TMI Blog2012 (5) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... l Kr Shrawat, A Mohan Alankamony, JJ. For Appellant: Shri Samir Tekriwal, Sr. DR For Respondent: Shri Shashikant Nene, AR ORDER Per: A Mohan Alankamony: This appeal by the Revenue is directed against order of the learned CIT(A), Valsad dated 12-11-2009 for assessment year 2006-07 in Appeal No. CIT(A)/VLS/22/621/09-10, challenging the deletion of penalty u/s 271(1) (c) of the IT Act on account of disallowance made u/s 40 (a)(ia) of the IT Act of Rs.13,57,400/- for furnishing inaccurate particulars of income. 2. Briefly, the facts of the case are that the assessee filed return of income declaring income of Rs.4,93,002/- for AY 2006-07. While finalizing the assessment u/s 143(3) of the IT Act the AO made total additioin of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of payment of professional fees to S. V. Nene Co. of Rs.1,10,200/- it was submitted by the assessee that provisions of section 40(a) (ia) of the IT Act came into force for the first time for the previous year pertaining to AY 2006- 07, the assessee firm failed to comply with the same and a lenient view should be taken so far as the disallowance is concerned. In respect of penalty proceedings, it was submitted that genuineness of the expenditure is not doubted and no inaccurate particulars have been found and the explanation offered by the assessee has not been proved to be unsatisfactory and therefore, penalty should not be levied. In support of his above contentions, the assessee referred to the decisions in the case of Twi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dissatisfied with the above findings of the learned CIT(A), the Revenue is in appeal before us. 6. We have heard the learned both the parties, perused the orders of the authorities below and considered the materials on record. During the course of hearing of the appeal the learned DR relied upon the order of the authorities below. On the other hand, the learned AR referring to Para 3 and 4 of the penalty order, submitted that all the additions in respect of commission expenses of Rs.10,46,163/-, clearing and forwarding expenses of Rs.2,01,037/- and fees and legal expenses of Rs.1,10,200/- (totalling to Rs.13,57,400/-) have been disallowed holding that the assessee has violated the provisions of section 40(a) (ia) of the IT Act and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments and claimed these provisions without deducting corresponding TDS. AO disallowed this claim of assessee and levied penalty under section 271(1)(C) relying upon the decision of CIT(A) deleted the penalty Matter reached to the ITAT. After hearing the parties the ITAT held as under, ++ there is no doubt that the claim made by the assessee is in respect of business expenses. Had the assessee deducted the TDS and paid it to the Govt. amount then its deduction could be allowed. According to the assessee it has paid the tax also in the next year for the sum of Rs.7,07,294/- and even thereafter deduction was not granted to it. Ld. First Appellate Authority has accepted the plea of assessee that it was a bonafide error; ++ taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by the assessee was compensated by disallowing the expenditure. Further, the Revenue cannot penalise the assessee by levying penalty u/s 271 (1) (c) of the Act. In order to levy penalty u/s 271 (1) (c) of the Act, there has to be concealment of particulars of income of the assessee or the assessee must have furnished inaccurate particulars of its income. Present is not the case of concealment of income or it is not the case of Revenue that the assessee has furnished inaccurate particulars of income. The department has not found out that the assessee has furnished any factual incorrect information and the assessee is not guilty of furnishing of inaccurate particulars of income. In our opinion, the conditions laid down in section 271(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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