Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 578 - AT - Income TaxPenalty levied u/s 271(1)(c) - disallowance u/s 40 (a)(ia) only for lack of payment of TDS while the payment was bonafide - HELD THAT:- As observed by us the commission expenses have been disallowed not for the reason that the same were either found to be bogus or unsubstantiated, but, on the ground that de hors deduction of tax at source, the same, were liable to be disallowed under Sec. 40(a)(ia) of the Act. In sum and substance, the genuineness and veracity of the commission expenses in question had not been doubted by the A.O. Though the failure on the part of the assessee to deduct tax at source which it was obligated to deduct rendered the amount in question liable for disallowance as an expenditure, but, we are unable to concur with the view taken by the lower authorities that a disallowance for such technical and venial infraction of a statutory provision would justify saddling the assessee with penalty under Sec. 271(1)(c) of the Act. In judgment of Hindustan Steel Limited Vs. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] as observed that imposition of penalty under Sec. 271(1)(c) is nothing short of a quasi criminal proceedings. In the backdrop of our aforesaid deliberations, we are of a strong conviction that no penalty under Sec. 271(1)(c) for a simpliciter disallowance under Sec.40(a)(ia) could have been validly imposed by the A.O. Be that as it may, not finding favour with the view taken by the lower authorities, we, herein, quash the penalty imposed by the A.O under Sec. 271(1)(c) of the Act. - Decided in favour of assessee.
|