TMI Blog2018 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... lment of income within the meaning of Explanation-1 to Section 271(1)(c). The A.O. did not initiate the penalty proceedings for concealment of income. Explanation-1 to Section 271(1)(c) would apply in the case of concealment of income and not in the case of furnishing of inaccurate particulars of income. Therefore, there is a contradictory findings given by the A.O. in the assessment order as well as in the penalty order. Merely because the assessee-company did not challenge the addition before Ld. CIT(A), is no ground to levy penalty against the assessee-company because it is well settled law that assessment and penalty proceedings are distinct and independent proceedings. It is not automatic in each and every case to levy penalty, if addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. initiated the penalty proceedings for furnishing inaccurate particulars of income. The A.O. vide separate order levied penalty on this addition against the assessee-company, the particulars of which, the assessee-company has concealed within the meaning of Explanation-1 to Section 271(1)(c) of the I.T. Act. 3. The assessee-company challenged the penalty order before the Ld. CIT(A). It was submitted that assessee-company has not deducted tax at source on the payments made to four reputed banks/NBFC Sector companies amounting to ₹ 7,71,859. The assessee-company was under bonafide belief that the TDS provisions are not attracted on interest payment to Banks and NBFC companies under section 194A of the I.T. Act. In fact, Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not accepted or was not acceptable to the Revenue, that, by itself, would not attract the penalty under section 271(1)(c) of the I.T. Act. The assessee-company also relied upon other decisions which are reproduced in the impugned order. The assessee-company, therefore, pleaded that no penalty be levied. It was further submitted that assessee-company did not file any appeal against the addition but penalty proceedings are different from the assessment proceedings and are independent. 4. The Ld. CIT(A), however, did not accept the contention of assessee-company and held that provisions of law are clear and assessee-company is required to deduct TDS on interest paid to NBFC Companies. It was noted that TDS details are not shown in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the decision of the Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd., (supra). He has also relied upon the order of ITAT, Ahmedabad Bench in the case of ITO vs. Shri Vishal Madusudanbhai Chokshi 2014 (1) TMI 910 in which it was held as under : Deletion of penalty u/s 271(1 )(c) of the Act - Held that:- The Assessing Officer has nowhere alleged that the payment of interest made to finance company on which the TDS was deductable is non genuine or bogus - It is also a fact that there is nothing on record or alleged that the payment of interest is excessive or unreasonable - The disallowance has been made for non-deduction of TDS in view of provisions of section 40(a)(ia) - The legal fiction created by sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resultantly, when there is no concealment nor any occasion of furnishing inaccurate particulars to bonafide mistake, Tribunal rightly uphold the order of CIT(A), deleting the penalty, therefore, this Tax Appeal merits no consideration as question of law is to be determined. Hence, same is dismissed. . 5.2. Learned Counsel for the Assessee, therefore, submitted that penalty is not leviable. 6. On the other hand, Ld. D.R. relied upon the orders of the authorities below and submitted that only small percentage of returns are taken-up for scrutiny. If the assessee-company makes a claim, which is not only incorrect, but is also wholly without any basis and the explanation furnished by the assessee-company for making such claim, is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were produced before A.O. The Auditor, therefore, did not point-out the TDS default to the assessee-company. It is not in dispute that payment of interest made to Bank and NBFC were genuine and not excessive or unreasonable interest was found. These facts clearly show that it is not a case of furnishing of inaccurate particulars of income. The A.O. levied the penalty merely because of non-deduction of TDS on interest payments. Therefore, the decisions relied upon by the Learned Counsel for the Assessee in the cases of ITO vs. Shri Vishal Madhushdnanhai Chokshi and CIT vs. M/s. Venus Engineers (supra), applied to the facts and circumstances of the case. It is a case where disallowance is made because of non- deduction of TDS. Therefore, de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
