reasonable cause put forth before him regarding the ignorance of the assessee about the provisions of section 40(a)(ia) of the Act and thus the order passed by the Hon'ble Commissioner of Income Tax (Appeals) are merely based on conjectures and surmises which is bad in law." 1. Briefly stated the facts giving rise to this appeal are that the assessee filed written of income on 26.09.2009 declaring an income of Rs. 6,36,140/- and the same ....

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....d or not found to acceptable by the revenue does not automatically attract penalty under section 271(1)(c) of the Act. Further placing reliance on the orders of the ITAT Delhi F Bench in the case of new Horizon India Ltd. Vs. DCIT reported as (2011) 12 ITR (Trib) 332 (ITAT-Dell) submitted that the assessee could not be held to be guilty of concealment of furnishing of income on failure to deduct tax at source as the assessee is disclosing amounts in the accounts then the case of concealment cannot be established against the essessee. The Ld AR further placing reliance on the decision of ITAT Delhi SMC-1 Bench order dated 21.10.2015 in the case of M/ Syndicate Labels Vs ACIT in ITA No. 4386/Del/2014 and submitted that when the dispute is onl....

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..... ACIT (Supra) then it is ample clear that in a situation when disallowance has been made under section 40(a)(ia) of the Act, for non deduction of tax at source from payments made or credited to the respective payees and the assessee made a proper disclosure about the expenses claimed by it as deduction which was neither bogus nor otherwise non deductible then penalty under section 271(1)(c) of the Act is not validly imposable. The relevant operative part of the tribunal order (Supra) is being reproduced below for the sake completeness in our conclusion: "After considering rival submissions and perusing relevant material on record, it is observed that the instant penalty has been imposed only in respect of disallowance u/s 40(a)(ia....