Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 1309 - AT - Income TaxPenalty u/s 271(1)(c) - Addition of interest received on fixed deposit and interest received from other parties - HELD THAT:- Undisputedly, in the assessment order, while initiating penalty proceedings under section 271(1)(c) in respect of the aforesaid addition, AO has not recorded any satisfaction with regard to the exact offence committed by the assessee requiring imposition of penalty under section 271(1)(c) - AO has simply mentioned “initiate penalty u/s 271(1)(c)”. He has not stated whether initiation of penalty proceeding is for furnishing of inaccurate particulars of income or for concealment of income or for both. Only in the penalty order passed under section 271(1)(c), he has stated that penalty is imposed for furnishing inaccurate particulars of income. AO has failed to record any satisfaction with regard to the nature of offence committed by the assessee requiring imposition of penalty under section 271(1)(c) of the Act. For this reason alone, the order imposing penalty under section 271(1)(c) of the Act is unsustainable. Disputed addition on the basis of which penalty imposed is on account of deduction claimed towards interest paid to partners @ 15% as against the admissible rate of interest of 12% - addition made is on account of differential interest amounting to 3% - the contention of the assessee is that the claim of deduction of interest payment @ 15% is a bona fide error since in no other assessment year the assessee has claimed such deduction at a higher rate. We find the aforesaid explanation of the assessee plausible. Moreover, full particulars regarding the payment of interest were available with the Assessing Officer. It is also not the case of the AO that interest payment to partners is inadmissible. In the aforesaid view of the matter, we hold that the assessee cannot be accused of furnishing inaccurate particulars of income so as to attract the provisions of section 271(1)(c)
|