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Issues Involved:
The judgment involves the confirmation of penalty u/s 271(1)(c) of the IT Act by the Ld. Commissioner of Income Tax (Appeals) for the assessment year 2006-07. Disallowance of Payment of ROC Fee: The Assessee claimed deduction for payment of ROC fee for increase in authorized capital under section 35D, but it was disallowed as there is no concept of deferred revenue expenditure in the Income Tax Act for an existing company. Disallowance of Delayed Payment of Employee's Contribution to PF and ESI: The Assessee's explanation for delayed payments was based on circulars providing grace periods, but the Assessing Officer held that employees' contributions stand on a different footing than the sums referred to in Section 43B of the IT Act. Disallowance u/s 14A: The Assessing Officer disallowed the claim of exempt dividend income under section 10(34) by applying Rule 8D of the Income Tax Rules. Penalty Levied: A penalty of &8377; 85,530 was levied against the disallowances, which was confirmed by the Ld. Commissioner of Income Tax (Appeals) based on the Assessee's acceptance of the additions made. Judgment: The ITAT Delhi set aside the penalty orders, ruling that the Assessee cannot be held guilty for concealment or furnishing inaccurate particulars regarding the disallowances. The Tribunal found no concealment in the delayed payments towards PF and ESI contributions, and the disallowance u/s 14A was deemed inapplicable as Rule 8D was notified for a later assessment year. The Tribunal cited legal precedents emphasizing that penalties should not be imposed for technical breaches or bonafide beliefs, ultimately allowing the Assessee's appeal and deleting the penalty.
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