2009 (7) TMI 1266 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s 271(1)(c) of the Income Tax Act, 1961 for non-deduction of tax at source on job charges.

Summary:
1. The assessee did not deduct tax at source on job charges, leading to penalty proceedings u/s 271(1)(c).
2. The AO disallowed job charges under section 40(a)(ia) and initiated penalty proceedings.
3. The CIT(A) upheld the penalty, citing inaccurate particulars of income and lack of satisfactory explanation.
4. The assessee appealed, arguing genuine expenditure and lack of intentional concealment.
5. The Tribunal found that the assessee disclosed all facts during assessment proceedings and no new information was discovered later.
6. Assessment and penalty proceedings are distinct, and the Tribunal reevaluated the matter.
7. The disallowance of job charges did not automatically imply concealment of income by the assessee.
8. Considering the explanation given by the assessee, the Tribunal set aside the penalty imposed by the AO.
9. The appeal was allowed, and the penalty under section 271(1)(c) was quashed.

This judgment highlights the importance of disclosing all relevant facts during assessment proceedings and distinguishes between disallowances in assessment and penalties under section 271(1)(c) of the Income Tax Act.