2025 (2) TMI 1783

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.... penalty u/s 271(1)(c) amounting to Rs. 7,39,283/-, which have been imposed in contravention to the provisions of section 40A(3) of the Income Tax Act. 2. That the Ld. CIT(A) has failed to appreciate that all such particulars of the payments having been made u/s 40A(3) have already been disclosed and the disallowance has been made on account of deeming provisions and, therefore, no penalty u/s 271(1)(c) could be imposed. 3. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. Brief facts of the case, as per written submissions filed by the Counsel of the Assessee, are as under: - 1. The Assessee Company filed his return of income on 22.09.2....

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....s. 20,000/- i.e. addition has been made for not complying with the provisions of the Act and there is no case of concealment of income or furnishing of inaccurate particulars of income. Further, the genuineness of the expenditure has also not been doubted by the AO and therefore, it is also not the case of any bogus expenditure. 7. Further, it is submitted that even though the expense is not allowed u/s 40A(3) of the Act, but it does not conclude that the claim of expense made by the Assessee was a false claim. The expenditure was incurred for business expediency and purely a genuine expense. There is only a difference of opinion between the AO and the assessee that expenditure has been disallowed by the AO which nowhere means that....

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....en certain payments above Rs. 20,000/- in violation of section 40A(3) of the Act, therefore, additions have been made but in such a situation, there is absolutely no concealment of facts by the Assessee before the A.O. The ld. counsel has further argued whatever payments were made, it was made by cheques which were brought on record by the Assessee and at the same time wherever payments were made in cash, they were also brought on record by the Assessee. The A.O. has also not found anything wrong with the filing of the details / particulars by the Assessee. 6. The ld. Counsel of the Assessee has also brought on record further two case laws in the case of 'Lakhwinder Singh v ITO', ITA No. 302/Chd/2022 order dated 9.9.2022, during the proc....