2024 (1) TMI 605 - AT - Income Tax

Penalty u/s 271(1)(c) - addition for delayed payment of Employees contribution to PF/ESIC - HELD THAT - Invocation of the same is either that of filing inaccurate particulars of income or concealment of income or both the limbs are present in respect of assessee s return of income before the Assessing Officer. But, in the present case, the Hon ble Supreme Court s decision in case of Checkmate came 2022 (10) TMI 617 - SUPREME COURT after the assessment proceedings as well as after the penalty proceedings. The issue was debatable at both the stages and in fact the assessee through his details of income has shown the dates upon which the contribution to PF ESI was made. Thus, there was no concealment or furnishing of inaccurate particulars of income as those details were very much before the AO as well as before the CIT(A). Therefore, there is no element of either furnishing inaccurate particulars or concealment of income. Since the issue was debatable, the assessee has taken the benefit of decision of other Hon ble High Courts which were in favour of the assessee. Thus, Section 271(1)(c) of the Act does not attract in the present case. Appeal of the assessee is thus allowed.

Summary

Issues involved:
The appeal against the penalty under Section 271(1)(c) of the Income Tax Act, 1961 for delayed payment of Employees' contribution to PF/ESIC.

Details of the Judgment:

Issue 1: Penalty under Section 271(1)(c) of the Act
The assessee, a company engaged in the manufacture of Heaters and trading in Hot Runners Systems, filed its return of income for the Assessment Year 2015-16. The Assessing Officer made disallowances and additions, including late payment of Employees Provident Fund and ESI contribution. Penalty proceedings under Section 271(1)(c) of the Act were initiated separately. The CIT(A) confirmed the addition under Section 36(1)(va) and levied a penalty of Rs. 1,21,467, alleging tax evasion. The assessee contended that the issue was debatable, citing the decision of the Hon'ble Supreme Court in a similar case. The delay in filing the appeal was condoned, and it was held that there was no concealment or furnishing of inaccurate particulars of income, as the details were provided to the authorities. The penalty was deemed not applicable, and the appeal of the assessee was allowed.

Key Points:
- The penalty under Section 271(1)(c) was challenged by the assessee.
- The Assessing Officer initiated penalty proceedings for late payment of Employees' contribution to PF/ESIC.
- The CIT(A) confirmed the addition and levied a penalty, alleging tax evasion.
- The assessee argued that the issue was debatable, relying on a Supreme Court decision.
- The delay in filing the appeal was condoned, attributing it to a mistake.
- It was held that there was no concealment or furnishing of inaccurate particulars of income.
- The penalty was deemed inapplicable, and the assessee's appeal was allowed.

This summary provides a detailed overview of the judgment, focusing on the key legal issues and arguments presented in the case.