TMI Blog2011 (1) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... able income were made on account of the following :- i) Disallowance of payment of ROC fee of ₹ 82,500/-. ii) Disallowance of delayed payment of employee s contribution to PF and ESI of ₹ 1,35,730/-. iii) Disallowance u/s. 14A of ₹ 35,872/-. 3.1 Disallowance of payment of ROC fee of ₹ 82,500/-:- Assessee s explanation in this regard were as under:- As regards the query pertaining to deductibility of expenses on payment of ROC fee for increase in authorized capital as part of preliminary expenditure allowable u/s 35D. We have to submit that this expenditure is a part of total expenditure incurred in the scheme if expansion of our business for which increased capital fund are required. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day, due to which EPF was deposited on the next working day i.e. on 16.01.2006. Moreover, we would like to submit that as per Circular No. E128(1)60-III dated 19.3.1964 as modified by Circular E11/128/73 dated 24.10.1973 issued by the concerned authorities granting 5 days of grace period for payment of PF Contribution. The due date will be determined accordingly. Keeping in view the abovementioned circular the last date for deposit of EPF comes to be 20.01.2006. Hence keeping in view the abovementioned facts, we can say that there is no delay in depositing the EPF for the month of December, 2005. 4.1 However, these were not accepted by the Assessing Officer . It was held by the Assessing Officer that employees contribution towards PF an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, it cannot attract levy of penalty u/s 271(1)(c). 9.1 As regards disallowance of delayed payment towards PF and ESI contribution amounting to ₹ 1,35,730/-. We find that there is no concealment in this regard also. The payment made were duly claimed in the profit and loss account and as per recent decision it has been held that employees contributions towards PF and ESI, even if delayed will be treated at the same footing as that of employer contribution. Hence, levy of penalty u/s 271(1)(c) in this regard also is not sustainable. 9.2 As regards disallowance us/ 14A of ₹ 35872/-, we find that the same has been done by applying Rule 8D. We find that Hon ble Mumbai High Court in the case of Godrej Boyce Mfg. Co. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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