TMI Blog2023 (1) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... unds, the assessee has also alleged that notice issued for imposition of penalty does not specify the nature of default and thus entire penalty proceedings is required to be quashed at the threshold. No penalty notice is available on record. No such objection was raised before lower authorities either. We thus are in no position to express our view on such contentions - Appeal of the assessee is dismissed exparte. - I.T.A No.7822/DEL/2019 - - - Dated:- 23-1-2023 - Shri Chandra Mohan Garg, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Appellant : None For the Respondent : Shri Kanav Bali, Sr.DR ORDER PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been directed against the appellate order of the Commissioner of Income Tax (Appeals)-I, New Delhi [ CIT(A) in short] dated 26.08.2019 arising from penalty order passed by the Assessing Officer dated 19.01.2018 wherein the penalty of Rs.30,53,710/- on the quantum additions of Rs.98,82,556/- sustained in the appellate proceedings was imposed on account of certain disallowances and additions. 2. In the first appeal, the CIT(A) noticed that penalty under Section 271(1)(c) was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Rs. 3,65,546/- by reducing addition made under Rule 8D (2)(iii) Disallowance of interest (Rs. 16,90,392) and loan processing fee (Rs. 43,82,040) for money borrowed and not used for the business of the assessee: Rs. 60,72,432/- Appeal on this ground dismissed and addition increased to Rs. 79,08,068/- Addition for excess of money received as share application money over the fair market value of shares: Rs. 34,38,000/- Appeal on this ground dismissed Disallowance of interest on late deposit of TDS: Rs. 6,578/- No appeal filed on this ground 7.2 The appellant filed further appeal before the Income Tax Appellate Tribunal against the order of Ld. C1T (Appeals). Hon'ble ITAT, Delhi has upheld the appellate order passed by Ld. CIT(A). In the present case, the appellant earned dividend income of Rs. 54,84,140/- during the year from investment in shares which was claimed as exempt. The assessing officer made the addition of Rs. 21,33,361/- u/s 14A for expenses relating to exempt incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.6,758/- Total Rs.98,82,556/- In the penalty order the AO has held that the appellant is liable for penalty u/s 271(1)(c) of the Income Tax Act, 1961 of an amount equal to the amount of tax sought to be evaded on income of Rs. 98,82,556/- about which inaccurate particulars were furnished by the appellant. The penalty of Rs. 30,53,710/- has been levied by the AO u/s. 271(1)(c) in the instant case. 7.3 Considering the facts of the case, I am of the view that no penalty should be imposed on disallowance u/s. 14A. Section 56(2)(viib) is an anti abuse provision and any addition u/s. 56(2)(viib) is liable for penalty u/s. 271(1)(c). As regards the disallowance of interest, it is found that the appellant company has taken interest bearing loan and given it as interest free loan to its sister concerns. The appellant has also paid huge processing fee for raising these loans. However, the loan taken by the appellant company was not utilized for the purpose of the business of the appellant company. These loans were diverted to sister concerns without charging any interest or fees. The appellant has incurred the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of inaccurate particulars and, hence, levy of penalty was justified - Held, yes [Para 6] [In favour of revenue]. [2013] 37 taxmann.com 347 (Delhi), HIGH COURT OF DELHI, Commissioner of Income-tax v. HCIL Kalindee Arsspl. Section 271(1)(c), read with section 80-IA, of the Income-tax Act, 1961 - Penalty - For concealment of income [Wrong claim under section 80-IA] - Assessment year 2007-08 - Assessee's claim for deduction under section 80-IA was rejected by Assessing Officer on ground that assessee was executing works contract - Assessing Officer also Imposed penalty under section 271(1)(c) - Tribunal deleted penalty holding that claim for deduction under section 80IA was duly supported by certificate of chartered accountant in prescribed form and, hence, bona fide - Whether merely because assessee complied with statutory procedural requirement of filing prescribed form and certificate of Chartered Accountant, it could not absolve assessee of its liability, if act or attempt in claiming. deduction was not bona fide - Held, yes -Whether to show and establish bona fides, assessee had to show some more 'tangible material' or basis as to why a clear statutory pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance of Rs 95,17,010/-. In view of it, it is held that the provisions of section 271(1)(c) are attracted to the disallowance of Rs 95,17,010/- for furnishing inaccurate particulars of income as discussed above in the instant case. Accordingly, the penalty of Rs 29,40,760/- imposed u/s 271 (1)(c) is upheld in the instant case and the appellant gets a relief of Rs 1,12,950/-. Ground No. 2 is partly allowed. 7.4 Ground No. 1 3 are general in nature and do not require any adjudication. 8. In the result, appeal of appellant bearing Appeal. No. 506/17-18 is partly allowed. 7. Before us, none appeared as noted above. On the perusal of the submissions made by the CIT(A), it is noted that the assessee has failed to place cogent evidence that interest incurred on loan and advances given to its sister concern were incurred for the business purposes. The loan and allowances were given without charging any interest which has resulted in incurring burden on account of advances given to sister concern in violation of Section 36(1)(iii) of the Act. Likewise, before the CIT(A), the assessee has failed to defend inapplicability of Section 56(2)(viib) of the Act. It is not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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