2012 (10) TMI 777

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..... IAL MEMBER   The assessee is in appeal before us against the order of Learned CIT dated 09.12.2011 passed for assessment year 2006-07. The solitary grievance of the assessee is that Learned CIT(Appeals) has erred in confirming the penalty of Rs.88,593 imposed under sec. 271(1)(c) of the Income-tax Act, 1961. 2. The brief facts of the case are that assessee has filed its return of income on .....

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..... fronted the assessee that in the audit report at para 17F, the auditor had reported that a sum of Rs.40.406 paid as a remuneration charges to the auditors and a sum of Rs.1,62,959 paid as freight charges are not allowable as deduction as per section 40(a)(ia) of the Act. Assessing Officer confronted this observation to the assessee. The assessee vide his letter dated 10.2.2008 submitted as under: .....

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..... presentative, we have gone through the record carefully. The operative force of the reasoning assigned by the learned revenue authorities below while imposing the penalty is that assessee has not committed bona fide mistake, rather it is a deliberate attempt. Learned Assessing Officer was of the view that once auditors have qualified that deduction of auditors remuneration and freight charges woul .....

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..... penalty. With regard to two other additions, we find that these expenses are of revenue nature. When assessee made the payments, it failed to deduct the TDS, therefore, a deduction cannot be claimed as per section 40(a)(ai) of the Act. Learned first appellate authority while confirming the penalty referred to the decision of the Hon'ble Delhi High Court in the case of Zoom Communications reported .....

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..... difficult to prove or disprove such type of claim with the help of demonstrative evidence but the Assessing Officer who assessed the assessee annually may refer some circumstance which can highlight the antecedents of the assessee or its conduct in earlier or subsequent year to suggest that it was not a bona fide mistake rather it was a deliberate attempt. No such material is available on the rec .....

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