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TMI Blog2016 (2) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of Rs. 1,08,150/- u/sec. 27(1)(c) of the Income Tax Act, 1961 which the learned Assessing Officer has imposed in this case." "That the Hon'ble Commissioner of Income Tax (Appeals) while upholding the aforesaid penalty did not appreciate the reasonable cause put forth before him regarding the ignorance of the assessee about the provisions of section 40(a)(ia) of the Act and thus the order passed by the Hon'ble Commissioner of Income Tax (Appeals) are merely based on conjectures and surmises which is bad in law." 1. Briefly stated the facts giving rise to this appeal are that the assessee filed written of income on 26.09.2009 declaring an income of Rs. 6,36,140/- and the same was processed and assessment was completed under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ically attract penalty under section 271(1)(c) of the Act. Further placing reliance on the orders of the ITAT Delhi F Bench in the case of new Horizon India Ltd. Vs. DCIT reported as (2011) 12 ITR (Trib) 332 (ITAT-Dell) submitted that the assessee could not be held to be guilty of concealment of furnishing of income on failure to deduct tax at source as the assessee is disclosing amounts in the accounts then the case of concealment cannot be established against the essessee. The Ld AR further placing reliance on the decision of ITAT Delhi SMC-1 Bench order dated 21.10.2015 in the case of M/ Syndicate Labels Vs ACIT in ITA No. 4386/Del/2014 and submitted that when the dispute is only about deduction or non deduction of tax from the payment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance has been made under section 40(a)(ia) of the Act, for non deduction of tax at source from payments made or credited to the respective payees and the assessee made a proper disclosure about the expenses claimed by it as deduction which was neither bogus nor otherwise non deductible then penalty under section 271(1)(c) of the Act is not validly imposable. The relevant operative part of the tribunal order (Supra) is being reproduced below for the sake completeness in our conclusion: "After considering rival submissions and perusing relevant material on record, it is observed that the instant penalty has been imposed only in respect of disallowance u/s 40(a)(ia) of the Act. The assessee entertained a bona-fide belief about the non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 40(a)(ia) of the Act. Overturning the impugned order, I order for the deletion of the instance penalty." 5. In the light of foregoing discussion, in our considered view the facts and circumstances of the present case are quite similar to the case of M/s Syndicate Labels Vs. ACIT (Supra) and thus grounds of assessee are squarely covered in its favour by the said order of the tribunal and our conclusion also gets strong support from the decision Hon'ble Apex Court in the case of CIT Vs Reliance Petroproducts (Supra) hence, we allow both the grounds of appeal and consequently the AO is directed to delete the impugned penalty imposed under section 271(1)(c) of the Act. In the result, appeal of the assessee is allowed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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