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TMI Blog2016 (4) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the order dated 07.03.2012 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench "C", Ahmedabad (hereinafter referred to as the "Tribunal") in ITA No.2822/Ahd/2011, whereby the appeal preferred by the revenue has been dismissed. 2. This court, by an order dated 18.03.2014, admitted the appeal on the following substantial question of law: "Whether on the facts and in the circumstances of the case as well as in law, the Appellate Tribunal was justified in reversing the order of CIT(A) and restoring the order passed by Assessing Officer levying penalty of ₹ 4,44,510/- under section 271(1)(c) of the Act?" 3. The assessee, a partnership firm is engaged in the business of construction. During the course of assessment proceedings, the Assessing Officer, on verification of details submitted in respect of labour payment, noticed that in some cases, the tax deducted at source from certain parties to whom labour payments were made, were not deposited into Government account as per the provisions of section 200(1) of the Act. He, therefore, held that the assessee had clearly violated provisions of section 40(a)(ia) of the Act and accordingly, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire exercise taking all the years together was revenue neutral on account of uniform rate of tax @ 30% applicable in all these years. It was further submitted that the Tribunal has failed to appreciate that the entire disallowance of ₹ 7,94,590/- was not disallowable under section 40(a)(ia) of the Act and hence, no penalty under section 271(1)(c) of the Act was attracted. It was, accordingly, urged that the breach being technical and venial in nature, the Commissioner (Appeals) was wholly justified in deleting the penalty and that the Tribunal was not justified in restoring the penalty imposed by the Assessing Officer. 4.1 In support of his submissions, the learned advocate placed reliance upon an unreported decision of this court in the case of Commissioner of Income Tax IV v. L. G. Chaudhary rendered on 15.01.2013 in Tax Appeal No.536 of 2012 wherein, the court observed that the disallowance was due to non-payment of TDS, which was at the most a technical default and that, there was nothing to indicate any concealment of the income or furnishing of inaccurate particulars of income by the assessee and that the Assessing Officer was not justified in levying the penalty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made disallowance of ₹ 14,29,890/-. The assessee pointed out that out of the total amount of ₹ 14,29,890/-, tax was deducted at source in respect of ₹ 6,18,300/- and was deposited on 24.4.2006, that is, before the due date for filing of return of income, whereas in respect of the balance amount of ₹ 7,94,590/-, the tax was deducted at source and paid in the subsequent year and accordingly, such expenditure was allowed in the subsequent year. The Assessing Officer, for the reason that the discrepancy in not deducting the tax at source and paying the same into the Government account had not been disclosed by the assessee and that the same was revealed only during the course of the assessment proceedings, formed the opinion that the assessee had furnished inaccurate particulars of income and levied penalty under section 271(1)(c) of the Act. The Tribunal, while upholding the finding recorded by the Assessing Officer, has found that this was not a case wherein the claim made by the assessee was allowable under the provisions of the Act and that the assessee was required to deduct tax in accordance with the statutory provisions and deposit the same within the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of a claim, or the separate items of an account. Therefore, the word "particular" used in section 271(1)(c) would embrace the meaning of the details of the claim made. The court further observed that in Webster’s Dictionary, the word "inaccurate" has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." The court observed that reading the words "inaccurate" and "particulars" in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. The court noted that it was an admitted position that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any detail supplied was found to be factually incorrect and accordingly, held that, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The court repelled the contention raised by the counsel for the revenue that "submitting an incorrect claim in law for the expenditure on interest would amount to giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 40(a)(ia) of the Act. Thus, the Assessing Officer has imposed penalty on the ground of furnishing inaccurate particulars, whereas the Tribunal has upheld the order of the Assessing Officer on the ground of concealment of particulars. It is by now well settled that while issuing a notice under section 271(1)(c) of the Act, the Assessing Officer is required to specify as to what is the default on the part of the assessee, as to whether the case is one of furnishing inaccurate particulars, or whether it is a case of concealment of income, or both. In the facts of the present case, the Assessing Officer has proceeded on the footing that inaccurate particulars were filed by the assessee, whereas the Tribunal has held that the assessee had suppressed particulars for the year under consideration. Under the circumstances, the Tribunal, having confirmed the penalty imposed by the Assessing Officer on the ground of suppression of actual particulars in respect of which the assessee was not put to notice, the order of the Tribunal is rendered unsustainable on this ground also. 12. In the light of the aforesaid discussion, the court is of the view that the view expressed by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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