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TMI Blog2018 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... oss at Rs. 2.61 crores in the return of income. The case of the assessee-company was selected for scrutiny. The A.O. observed from the balance sheet of the assessee-company that it obtained fresh unsecured loans during the year under consideration from the NBFC Sector companies. The assessee-company furnished details of interest paid to NBFC companies. It was observed from the details filed by the assessee-company that assessee- company has failed to deduct the tax at source on the payment on account of interest paid to NBFC companies amounting to Rs. 7,71,859. As per provisions of Section 194A, the assessee-company was required to deduct the tax on such payments during the year under consideration. Thus, the amount of interest was disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-in-default of not deducting tax at source because the interest was paid to other reputed NBFC companies by net banking and they are bound to file their return of income under section 139 of the I.T. Act. Since the payee has paid the tax, therefore, assessee-company may not be deemed to be an assessee-in-default. The assessee-company relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd., (2015) 377 ITR 635 (Del.). It was submitted that assessee-company made true and full disclosure, therefore, no penalty be levied. The assessee-company relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd., 322 ITR 158 in which it was held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts audited and no disallowance with regard to any non-deduction of tax at source on these payments was made by the tax auditor in the audit report. Copy of the same is filed at PB-23 to 34. The details with regard to bifurcation of said interest expenditure was provided to the A.O. Thus, the assessee- company made full disclosure in the return of income as well as at the assessment stage. The assessee-company was under bonafide belief that no TDS is required to be deducted on payments made to Banks and NBFCS. Rs. 1,75,099 was payable to Kotak Mahindra Bank Limited, on which, no TDS is required to be deducted. The tax auditor has not brought this fact to the notice of the assessee-company. Therefore, there is no concealment of income or furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses. The Tribunal was also actuated by the fact that the C.A. who audited the accounts of the assessee under Section 44AB did not point out any infirmity on account of non-deduction of IDS., otherwise, all the relevant accounts were adduced before the Assessing Officer. Thus, when the Tax audit report also did not point out the TDS default to the assessee, the Tribunal concluded that the mistake made by assessee was bonafide and the explanation was found genuine. 5. The Tribunal drew support from the order of CIT(A) that there was no concealment nor was this is a case of furnishing of inaccurate particulars. 6. The reasonings given by both the adjudicating authorities concurrently cannot be held as perverse nor are there any grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable sections but the said Auditor has not brought to the notice of the assessee-company non- deduction of TDS on interest paid to Banks and NBFCs. The assessee-company pleaded that part of the interest was paid to the Bank which is exempt on which no finding have been given by the Ld. CIT(A). It is clear from these facts that assessee-company made full disclosure of the incurring of the interest expenditure of the amount in question on account of fresh unsecured loan obtained from Banks and NBFC. The Auditor has given details of TDS in the audit report but the Auditor who audited the accounts of the assessee-company did not point-out any infirmity on account of non-deduction of TDS on the amount of interest paid to the Banks and NBF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of Explanation-1 to Section 271(1)(c) of the I.T. Act. The A.O. did not initiate the penalty proceedings for concealment of income. Explanation-1 to Section 271(1)(c) would apply in the case of concealment of income and not in the case of furnishing of inaccurate particulars of income. Therefore, there is a contradictory findings given by the A.O. in the assessment order as well as in the penalty order. Merely because the assessee-company did not challenge the addition before Ld. CIT(A), is no ground to levy penalty against the assessee-company because it is well settled law that assessment and penalty proceedings are distinct and independent proceedings. It is not automatic in each and every case to levy penalty, if addition is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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