TMI Blog2018 (12) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has to pay the said amount on or before the due date of filing the return of income under section 139(1). Once the claim of the assessee is not found to be bogus or false but because of the reason that the assessee could not pay the amount as required under section 43B, the same was to be disallowed. The disallowance under section 43B is only because of technical reason of non payment of the amount and not because of the reason that the claim itself is not an allowable claim - there will be no revenue effect due to the disallowance made for the year under consideration and the claim was allowed in the subsequent year except on account of interest. As relevant details and facts were disclosed by the assessee and available be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee has shown VAT payable at ₹ 5,55,346/- and assessee has not filed the proof of payment of the same. Accordingly, the AO asked the assessee to furnish the details. In response, the assessee filed revised computation of income disallowing the VAT payable of ₹ 5,55,346/- under section 43B of the Act. The AO completed the assessment by making an addition on account of disallowance under section 43B of ₹ 5,55,346/-. The AO initiated the penalty proceedings under section 271(1)(c) and levied the penalty of ₹ 1,72,000/- being 100% of tax sought to be evaded vide order dated 27.06.2015. The assessee challenged the order of the AO passed under section 271(1)(c) before the ld. CIT (A), however, could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) and submitted that once the assessee has disclosed all the relevant facts and details relating to the issue and books of accounts were accepted by the AO which were duly audited, then the disallowance made under section 43B would not attract the penalty proceedings. The ld. A/R has also relied upon the decision of Kolkata Benches of the Tribunal dated 16.03.2016 in the case of DCIT vs. Budge Budge Jute Ltd. in ITA No. 979/Kol/2013 and submitted that in identical facts the Tribunal has confirmed the order of the ld. CIT (A) deleting the penalty levied under section 271(1)(c) on account of disallowance made under section 43B of the Act. 3.1 On the other hand, the ld. D/R has submitted that it is not a voluntary disallowance made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is not found to be bogus or false but because of the reason that the assessee could not pay the amount as required under section 43B, the same was to be disallowed. The disallowance under section 43B is only because of technical reason of non payment of the amount and not because of the reason that the claim itself is not an allowable claim. Further, the AO has not disputed the fact that the assessee subsequently paid the said amount and claimed the same in the subsequent year which was allowed by the AO. Therefore, there will be no revenue effect due to the disallowance made for the year under consideration and the claim was allowed in the subsequent year except on account of interest. The Kolkata Benches of the Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. It was tried to be suggested that section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Legislature. In this behalf the observations of this court made in Sree Krishna Electricals v. State of Tamil Nadu [2009} 23 VST 249 as regards the penalty are apposite. In the aforementioned decision which pertained to the penalty proceedings under the Tamil Nadu General Sales Tax Act, the court had found that the authorities below had found that there were some incorrect statements made in the return. However, the said transactions were reflected in the accounts of the assessee. This court, therefore, observed (page 251) : So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's account books. Where certain items which are not included i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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