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TaxTMI 
TaxTMI 
TaxTMI 
2021 (2) TMI 1134
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.... of penalty of Rs. 8,39,460/- under section 271(1)(c) of the Act without appreciating the facts and circumstances of the case. 2. The Ld. CIT(A) failed to appreciate that the Appellant has neither furnished any inaccurate particulars of income nor concealed any particulars of income. Therefore the levy of penalty of Rs. 8,39,460/- under section 271(1)(c) is unjustified and the same may be deleted. 3. The Ld. CIT(A) failed to appreciate that the non-payment of MVAT and sales tax liability was due to dispute between the Appellant and the sales tax department. Hence, the levy of penalty under section 271(1)(c) on the disallowance of Rs. 27,15,360/- invoking the provisions of section 43B of the Act is not at all justified and the same may b....
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....s the same is condoned. 5. Brief facts of the case leading to levy of penalty arising as under:- In the quantum proceedings, the AO had made two additions. Firstly, he had disallowed an amount of Rs. 27.15 lakhs under section 43B of the I.T. Act. Secondly, he had added back an amount of Rs. 0.01 lakh on account of short credit in the P & L a/c (Profit and Loss Account), The Assessing Officer noted that the assessee had not voluntarily disallowed under section 43B of the Act the Service Tax and Maharashtra Value Added Tax (hereinafter-referred to as 'ST' and 'MVAT' respectively) to the tune of Rs. 22.61 lakhs and Rs. 4.53 lakhs respectively altogether totalling Rs. 27.15 lakhs. In other words, the assessee had not paid the ....
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....against this understatement. Accordingly, once more the AO concluded that this was a clearly a case of filing of inaccurate particulars of income. He then levied penalty on this slew of additions totalling Rs. 1,287/-. 7. Upon assessee's appeal, learned CIT(A) noted following submission on behalf of the assessee:- "In so far as the addition, made under section 43B of the Act is concerned he stated that as per the provisions of Service Tax Rules the payment of service tax was not due. Similarly as per the Maharashtra Value Added Tax Act, 2002 the payment of MVAT was not due. Both these amounts were not due as a result of a consequence of a dispute. They had accordingly not been paid even as on 31st March 2011. Here, the AR pointed out....
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....en disclosed by the appellant in the tax audit report. To this extent, there was no furnishing of inaccurate particulars of income per se. Accordingly, the AR sought to rely on the decision of the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. (322 ITR 128) and pleaded for deletion of the penalty imposed. In so far as the penalty relating to the smaller additions amounting to Rs. 1,257/- is concerned, no submissions were made by the AR." 8. Learned CIT(A) did not find above convincing, he referred to the assessee's argument that it was a disputed liability as no payment has been received. But he found that tax audit report does not mention so that assessee's own tax audit report is clearly goes aga....
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....upon by the Ld. Commissioner of Income Tax (Appeal) and as canvassed by the learned counsel of the assessee are germane and support the case of the assessee. Furthermore, as held by the Hon'ble Apex Court in the case of Reliance Petroproducts Pvt. Ltd. 322 ITR 158, the disallowance of a claim made by the assessee cannot itself give rise to levy of penalty under section 271(1)(c) of the Act. Accordingly, in the background of aforesaid discussion and precedent M/s. Total Lubricants India Ltd. We do not find any infirmity in the order of the Ld. Commissioner of Income Tax (Appeals). Accordingly, we uphold the same." 11. We find that the situation is analogical in this case. The assessee has furnished all particulars there is no concealm....