2017 (4) TMI 1446

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of hearing, it was noticed that Shri Rajesh Kumar Yadav appeared on behalf of the Department whereas none appeared on behalf of the respondent-assessee inspite of issuance of notice by Registered A.D. No application seeking adjournment has also been made on behalf of the respondent-assessee. In this view of the matter, following Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeal is being disposed of ex parte qua the respondent-assessee after hearing the ld. DR on merits. 3. The only issue in this appeal arises from the action of CIT(A) in deleting the penalty of Rs. 14,34,660/- imposed by the Assessing Officer u/s 271(1)(c) of the Act. Briefly put, the relevant facts are that the respondent-assessee is a HUF who file....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." 5.2 In the decision rendered in the case of CIT vs Atul Mohan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ven in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The words are plain and simple. 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 sec.271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the return ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....under section 40(a) (ia) of the Income Tax Act. Non deduction of TDS by the assessee was resulted in disallowance of expenditure under section 40(a)(ia), that itself cannot be construed as furnishing inaccurate particulars of income or concealment of income. The assessee has failed to deduct TDS which resulted in disallowance of expenditure. In our opinion, the mistake committed by the assessee was compensated by disallowing the expenditure. Further, the revenue cannot penalize the assessee by levying penalty under section 271(1)(c) of the Act. In order to levy penalty under section 271 (1) (c) of the Act, there has to be concealment of particulars of income of the assessee or the assessee must have furnished inaccurate particulars of its i....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....edings. In this case, it is clear that the fact of payment interest were neither concealed nor inaccurately presented by the appellant. The particulars of all the payments were reflected in the return filed by the appellant. The totaling error by which the amount of interest paid was taken as Rs. 47,62,630/- as against the actual amount of Rs. 42,62,630/- stood reconciled before the CIT(A) during the appellate proceedings pertaining to the quantum appeal. The disallowance of Rs. 42,62,630/- has been sustained since the appellant did not deduct TDS as stipulated in section 194A of the Act. Thus the appellant has not complied with legal requirements but the details of payment of interest have been duly reflected in the return filed. In such a....