TaxTMI 
TaxTMI 
2019 (8) TMI 1961
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.... Tax Act, 1961 (for short the 'Act'). 2. In this case, the assessee filed its return of income for the assessment year under consideration declaring loss of Rs. 27,99,47,049/-. During the assessment proceedings, it was notice that the assessee had not deducted tax at source on various expenses amounting to Rs. 4,97,20,068/-. Accordingly, the AO disallowed these expenses as per the provisions of section 40(a)(ia) of the Act and added the said amount to the total income of the assessee. Consequently, penalty proceedings u/s 271 (1) (c) of the Act was initiated and penalty of Rs. 4,97,20,068/- was imposed u/s 271 (1) (c) of the Act for filing inaccurate particulars of its income. In the first appeal, the Ld. CIT (A) confirmed the penalty im....
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....e the assessee has claimed the expenditure which was not accepted or was not acceptable to the revenue that by itself would not attract penalty u/s 271 (1) (c). By any stretch of imagination, making of incorrect claim cannot amount to furnishing of inaccurate particulars. The Ld. counsel further relied on the decisions of the ITAT in the case of Quikr India Pvt. Ltd. vs. DCIT, ITA NO. 1046/Mum/2017, Anil Kumar Raviraju vs. ITO ITA No. 2909/Mum/2017, ITO vs. M/s Atul Shamji Bharani (HUF) ITA No. 6380/Mum/2013, Mr. Ramkrishna Shetty vs. ACIT ITA No. 7142/Mum/2011 and Tanushree Vasu vs. ACIT, ITA No. 2922/Mum/2012 to substantiate his contentions. 5. On the other hand, the Ld. Departmental Representative (DR) relying on the concurrent findin....
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....does not ipso facto make the assessee liable for penalty u/s 271 (1) (c) of the Act. So far as the addition on account of disallowance u/s 40(a)(ia) is concerned the coordinate Bench of the Tribunal in the case of Tanushree Basu vs. ACIT (supra) has deleted the penalty u/s 271 (1) (c) levied on the basis of addition made on account of disallowance u/s 40(a)(ia). The operative part of the order reads as under:- "6. We have considered submissions of ld representatives of parties and perused orders of authorities below. It is a fact that assessee has claimed expenses aggregating to Rs. 16,17,766/-and same were disallowed by the AO vide completing the assessment under section 143(3) of the Act on the ground that assessee failed to dedu....
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....see failed to deduct TDS on of payments. The ratio of the said case also applies securely to the case before us. 7. In view of above, we hold that levy penalty, in the facts and circumstances of the case, is not in accordance with law and same is deleted by allowing ground of appeal taken by the assessee." 7. Similarly, in the case of ITO vs. M/s Atul Shamji Bharani (HUF) (supra), the coordinate Bench has upheld the findings of the Ld. CIT (A) whereby, the Ld. CIT (A) had deleted the penalty levied on the basis of addition made on account of disallowance made u/s 40(a)(ia). The operative part of the decision of the coordinate Bench reads as under:- "5. We have considered the arguments of the ld. DR and the orders passed....
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....of addition made by invoking the provisions of section 40(a)(ia) of the Act. The coordinate Bench has dismissed the appeal filed by the revenue holding as under:- "12. In view of above and considering the facts that the assessee disclosed ll material facts with regard to the claim of payment(s) made to the sub-contractor(s)/rent paid without deducting TDS and consequently disallowance was made in both the assessment years under consideration as per the provisions of section 40(a)(ia) of the Act, when the genuineness of the payments are not disputed by the department, we hold that the levy of penalty by application of provisions of section 271 (1) (c) of the Act is neither justified nor the provisions of section 271 (1) (c) of the A....