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2014 (10) TMI 172 - AT - Income TaxLevy of penalty u/s 271(1)(c) – Explanation of payment to four persons made or not – Held that:- No penalty on account of concealment and/or furnishing inaccurate particulars of income u/s 271(1)(c) could be levied, while, where not so, the provision of Explanation (1B) would stand attracted - The onus to rebut the statutory presumption of Explanation (1A) and Explanation (1B), which puts the burden of substantiating its case on the assessee, failing which it would be deemed to have concealed and/or furnished inaccurate, particulars of income – following the decision in CIT v. Atul Mohan Bindal [2009 (8) TMI 44 - SUPREME COURT] - where the disallowance leading to the variation between the assessed and returned incomes is u/s. 40(a)(ia), being independent of the provision where-under the same (disallowance) is effected - the question of levy or otherwise of penalty would have to be necessarily examined w.r.t. the assessee’s case for the claim of expenditure in view of non-obstante clause of s.40(a)(ia), as indeed would be the case for any other provision. There is no iota of evidence on record to exhibit the services having been rendered by the different payees, and toward which the payments have ostensibly been made – it cannot be considered as an argument in favour of the assessee having made a claim for expenditure, which on facts stands proved and/or established, which would amount to turning the A.O.’s observation/argument on its head, much less of the assessee having thus proved the expenditure in terms of section 37(1), so that the only detriment to its allowability is the non-deduction of tax at source - The assessee’s claim, made before us, that the only reason for the disallowance, or its sustenance, is invocation or applicability of section 40(a)(ia) is without basis in facts. The assessee has claimed the impugned sum as expenditure u/s. 37(1) r/w s. 40(a)(ia) by depositing TDS, ostensibly as commission, for AY 2010-11, thereby debunking its claims, both qua share of profit and diversion by overriding title - The ‘acceptance’ of its’ claim for A.Y. 2010-11 by the Revenue would be of no consequence - A return processed u/s.143(1) cannot be regarded as an acceptance of the assessee’s return, the provision, w.e.f. 01.06.1999, does not even entitle the Revenue to make any prima facie adjustment to an assessee’s return - the levy of penalty u/s. 271(1)(c) of the Act as sustainable in law – Decided against assessee.
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