2020 (10) TMI 1126 - AT - Income Tax

Penalty u/s.271(1)(c) - disallowance made u/s.40A(3) - HELD THAT - Assessee filed particulars involving claim u/s.40A(3) but however AO could not find the same as acceptable and proceeded to make disallowance u/s.40A(3) - penalty could not be levied on such disallowance made u/s.40A(3) of the Act only on the basis that the assessee made wrong claim. - Decided in favour of assessee. Penalty imposed on account of addition made u/s.69C - HELD THAT - We find nothing on record showing that the assessee challenged the same before the Appellate Forum and therefore, taking into consideration the submissions of the Ld. DR, we uphold the order of the Ld. CIT(Appeals) in confirming the penalty levied u/s.271(1)(c) of the Act on account of disallowance made u/s.69C - Decided against assessee. Penalty levied on disallowance made u/s.68 - HELD THAT - We find no cogent evidences before us as rightly pointed by the Ld. DR supporting the contentions of assessee and showing the addition has been deleted in the quantum proceedings. Therefore, we find no infirmity with the findings of the CIT(A) in confirming the penalty imposed u/s.271(1)(c) of the Act involving the disallowance made u/s.68 - Decided against assessee. Penalty imposed on disallowance made u/s.40(a)(ia) - violation of deduction of TDS on the payment made on account of TDR/Land cost - HELD THAT - AO initiated penalty proceedings for failure to deduct TDS which itself clearly shows that the there were details regarding the payment involving TDR/land cost in the assessment proceedings which does not any way constitute furnishing of inaccurate particulars nor concealment of income. A mere disallowance as rightly contended by the assessee before the CIT(A) does not attract imposition of penalty. Therefore, the order of the CIT(A) in confirming the penalty imposed against disallowance u/s.40(a)(ia) of the Act is deleted. - Decided in favour of assessee.

Summary

Issues Involved:
- Confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961 for assessment years 2004-05, 2005-06, and 2007-08.

Analysis:

Assessment Year 2004-05:
- The assessee, a partnership firm, faced penalty proceedings under section 271(1)(c) based on disallowances made under various sections of the Act.
- The penalty for disallowance under section 40A(3) was challenged by the assessee, arguing that the disallowance did not warrant a penalty as the expenses were genuine and verified. The Tribunal agreed and deleted the penalty.
- The penalty for disallowance under section 69C was upheld as the assessee did not challenge the addition in the quantum proceedings.
- The penalty for disallowance under section 68 was confirmed as the entries were outside the books of accounts, and no evidence supported the assessee's contentions.
- The penalty for disallowance under section 40(a)(ia) was deleted as the failure to deduct TDS did not constitute concealment of income. The Tribunal allowed this ground and partly allowed the appeal.

Assessment Year 2005-06:
- The issues raised in this year were similar to the previous year, and the decisions taken for 2004-05 were applied mutatis-mutandis.
- The Tribunal dismissed the grounds related to disallowances under sections 40A(3) and 69C but allowed the ground concerning disallowance under section 40(a)(ia).

Assessment Year 2007-08:
- The issues mirrored those of the previous years, and decisions were consistent with the outcomes of the 2004-05 assessment.
- The Tribunal allowed the grounds related to disallowances under sections 40A(3) and 40(a)(ia), aligning with the decisions made for the 2004-05 assessment.
- In conclusion, the Tribunal partly allowed the appeals for 2004-05 and 2005-06 and allowed the appeal for 2007-08.

This detailed analysis of the judgment showcases the Tribunal's considerations and decisions on the penalty confirmations under various sections of the Income Tax Act for the mentioned assessment years.