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2018 (3) TMI 36 - ITAT DELHILevy of penalty u/s 271(1)(c) - non- deduction of TDS on interest paid to Banks and NBFCs - Held that:- Merely because the assessee-company had claimed deduction of expenditure without deducting TDS on interest payment which was not accepted by the Revenue, by itself, would not attract the levy of penalty. Mere disallowance of interest for non-deduction of TDS by itself may not be a ground to levy of penalty against the assessee-company. A.O. in the assessment order has initiated the penalty proceedings for furnishing inaccurate particulars of income. In the penalty order, the A.O. levied the penalty for concealment of income within the meaning of Explanation-1 to Section 271(1)(c). The A.O. did not initiate the penalty proceedings for concealment of income. Explanation-1 to Section 271(1)(c) would apply in the case of concealment of income and not in the case of furnishing of inaccurate particulars of income. Therefore, there is a contradictory findings given by the A.O. in the assessment order as well as in the penalty order. Merely because the assessee-company did not challenge the addition before Ld. CIT(A), is no ground to levy penalty against the assessee-company because it is well settled law that assessment and penalty proceedings are distinct and independent proceedings. It is not automatic in each and every case to levy penalty, if addition is sustained on merits. - Decided in favour of assessee.
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