2012 (4) TMI 688 - AT - Income Tax

Summary

Issues involved: Appeals against orders of Commissioner of Income Tax (Appeals)-I, Surat for assessment year 2005-2006.

ITA No.504/Ahd/2011 (Assessee's appeal):
The only ground of appeal was the confirmation of penalty u/s.271(1)(c) of the Act. The penalty was imposed on the disallowed amount of bad debts. The assessee contended that the disallowed amount represented "late payment charges" incurred in a prior period, and thus, not allowable in the relevant year. The Tribunal noted that all material facts were disclosed by the assessee during assessment, and there was an honest difference of opinion between the assessee and the Revenue. It was held that there was no concealment of income or filing of inaccurate particulars, and thus, the penalty was cancelled.

ITA No.505/Ahd/2011 (Assessee's appeal):
The sole ground of appeal was the confirmation of penalty u/s.271(1)(c) of the Act. The penalty was imposed due to the under-valuation of closing stock of raw material. The assessee argued that the difference in valuation arose from the non-consideration of transportation and octroi expenses. The Tribunal found that the assessee had provided details of the valuation, and the explanation for the difference was bona fide. It was held that the penalty provision did not apply in this case, and thus, the penalty was cancelled.

ITA No.493/Ahd/2010 (Revenue's appeal):
The Revenue's appeal challenged the deletion of penalty u/s.271(1)(c) of the Act for non-deduction of TDS and non-disallowance of an amount u/s.40(a)(ia) of the Act. The disallowance made under Section 40(a)(ia) had become final. The Tribunal noted that necessary particulars were filed by the assessee, including the fact of non-TDS on the disputed amount. It was observed that the disallowance was technical, and there was no mala fide intent on the part of the assessee. The Tribunal upheld the CIT(A)'s decision to cancel the penalty, considering the technical nature of the disallowance and the bona fide explanation provided by the assessee.

In conclusion, the Tribunal allowed the assessee's appeals in ITA No.504/Ahd/2010 and 505/Ahd/2010, while dismissing the Revenue's appeal in ITA No.493/Ahd/2010.