2012 (9) TMI 1204 - AT - Income Tax

Summary

Issues involved: Appeal against order of Ld. Commissioner of Income Tax (Appeals)-VI, New Delhi dated 14.11.2011 pertaining to assessment year 2008-09.

Summary:

Issue 1: Disallowance of provision for Auditor's Remuneration under section 40(a)(ia) of the Income Tax Act, 1961

The Assessing Officer disallowed &8377; 11,23,600/- on account of provision for Auditor's Remuneration payable for non-deduction of TDS as mandated by section 40(a)(ia) of the Act. The assessee admitted the delay in TDS payments and requested the disallowance. The Assessing Officer also imposed a penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. The Ld. Commissioner of Income Tax (A) upheld the disallowance but held that penalty cannot be imposed as there was no tax sought to be evaded, relying on the decision in the case of Nalwa Sons Investment Limited 327 ITR 543. The ITAT Delhi upheld the decision of the Ld. Commissioner of Income Tax (A) based on the legal provisions and precedents, stating that penalty cannot be imposed based on disallowances made under regular provisions when income is assessed under MAT.

Decision: The ITAT Delhi dismissed the appeal filed by the Revenue, upholding the order of the Ld. Commissioner of Income Tax (A) regarding the disallowance of provision for Auditor's Remuneration and the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961.