TMI Blog2012 (10) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. In this case disallowance has been made only on estimate basis. In the preceding year this disallowance was only 20% and no penalty was imposed. Thus on the facts and circumstances of this case the conduct of the assessee cannot be said to be contumacious so as to warrant levy of penalty u/s. 271(1)(c) - mensrea was a essential requirement of penalty u/s 271(1)(c) as decided in Dilip N. Shroff Versus Joint Commissioner of Income-tax And Another [2007 (5) TMI 198 - SUPREME COURT] - in favour of assessee. - I.T.A. No. 5149/Del/2011 - - - Dated:- 19-10-2012 - SHRI U.B.S. BEDI, AND SHRI SHAMIM YAHYA, JJ. Assessee by : Sh. Sanjeev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 45,53,750/-, the Assessing Officer had completed the assessment on an income of Rs. 59,81,540/- vide assessment order dated 7.12.2006 which included disallowances of Rs. 7,31,363/- being 50% of foreign travel expenses incurred at Rs. 14,62,727/- and disallowance u/s. 40A(3) amounting to Rs. 1,81,654/-. Pursuant to the above disallowances, Assessing Officer also initiated penalty proceedings in this case. Assessing Officer levied the penalty on account of disallowance u/s. 40A(3) as well as disallowance on foreign travel expenses. Upon assessee s appeal as regards disallowance u/s. 40A(3), Ld. Commissioner of Income Tax (A) deleted the penalty. 4. On the issue of disallowance on foreign travelling expenses, Assessing Officer noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the assessee spent a sum of Rs. 14,62,727/- for the visits of the Directors to South Asian Countries. It has further been submitted that there was nothing wrong on the part of the four Directors for travelling on tourist visas to save substantial amount payable to obtain business visas. Further, it has been submitted that both the ladies who were working as Directors had been paid salary @ Rs. 96000/- per annum each during this year which stood allowed as in the preceding year. It has further been submitted that in the preceding assessment year Assessing Officer has disallowed 50% of similar foreign travel expenses which was reduced to 20% . In appeal this disallowance was confirmed by the ITAT. However, no penalty in this case wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In this regard, we place reliance from the Apex Court decision rendered by a larger Bench comprising of three of their Lordships in the case of Hindustan Steel vs. State of Orissa in 83 ITR 26 wherein it was held that An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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