TaxTMI 
TaxTMI 
2020 (2) TMI 935
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....utory provisions and not because of furnishing of inaccurate particulars of income. On facts and in law thus initiation of penalty proceedings was not warranted. 2. The initiation of penalty proceedings followed by the levy of penalty on the ground that the appellant filed inaccurate particulars of income and evaded the tax on the income of Rs. 23,52,505/- under three heads of income was void, illegal and without jurisdiction and barred by limitation. 3. That the levy of penalty of Rs. 7,91,852/-u/s 271 (1)(c) of I.T. Act made by the Ld. Assessing Officer and sustained by the Ld. CIT(Appeals) being illegal and untenable on facts and in law deserves to be quashed and cancelled." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee company being incorporated on 02.12.1988 is into the business of manufacturing and sale of engineered metal products for auto and allied engineering industries such as Aluminum Die Cast, Sheet Metal, etc.. On the basis of assessment framed under section1 143 (3) of the Act at total income of Rs. 1,85,64,980/- by making various disallowances inter alia addition of Rs. 22,77,910/-, Rs. 44,592/-....
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....ne the aforesaid question framed in the light of the fact that assessee company having been incorporated way back in 1988 whose accounts are audited cannot be accepted by any stretch of imagination that they have claimed the deduction u/s 80IB to the tune of Rs. 22,77,910/- and Rs. 44,592/- u/s 80G of the Act inadvertently. Except the letter dated 09.07.2008 written by the assessee company to the AO during assessment proceedings, no cogent reason whatsoever has been brought on record as to what was the material with assessee company which is manned by expert hands put under the impression that they are eligible for deduction u/s 80IB of the Act. 8. For facility of reference, extract of the letter dated 09.07.2008 written by the assessee company to the AO is extracted as under :- "In our Income Tax Return filed for the captioned assessment year declaring Taxable Income at Rs. 1,59,42,885/- wherein the assessee company has claimed the deduction u/s 80-IB of the Income Tax Act, 1961. In this connection, it is respectfully submitted that while going through our records we have noticed as under: 1. That the deduction u/s 80 IB has been inadvertently claimed at by th....
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....ke of brevity and non duplication, the same are not reproduced here again." 12. When we examine the aforesaid satisfaction recorded by the AO in continuation with the addition made by the AO under separate heads viz. for claiming wrong deductions u/s 80IB and 80G, made addition for not deducting the TDS for making payment of legal and professional charges etc. we are of the considered view that it is a valid satisfaction because it is categorically mentioned in the satisfaction note that, "assessee company has furnished inaccurate particulars with a view to evade the tax and the reason described above may be treated as satisfaction note for initiating the penalty proceedings u/s 271(1)(c) of the Act for the above two additions made". Then, on the basis of aforesaid satisfaction recorded by the AO, notice was issued to the assessee company u/s 274 r/w section 271(1)(c) of the Act which has never been challenged by the assessee company. All these facts go to prove that penalty proceedings in this case are initiated on the basis of valid satisfaction and the decisions relied upon by the assessee are not applicable to the facts and circumstances of the case. 13. Ld. AR for the as....
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....ncome by way of furnishing inaccurate particulars of income. 16. Hon'ble Delhi High Court in case of CIT vs. Zoom Communication P. Ltd. (2010) 327 ITR 510 (Delhi) duly discussed the judgment rendered by Hon'ble Apex Court in the case of Reliance Petro Products Pvt. Ltd. (supra) by returning following findings :- "18. In the case of Reliance Petro Products Private Limited (2010) 322 ITR 158 (SC), the addition made by the Assessing Officer in respect of the interest claimed as a deduction under Section 36(1)(iii) of the Act was deleted by the Commissioner of Income Tax(Appeals) though it was later restored, by the Tribunal, to the Assessing Officer. The appeal filed by the assessee against the order of the Tribunal was admitted by the High Court. It was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed the income nor filed inaccurate particulars thereof. In recording this finding, the Tribunal felt that if two views of the claim of the assessee were possible, the explanation offered by it could not be said to be false. This, however, is not the factual position in the case before us. The facts of the present case thu....
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.... company. 19. Ld. AR for the assessee further contended that penalty initiated on the basis of addition of Rs. 30,000/- made u/s 40A(ia) of the Act for non-deduction of TDS cannot be levied as proper disclosure was made by the assessee and relied upon the decision rendered by the coordinate Bench of the Tribunal in case of Syndicate Labels vs. ACIT in ITA No.4386/Del/2014 order dated 21.10.2015. On the other hand, ld. DR for the Revenue relied upon the orders of the lower authorities below. 20. We are of the considered view that contention made by the ld. AR for the assessee in this regard is sustainable because qua addition of Rs. 30,000/- assessee company has made full disclosure of all the facts as to making payment on which TDS was not deducted. So, the assessee had no occasion to furnish inaccurate particulars to conceal its income as the only dispute was qua deduction or non-deduction of tax for the payment made on account of legal and professional expenses. 21. Coordinate Bench of the Tribunal in case of Syndicate Labels vs. ACIT (supra) deleted the penalty levied for nondeduction of tax u/s 40A(ia) by returning following findings. "3. After considering riv....