TMI Blog2017 (9) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... ture Ltd., had erroneously deducted TDS on the gross billing amount including service tax. This was the reason, when higher TDS is shown in 26AS and the A.O. had taken item of service tax to the higher receipts. Thus, the assessee has explained the above difference in the receipts as per the details submitted before A.O./CIT(A) and the details noted in 26AS. The assessee also explained that since service tax is not income of the assessee, which is also not disputed by the Ld. D.R, therefore, it would not form part of total receipts of the assessee and has to be given treatment separately in the Balance Sheet. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings. Even if the addition is agreed by the assessee, if the assessee is able to explain the addition, then, penalty may not be leviable in the facts and circumstances of the case. The above facts clearly indicate that the explanation of assessee at the penalty stage was factually correct based on the material on record and assessee successfully explained the addition so made which is the basis for levy of the penalty. Since the difference is reconciled at the penalty stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to penalty under section 271(1)(c) of the I.T. Act and accordingly, levied the penalty. 3. The assessee challenged the penalty order before the Ld. CIT(A). The written submissions of the assessee is reproduced in the appellate order in which the assessee reiterated the same facts regarding service tax in respect of M/s. Pioneer Urban Land Infrastructure Ltd., who have deducted TDS on the gross billing amount including the service tax. The observations of the A.O. that assessee had not filed any documentary evidence is not factually correct, as the assessee, as per copy of the reply, had furnished a statement giving complete details in respect of reconciliation of billing amounts, work done, service tax, TDS etc., in the statement in respect of M/s. Pioneer Urban Land Infrastructure Ltd. The statement gave the break-up of service tax totaling to ₹ 38,21,458 and the total amount inclusive of service tax and billing/work done at ₹ 9,65,75,290. The gross amount/total amount as per statement and the TDS figures are verifiable and matched with 26AS, which gives complete break-up in respect of M/s. Pioneer Urban Land Infrastructure Ltd., for assessment year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and M/s. Pioneer Urban Land Infrastructure Ltd., had wrongly deducted tax on service tax of ₹ 38,21,458, resulting the same forming part of the gross amount for TDS purposes as shown in 26AS. The assessee relied upon certain case law in support of the contention that penalty is not leviable. In any case, it is highly debatable issue whether gross receipts as per 26AS which refers to TDS claim, can be made the basis for an addition. It is a bonafide mistake and would not invite levy of penalty. 4. The Ld. CIT(A) by referring to the contention of the assessee and Board Circular above, noted that since the assessee itself has conceded the addition of the aforesaid amount before A.O, therefore, penalty was correctly levied and dismissed the appeal of assessee. 5. We have heard the Learned Representatives of both the parties and perused the material on record. Learned Counsel for the Assessee reiterated the submissions made before the authorities below. Paper book, page-1 is reply before A.O. at the penalty stage supported by reconciliation of M/s. Pioneer Urban Land Infrastructure Ltd., copy of which is filed at page-2 of the paper book. Paper Book-42 is particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has filed details of liability under section 43B of the I.T. Act at page 42 of the paper book. The total of the amount unpaid on the date of tax audit has been mentioned at ₹ 1,35,91,866 which is mentioned by the A.O. in the assessment order. However, it includes the service tax of ₹ 82,04,104 which was the amount unpaid. The assessee filed reply before A.O. at the penalty stage explaining that his contractee M/s. Pioneer Urban Land Infrastructure Ltd., had erroneously deducted TDS on the gross billing amount including service tax on the total amount of ₹ 9,65,75,290. The reconciliation and details of the same are filed at page-2 of the paper book which shows the billing amount of ₹ 9,65,75,290, work done at ₹ 9,27,53,831, service tax was of ₹ 38,21,460 and the total comes to ₹ 9,65,75,290, on which, TDS @ 2% has been deducted in a sum of ₹ 19,31,506 and after other deductions, the net amount comes to ₹ 8,61,43,082. It, therefore, clearly proved that assessee filed reply before A.O. at the penalty stage supported by the reconciliation certificate. The assessee, thus, has been able to explained that his contractee M/s. Pion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully explained the addition so made which is the basis for levy of the penalty. Since the difference is reconciled at the penalty stage and claim of assessee have not been doubted or rejected, therefore, Ld. CIT(A) was not justified in confirming the levy of penalty merely because assessee conceded for addition of the amount in question. Considering the totality of the facts and circumstances of the case, we are of the view that since the assessee explained the above addition, therefore, penalty need not be imposed in the facts and circumstances of the case. Further, we may note that the A.O. in the assessment order has noted that he is satisfied that assessee-company has furnished inaccurate particulars of such income. However, in the penalty order, the A.O. levied penalty on both limbs i.e., assessee has concealed the particulars of income and furnished inaccurate particulars of income and liable to penalty under section 271(1)(c) of the I.T. Act. The ITAT, Delhi Bench in the case of Bengali Sweet Centre vs. ACIT (supra) - considering the decisions of Hon ble Karnataka High Court in the case of CIT vs. SSA s Emerand Meadows in ITA.No.380/2015 and in the case of CIT vs. Manjunath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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