2025 (9) TMI 1246

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....(c) of the Income-tax Act, 1961 (for short 'the Act'). 2. At the time of hearing, ld. AR of the assessee brought to our notice penalty order passed vide order dated 21.03.2022 wherein penalty was levied on an amount of Rs. 10,38,01,232/- for declaring inaccurate particulars of income. He submitted that in quantum, AO has proceeded to make addition under two heads, (i) claim of depreciation on goodwill; and (ii) disallowance/deemed income u/s 40A(3) of the Act. He submitted that against the quantum order, assessee preferred an appeal before the ITAT wherein ITAT decided the issue in favour of the assessee by deleting the disallowance of goodwill in ITA No.7691/Del/2018 vide order dated 12.03.2025 and placed the order on record. He submitted....

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....water house coopers Pvt. Ltd. vs. CIT (2012) 348 ITR 306. He relied on these decisions and prayed that the penalty levied on the assessee may be deleted. 3. Further ld. AR of the assessee submitted a letter dated 06.11.2017 which was submitted before the AO wherein it was submitted that assessee has submitted details of expenses in tax audit report in contravention to section 40A(3). Expenses were already reported in the tax audit report but while filing the return, the same were not picked up by the software due to clerical mistake and the return was filed accordingly. He placed the abovesaid letter with the record to submit that all these details were already submitted before the AO. 4. On the other hand, ld. DR of the Revenue submitted....

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....at the payees are already identified and genuineness of the transaction is not in doubt. We observe that ITAT, Ahmedabad Bench in the case of Ramchand Bhulchand Rajai (supra) has considered the similar issue in detail and held as under :- "13. We have considered the contentions of the ld. Counsel for the assessee and we find merit in the same, that the mere disallowance of expenses u/s 40A(3) of the Act in the present case would not invite the levy of penalty for concealing or furnishing of inaccurate particulars of income. It is an undisputed fact that all particulars relating to payments made in violation of the provisions of Section 40A(3) of the Act were disclosed by the assessee in its Tax Audit Report filed in terms of section 44AB ....

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....all particulars of expense and the assesses explanation for not suo moto disallowing the same as being done by mistake, was found bonafide by the court, penalty levied u/s 271(1)(c) of the Act was deleted by the Apex court. Even otherwise, during the course of hearing before us, the ld. Counsel for the assessee drew our attention to the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication (P.) Ltd., reported in [2010] 327 ITR 510 (Delhi), which, he pointed out, though was relied upon by the Assessing Officer in the present case while levying penalty, it actually supported the assessee's case. He drew our attention to the findings of the Hon'ble High Court in the said case holding that as long as the assessee ha....