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TMI Blog2011 (4) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of payment of Rs.3,98,88,136/- is itself not called for - it is not a case where assessee has concealed any particulars about his liability to deduct the tax at source and payment thereof - this is not a fit case where penalty u/s 271(1)(c) can be levied. - Decided in the favour of the assessee - ITA No. 4933/Del/2010, - - - Dated:- 18-4-2011 - C.L. Sethi, K.D. Ranjan, JJ. Shyama S. Bansia, CIT-DR for the Appellant ORDER C.L. Sethi:- 1. The only ground raised by the Revenue in this appeal filed against the order dated 13.9.2010 of learned CIT(A) passed in the matter of penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 for the AY 2005-06 is as under:- "The Ld.CIT(A) had erred in deletin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evaded on the aforesaid disallowance of Rs.3,98,88,136/- disallowed u/s 40(a)(ia) of the Act for the reason that tax was not paid within the specified date. In the penalty order, the AO also relied upon the decision of Apex Court in the case of K.P. Madhusudanan vs. CIT - 251 ITR 99 (SC). 5. Being aggrieved against the penalty order, the assessee preferred an appeal before the learned CIT(A). 6. Before the learned CIT(A), assessee submitted that there was no dispute to the fact that the assessee deducted tax at source from the payment made to the contractors and the said TDS was required to be deposited in the government account on 7.4.2005 but was actually deposited on 12.5.2005, 4.6.2005 and 27.6.2005. The assessee further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(ia) of the Act. The assessee had in fact paid TDS and it is not in dispute that the expenditure should be allowed in the subsequent year in which the TDS has been paid to the Govt. Treasury. The first appellant authority, in our considered opinion, has rightly relied upon the judgment of the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Ajain Singh and Co. 253 ITR 630, wherein it is held that mere disallowance of expenditure will not per se amount to furnishing of inaccurate particulars of income. At para 4 page 3 of his order, the first appellate authority rightly held as follows:- "Once the explanation of the assessee is not considered false and explanation has been given the penalty can only be levied if the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma-facie disallowable inasmuch as tax deducted at source was not paid before the specified date. She, therefore, submitted that AO has rightly levied the penalty u/s 271(1)(c) of the Act. 10. None for the assessee was present. 11. After hearing the learned DR and considering the facts of the case, we are of the considered view that learned CIT(A) has rightly deleted the penalty levied u/s 271(1)(c) of the Act on account of disallowance of expenditure on which tax was duly deducted by the assessee but paid lately beyond the specified date. In this connection, we may refer to the amendment brought by the Finance Act, 2008 w.r.e.f. 1.4.2005 providing that the amounts specified in that Section would not be deducted in computing the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mations only from the return of income filed by the assessee. Therefore, it is not a case where assessee has concealed any particulars about his liability to deduct the tax at source and payment thereof. This disallowance has been made purely by invoking the provisions of law which have been amended retrospectively w.e.f. 1.4.2005 by the Finance Act, 2008. Therefore, this is not a fit case where penalty u/s 271(1)(c) can be levied. The learned CIT(A) has considered the issue in its right and correct perspective and has deleted the penalty. We do not find any infirmity in his order. The order of learned CIT(A) deleting the penalty is thus confirmed. 12. In the result, the appeal filed by the Revenue is dismissed. Decision pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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