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2014 (1) TMI 1072 - ITAT MUMBAIPenalty u/s 271(1)(c) - Held that:- All the details of the payments made by assessee to its sub-contractors have been disclosed in the return(s) filed but the disallowance has been made on the basis of particulars filed by assessee as the assessee failed to deduct TDS - Penalty u/s 271(1)( c) of the Act is leviable only if the person has concealed the particulars of his income or has furnished inaccurate particulars of such income as per the expression used in Clause (c) of sub-clause (iii) of section 271(1) of the Act - The offence of concealment is direct attempt to hide an item of income or derive thereof from the department to avoid payment of tax liability as per the provisions of Act - There should be an attempt on the part of the assessee to conceal the facts relating to its income or furnishing inaccurate particulars of income to avoid payment of tax - In assessee's case, nothing has been stated or brought on record by the department that the assessee had hidden the facts from the revenue authority or the details of payment received from the contractor or of payment made to sub-contractor - Nor there is any facts brought on record by the department that the payments claim to have been made by the assessee to sub-contractor and /or payments of rent were in any way bogus or inflated - Following CIT V/s Reliance Petroproducts (P.) Ltd [2010 (3) TMI 80 - SUPREME COURT] - If the assessee has not concealed any material fact or the factual information given by him is not found to be incorrect, he will not be liable for imposition of penalty u/s 271(1)(c) of the Act, even if the claim made by him is unsustainable in law provided he substantiated the explanation offered by him or explanation even if not substantiated, is found to be bonafide - The provision of section 40(a)(ia) are deeming provision which creates legal fiction and that legal fiction cannot be extended beyond the disallowance of expenditure - It cannot be applied for invoking the provisions of section 271(1)(c) of the Act for levying penalty for concealment of income or furnishing inaccurate particulars of income - Decided in favour of assessee.
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