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TMI Blog2017 (4) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices have been availed by the assessee company and the amount have been paid to them also support the case of the assessee against non-levy of penalty. It is now well settled as held in case of Reliance Petroproducts Limited (2010 (3) TMI 80 - SUPREME COURT) that mere making of claim which is not sustainable in law by itself will not amount to furnishing inaccurate for return of income. There is no finding given by the Assessing Officer that in the details supplied by the assessee in its return of income, there is any incorrect, erroneous or false information which has been supplied by the assessee. - Decided in favour of assessee - ITA No. 852/JP/2014 - - - Dated:- 25-4-2017 - Shri Kul Bharat, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri Rajeev Sogani ( C.A. ) Revenue by : Shri R.S. Verma ( Addl. CIT) ORDER Per : Vikram Singh Yadav, A. M. This is an appeal filed by the Revenue against the order of Ld. CIT(A), Jaipur 07.10.2014 for A.Y. 2008-09 wherein the Revenue has taken following ground of appeal:- Whether on the facts and in the circumstances of the case and in law the ld. CIT(Appeals) erred in deleting the penalty imposed u/s 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2 It is undisputed that at the time of booking of expenses and crediting of the ABA Pool Account, the precise amount to be transferred to each ABA was not ascertainable. As the amounts from the respective schools were received after various deductions and a percentage such amount received, net of deduction, was passed on to the ABAs. Since the precise amount to be paid to each ABA at the time of booking of the expense was not known, the assessee company did not deduct tax. However, at the time of actual payout to the ABA, TDS was deducted. 3.4 Reliance is placed on the judgment of the Hon ble ITAT Chennai Bench in the case of Dishnet Wireless Ltd.[2016] 45 ITR ( Trib) 430 ( Chennai). In this case, the issue before the Hon ble Tribunal was TDS under section 194C of the Act, in respect of year end provision for estimated expenditure. The assessee company engaged various service providers for rendering serves like address verification, credit certification, content development etc. The assessee also had to pay the various other service providers, for providing value-added services to its subscribers. The assessee estimated the customer verifications expenditure, on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c) of the Act. If we accept the contention of the revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c) of the Act. That is clearly not the intendment of the Legislature. 3.10 Further, in the below mentioned judgments, Hon ble Gujarat High Court in case of Nayan C. Shah vs. ITO [2016] ITR 304 (Gujarat) and Karnataka High Court in case of M/s Filtrex Technologies Pvt. Ltd. [2016] 380 ITR 222 have held that no penalty can be levied in case of disallowance under section 40a(ia). 3.24 Any notice issued under section 274, read with Section 271(1)(c) of the Income Tax Act, 1961, should specify under which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Perinchery, ITA 1154,953,1097,1226 of 2014 ( order dated 05.01.2017) ( Bombay High Court) SSA s Emerald Meadows [2016] 73 taxmann.com 241 ( Karnataka High Court) Mitsu Industries Ltd., ITA No. 216 of 2004, Gujarat High Court 3.29 An SLP filed by the department against the said order was dismissed by the Hon ble Supreme Court in the case of SSA s Emerald [2016 73 taxmann.com 248 (SC). Hon ble Apex Court in the above mentioned case held that we do not find any merit in this petition. The special leave petition is, accordingly, dismissed (Emphasis Supplied). Thus the matter has stamp of approval of the Hon ble Apex Court. 4. The ld DR is heard who has vehemently argued the matter and relied upon the order of the AO. 5. We have heard the rival contentions and perused the material available on record. The penalty u/s 271(1)(c) has been levied by the Assessing Officer in respect of disallowances made u/s 40a(ia) of the Act. As observed by the Ld. CIT(A), the default relates to the timing of deduction of TDS. In other words, whether TDS should have been deducted at a time of credit in the ABA Pool Account or at a time of credit to the account of the individu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified persons shall, at the time of credit of such sum to the account of the tractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to (2) Where any sum referred to in sub-section (1) is credited to any account, whether called suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. 5.3 In the instant case, therefore, what is relevant to examine is whether the assessee was responsible for payment of any sum to the ABA for carry out any work in pursuance of a contract. Here, it is relevant to note that it is not just the work which has to be carried out in pursuance of a contract but even the payment (which is payable for carrying out such work) has to be in pursuance of the contract. The assessee company has contended as per its agreement with the individu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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