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TMI Blog2013 (5) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... lley Jindal, Sr. DR For the Respondent : None ORDER Per A. Mohan Alankamony:- This appeal is preferred by the Revenue aggrieved by the order of the learned CIT(A)-XV, Ahmedabad dated 31st May, 2010, for the assessment year 2005-06 in Appeal No. CIT(A)-XV/ACIT(OSD)/Cir.9/30/10-11, challenging the deletion of penalty u/s 271(1) (c) of the IT Act on account of disallowance made u/s 40 (a) (ia) of the IT Act of Rs.59,40,914/-. 2. Briefly, the facts of the case are that the assessee filed return of income declaring income of Rs.15,05,881/- on 31-10-2005, for the assessment year 2005-06. It was noticed by the learned AO from the audit report filed with the return of income that the assessee had not remitted the tax deducted at source with respect to payment made for an amount of Rs.2,65,50,066/- in the government treasury within the stipulated date. Therefore, the learned AO disallowed expenditure of the aforesaid sum and added to the income of the assessee invoking the provisions of section 40(a) (ia) of the Act and also initiated penalty proceedings u/s 271 (1) ( c ) read with 274 of the Act for furnishing inaccurate particulars of income on 20-12-2007. However, the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in Rajashan Spinning & Weaving Mills was in line with the earlier decisions of Supreme Court wherein it was held that wilful concealment or wilful furnishing of inaccurate particular is essential ingredient for attracting penalty u/s. 271(1) (c ) which is not the case here. The AO is directed to delete the penalty imposed of Rs.59,40,914." 3. Though the learned AR did not appear before the Bench at the time of hearing, since the issue had been already decided by the Tribunal Ahmedabad Benches consistently, the case was taken up for hearing. The learned DR supported the order of the learned AO and prayed his order may be sustained. 4. We have heard the learned DR and carefully perused the materials on record. From the facts of the case it is apparent that the assessee has furnished the details of the TDS deducted and amount remitted in the government treasury before the revenue as annexure to the tax audit report along with the return of income filed. Only from this information furnished by the assessee, the learned AO could find the discrepancy with regard to the short remittance of TDS in the government treasury. Thus, the assessee has not furnished any inaccurate partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t penalty for furnishing of inaccurate particulars of income because there is no inaccurate particulars of income in the return. Accordingly, we confirm the order of CIT(A) deleting the penalty and this issue of Revenue's appeal is dismissed." The learned AR further pleaded that the assessee is not liable for penalty as is held by the learned CIT(A) and the same be upheld by the Tribunal. 4.1 On perusal of the records, we find that the addition on account of disallowance of Rs.5,85,87,521/- was made by the AO due to non-payment of TDS in time which is technical in nature. Hence, the same does not amount to concealment of income or furnishing of inaccurate particulars of income by the assessee. Further, the addition of Rs.1,03,222/- on account of disallowance of expenses was made on estimate basis. It is also settled law that addition made on estimate basis does not attract penalty. The learned CIT(A) on proper appreciation of facts has rightly deleted the penalty made by the AO on both the above issues. The learned DR also has not produced any material on record to controvert the findings of the learned CIT(A). 4.2 The same issue has also been decided in favour of the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of assessment proceeding Ld. AO found that the assessee had made the provisions in respect of certain foreign payments and claimed these provisions without deducting corresponding TDS. AO disallowed this claim of assessee and levied penalty under section 271(1)(C )relying upon the decision of Reliance (2010-TIOL- 21-SC-II) CIT(A) deleted the penalty - Matter reached to the ITAT." After hearing the parties the ITAT held as under, ++ there is no doubt that the claim made by the assessee is in respect of business expenses. Had the assessee deducted the TDS and paid it to the Govt. amount then its deduction could be allowed. According to the assessee it has paid the tax also in the next year for the sum of Rs.7,07,294/- and even thereafter deduction was not granted to it. Ld. First Appellate Authority has accepted the plea of assessee that it was a bonafide error;++ taking into consideration the overall facts and circumstances particularly the amount of disallowance vis a vis the returned income, we are of the view that it is a bonafide lapse at the end of the assessee. There is no deliberate attempt to conceal the particulars of income. Ld. CIT(A) has rightly apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro Products (P) Ltd. (322 ITR 158 (SC). Accordingly the ground raised by the revenue holds no merit." 6.3 The learned DR in his rejoinder has not produced any material to controvert the aforesaid submissions of the assessee. 7. In view of above discussions and the decisions cited by the assessee, we find force in the submissions of the assessee. We are of the view that the learned CIT(A) on proper appreciation of the facts of the case, considering the submissions of the assessee and the citations referred to by the assessee before him, has rightly deleted the penalty and we find no justification to interfere in the order of the learned CIT(A) deleting the penalty in the matter in the absence of any material produced by the learned DR to controvert the same. We confirm his findings. There is no merit in the ground of appeal of the Revenue. The same is accordingly dismissed. 8. In the result, the appeal of the revenue is dismissed." 4.3 Considering the facts of the case and in view of the above discussions, we do not find any justification to interfere with the findings of the learned CIT(A). We confirm his f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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