TMI Blog2010 (9) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay penalty under Section 271(1)(c) of Act - appeal is dismissed - 1471/2010 - - - Dated:- 28-9-2010 - CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN Mr. Sanjeev Sabharwal, Advocate Mr. Ajay Vohra, Advocate with Ms. Kavita Jha, Advocate MANMOHAN, J. 1. The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity "Act") challenging the order dated 09th October, 2009 passed by the Income Tax Appellate Tribunal (in short "Tribunal") in ITA No. 2658/Del/2008, for the Assessment Year 1999-2000. 2. Mr. Sanjeev Sabharwal, learned counsel for the revenue submitted that the Tribunal had erred in law in dismissing the revenue's appeal whereby the penalty under Section 271(1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the assessee to either conceal particulars of income or furnish inaccurate particulars thereof, while claiming the expenses of Rs.1,03,684/- on the basis of unaudited statement of accounts provided by the operator of PSC. Hence, in the facts and circumstances, no penalty under Section 271(1)(c) of the Act is eligible on this term. Consequently, the orders of tax authorities below on this count are set aside and the Assessing Officer is directed to delete the impugned penalty amount on this item. xxx xxx xxx 9. According to learned AR of the assessee, the impugned amount of Rs.16,398/- disallowable under section 43B of the Act was not added back in the return of income for the relevant previous year as the tax audit report p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owable deduction against profit of the business. In this view of the matter, we are of the opinion that the interest payable for late deposit of service tax, being an admissible deduction, the disallowance made by the Assessing Officer, even if not challenged by the assessee, does not call for imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961. Accordingly, the orders of tax authorities below in the regard are set aside and the Assessing Officer is directed to delete the impugned penalty amount imposed under Section 271(1)(c) of the Income Tax Act, 1961 on this count. xxx xxx xxx 12. The issue whether such disallowable item of interest under section 10A of the Income Tax Act, 1961 calls for penalty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of Dharmendra Textile Processors Others (supra) does not support the case of the revenue as the decision is that the matter has to be decided in the light of statutory language contained in section 271(1)(c) and Explanation offered by the assessee could not be said to be mala fide. Therefore, we are of the view that the learned CIT(A) was right in deleting the penalty." 13. ……..Hence, following the decision (supra), it is held that the tax authorities below erred in imposing/sustaining the impugned penalty amount levied on the disallowable interest amounting to Rs.1,67,822/- under section 10A of the Income Tax Act, 1961…….. xxx xxx xxx 15. The issue whether disallowance made by the Assessing Officer un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not based on a bona fide belief entertained by it having regard to the nature of the relevant transactions as well as the said change in the head of income by the AO from "business loss" to "speculative loss" had made the assessee disentitled to thereby resulted in addition to the total income of the assessee, the question needs to be considered here is whether such a mere change in the head of the income would amount to concealment by the assessee as envisaged in section 271(1)(c) of the Income Tax Act, 1961. It is observed that this question has been answered by the Hon'ble Delhi High Court in favour of the assessee in its judgment in the case of Auric Investments Securities Ltd. (supra) cited by the learned counsel for the assessee whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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