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2016 (9) TMI 14 - ITAT DELHIPenalty u/s 271(1)(c) - salary that was omitted to be declared in the return of income - Held that:- As observed that the tax has been deducted by the previous employers of the assessee to the extent of ₹ 7,88,334/-. On perusal of the return of income filed by the assessee, it is observed that the assessee has not claimed the TDS so deducted by previous employers and has only claimed the TDS in respect of employer from whom he drew his last salary during the end of the financial year relevant to Assessment Year under consideration. In such a situation, the possibility of bona fide mistake cannot be overruled. Ld. Assessing Officer has also not made any case against the assessee in respect of TDS not being deducted against the salary drawn during the year under consideration being insufficient. It is also observed that the assessee had fully cooperated during the assessment proceedings and had submitted sufficient details to establish the bona fide mistake that was committed inadvertently. However, the Assessing Officer did not agree to the explanation of the assessee and he initiated penalty proceedings u/s 271(1)(c) of the Act for filing inaccurate particulars of income. In our considered opinion, the assessee cannot be made liable for penalty as there is a bona fide mistake of omission in not showing the salary received from the previous employers. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasicriminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. From the ROI filed by the assessee, it has been demonstrated that the assessee has failed to claim the TDS deducted by the earlier employers. The conduct of the assessee supports the explanation tendered and therefore, a deliberate omission to include the salary received from previous employer cannot be established.Accordingly, we delete the penalty levied by the Assessing Officer in respect of omission to disclose the salary received from the previous employers on which TDS had already been deducted by them. Interest on housing loan - Held that:- From the Paper Book filed before us, the assessee has referred page 22 which is the certificate of interest issued by HDFC bank. It has been submitted that the housing loan is in the joint name of his wife as the house property was purchased in the joint name. However Ld. A.R. submitted that the interest was paid by the assessee from his account; therefore the assessee has claimed deduction of total amount in his return of income. Ld. A.R. submitted that the assessee was under the bona fide belief that as he was paying the interest, the deduction should also be claimed by him alone. We find that explanation given by the assessee has not been accepted by the Ld. A.O. for which a penalty cannot believed u/s 271(1)(c) of the Act. Reliance has been placed on the decision of Hon'ble Supreme Court in the case of Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT] which hold that mere disallowance of any claim will not automatically lead to levy of penalty u/s 271(1)(c) of the Act. Further, there is no material that has been brought on record by the Ld. A.O. to prove that the assessee has consciously concealed any particulars pertaining to his income or has supplied inaccurate particulars deliberately. We are therefore, inclined to delete the penalty levied by the A.O. in respect of interest on housing loan. In respect of interest earned by the assessee on saving bank account, the disallowance that has been made by the Assessing Officer is to the extent of ₹ 12,863/-. Ld. A.R. has submitted that the assessee has been filing his return without any professional assistance and was not aware about the interests so earned on saving bank is taxable in the hands of the assessee. Therefore, explanation advanced by the assessee cannot be accepted as such interest on saving bank accounts is credited to the assessee’s bank account during every financial year. It cannot be a case where assessee has been consistently filing his returns personally was ignorant that interest so earned from saving bank being taxable. The explanation tendered by the assessee is not acceptable for the simple reason that the assessee has been filing his return every year and interest on saving bank account accrues to assessee in every assessment year. We, therefore, upheld the penalty levied by the Ld. A.O. on such interest on saving bank account. Credit card expenses - Held that:- As observed from the assessment order that the assessee had made expenses of ₹ 3,12,137/- as seen from the AIR information, through credit card. On calling for the details by Ld. A.O., assessee submitted the bank account and was not able to submit the credit card statement for verification of such expenses. Ld. A.O. has verified the expense amounting to ₹ 1,50,843/- which appears in the bank statement. As the remaining expense have been ₹ 1,61,294/- for the expenses made through credit card which was not verifiable, the same was added to the income of the assessee. It has been observed that the addition had been made for want of evidence / explanation. As the assessee has not submitted proper explanation in support of expenses made through credit card. We do not find any infirmity in levying penalty on such amount. In view of above, we confirm the penalty levied by the Assessing Officer for submitting wrong explanation in respect of credit card expenses. Decided partly in favour of assessee.
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