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2022 (8) TMI 1188 - AT - Income TaxPenalty passed u/s 271(1)(c) - Non-deduction of the TDS of payment to sub contractor - HELD THAT - The Hon'ble Supreme Court in the case of Reliance Petro Product Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT wherein it is held that merely because the assessee has claimed expenditure, which claim was not accepted or was not acceptable to the Revenue, that, by itself, not attract the penalty u/s 271(1)(c). We are of the opinion that there is neither concealment nor furnishing of inaccurate particulars by the assessee in the case on hand. Resultantly, the Grounds of Appeal filed by the assessee are allowed.
Issues:
Assessment of penalty under section 271(1)(c) of the Income Tax Act for concealment of income and submission of inaccurate particulars. Analysis: Issue 1: Assessment of penalty under section 271(1)(c) The appeal was filed by the assessee against the penalty order imposed under section 271(1)(c) of the Income Tax Act. The main grievance of the assessee was regarding the penalty of Rs. 7,46,502/- imposed, which was confirmed by the CIT(A). The assessment was completed with additions made on account of disallowance of payments to subcontractors and financial charges. The CIT(A) partially allowed the appeal by deleting certain additions but confirmed an addition of Rs. 21,96,242/- related to payments to subcontractors not subjected to TDS. The penalty order was challenged, and the CIT(A) dismissed the appeal. Issue 2: Principles of Natural Justice The assessee contended that the assessment order and penalty imposed were in violation of principles of natural justice. The assessee argued that non-deduction of TDS was a clerical mistake and not deliberate concealment. It was highlighted that the assessee voluntarily informed the assessing officer about the mistake. Citing the case of Reliance Petro Product Pvt. Ltd., it was emphasized that a mere disagreement on expenditure claims does not attract penalty under section 271(1)(c). Issue 3: Judicial Precedents The Tribunal referred to various judicial precedents to support its decision. It cited the case of ITO Vs. Vishal Madhusudan Choksi, where it was held that non-deduction of TDS due to section 40(a)(ia) provisions does not attract penalty for furnishing inaccurate particulars. Additionally, the case of CIT Vs. M/s Venus Engineers was mentioned, where the High Court found the mistake in TDS deduction to be bonafide and genuine, leading to the deletion of penalty. Relying on these precedents, the Tribunal concluded that there was no concealment or submission of inaccurate particulars by the assessee. Conclusion: The Tribunal allowed the appeal filed by the assessee and deleted the penalty imposed by the assessing officer, which was confirmed by the CIT(A). The Tribunal found that there was no concealment or submission of inaccurate particulars by the assessee, considering the clerical nature of the mistake in TDS deduction. The decision was based on the principles of natural justice and supported by relevant judicial precedents, leading to the deletion of the penalty. The judgment by the Appellate Tribunal ITAT DELHI highlighted the importance of legal principles, judicial precedents, and the application of the Income Tax Act in assessing penalties for concealment of income or submission of inaccurate particulars. The detailed analysis provided insights into the grounds of appeal, assessment process, and the reasoning behind the decision to delete the penalty imposed on the assessee.
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