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2023 (6) TMI 88 - AT - Income TaxPenalty u/s 271(1) (c) - disallowance of Impact Fees, interest on late payment of TDS and payment towards material purchase - HELD THAT - Issue under consideration is no longer res integra, and the amount Impex Fees paid to SMC is allowable as business expense. Impex Fees is not penal in nature, thus there is no any violation of any law, for that reliance can be placed on the order of Shree Khodiyar Corporation 2009 (9) TMI 870 - ITAT AHMEDABAD Penalty should not be levied on account of technical error which was committed by the assessee and there was no intention to furnish inaccurate particulars of income for that reliance can be placed on the judgment of M/s Price Waterhouse Copers ( P) Ltd 2012 (9) TMI 775 - SUPREME COURT wherein it was held that imposition of penalty would be unwarranted in a case, where the assessee has committed inadvertently and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars of income. We delete the penalty sustained by ld CIT(A). Decided in favour of assessee.
Issues Involved:
The issues involved in the judgment are the imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 for furnishing inaccurate particulars of income and the subsequent appeal against the penalty order. Issue 1: Imposition of Penalty under Section 271(1)(c) of the Income Tax Act: The appellant, a private limited company, filed its return of income for Assessment Year 2014-15, declaring total income. During assessment, it was observed that the company had claimed Impex Fees for regularization of unauthorized construction, which was deemed penal in nature and disallowed as expenditure. The Assessing Officer initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income, ultimately imposing a penalty of Rs.4,69,761. The appellant appealed the penalty order before the Ld. CIT(A), who reduced the penalty to Rs.1,56,587. The appellant argued that the Impex Fees were a normal business expenditure and not penal in nature, and there was no intention to furnish inaccurate particulars of income. The Revenue contended that the penalty was justified. The Tribunal noted that the Impex Fees were allowable as a business expense, citing a previous case precedent, and held that the penalty should not be levied for inadvertent errors without intent to conceal income or furnish inaccurate particulars. Issue 2: Appeal Against the Penalty Order: The appellant challenged the penalty order before the Tribunal, arguing that the Impex Fees were not penal in nature and there was no intention to furnish inaccurate particulars of income. The Tribunal considered the arguments of both parties and referred to relevant case law to support its decision. Relying on previous judgments and the principle that penalties should not be imposed for inadvertent errors made without intent to conceal income, the Tribunal deleted the penalty sustained by the Ld. CIT(A) and allowed the appeal filed by the assessee. Separate Judgement: The judgment was pronounced on 31/05/2023 by the Tribunal, with the result being placed on the notice board for public information.
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