9911796707
|
Home
Issues involved: Penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961.
Summary: Issue 1: Penalty u/s 271(1)(c) of the Act The appellant, a company engaged in manufacturing automobile spare parts, filed a return of income showing a loss for the year. The Assessing Officer disallowed an amount under section 43B(e) of the Act related to outstanding interest to a scheduled bank, resulting in a penalty of Rs. 13,06,365 being imposed. The appellant contended that the penalty was not justified as the disallowance was due to inadvertence by the auditor, the directors were not aware of legal provisions, and there was no intention to evade taxes. The appellant cited relevant case laws to support their argument. The Revenue argued that the penalty was rightly confirmed as the bonafides of the claim were not established. The Tribunal noted that making an unsustainable claim does not automatically lead to a penalty under section 271(1)(c) of the Act. Issue 2: Merits of the case The Tribunal found that the disallowance made under section 43B(e) of the Act was a result of the appellant's error in not applying the provision and making the disallowance in the return of income. The appellant's explanation regarding the omission was considered, including the lack of awareness of legal provisions by the directors. Despite the disallowance, the assessed income remained a loss. The Tribunal concluded that the explanation provided by the appellant was bonafide, and the disallowance did not amount to concealment or furnishing inaccurate particulars of income under section 271(1)(c) of the Act. Decision: The Tribunal upheld the appellant's argument and set aside the penalty imposed under section 271(1)(c) of the Act, directing the Assessing Officer to delete the penalty amounting to Rs. 13,06,365.
|
