New Horizon India Ltd. v. Dy. CIT

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The Tax Publishers2012 TaxPub(DT) 0269 (Del-Trib) : (2011) 012 ITR (Trib) 0332 INCOME TAX ACT, 1961 --Penalty under section 271(1)(c)--Validity Disallowance of expenditure on account of non-deduction of TDS--During the assessment proceedings, AO found that assessee had made payment of royalty, advertisement and publicity, audit fee and recruitment expenses on which TDS had not been deducted in current year. AO held that such amount was to be disallowed under section 40(a)(ia) in current year and would be allowed in next year, when TDS payment was made. AO also levied penalty under section 271(1)(c) on this disallowance on the ground that the amount disallowed had not been reduced while computing income. *Held:* Since there was no concealment or furnishing of inacurate particulars, therefore, penalty imposed under section 271(1)(c) was not justified. In the audit report accompanying with the return it was clearly mentioned that the said amount was not admissible under section 40(a)(ia). Hence, there was neither any concealment nor furnishing of any inaccurate particulars. The assessee's case was that inadvertently the said amount was not reduced in the computation of income. It is also a settled law that the said amount is allowable in the year in which the TDS deducted is paid to the Government account. Hence, the AO disallowed the same in the current assessment year and remarked that the same will be allowable in the next assessment year. In view of this, the assessee could not be held to be guilty of concealment or furnishing of inaccurate particulars of income, therefore, penalty imposed under section 271(1)(c) was not justified. [Para 9] Income Tax Act, 1961 Section 271(1)(c) IN THE ITAT, DELHI 'F' BENCH RAJPAL YADAV J.M. & SHAMIM YAHYA A.M. New Horizon India Ltd. v. Dy. CIT ITA No. 865/Del/2010 A.Y. 2005-06 5 May 2010 Assessee by : Rajnesh Aggarwal and D. L. Gandhi Department by : H. K. Lal ORDER *Shamim Yahya A.M.* SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0269 (Del-Trib) : (2011) 012 ITR (Trib) 0332

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Validity Disallowance of expenditure on account of non-deduction of TDS--During the assessment proceedings, AO found that assessee had made payment of royalty, advertisement and publicity, audit fee and recruitment expenses on which TDS had not been deducted in current year. AO held that such amount was to be disallowed under section 40(a)(ia) in current year and would be allowed in next year, when TDS payment was made. AO also levied penalty under section 271(1)(c) on this disallowance on the ground that the amount disallowed had not been reduced while computing income. Held: Since there was no concealment or furnishing of inacurate particulars, therefore, penalty imposed under section 271(1)(c) was not justified.

In the audit report accompanying with the return it was clearly mentioned that the said amount was not admissible under section 40(a)(ia). Hence, there was neither any concealment nor furnishing of any inaccurate particulars. The assessee's case was that inadvertently the said amount was not reduced in the computation of income. It is also a settled law that the said amount is allowable in the year in which the TDS deducted is paid to the Government account. Hence, the AO disallowed the same in the current assessment year and remarked that the same will be allowable in the next assessment year. In view of this, the assessee could not be held to be guilty of concealment or furnishing of inaccurate particulars of income, therefore, penalty imposed under section 271(1)(c) was not justified. [Para 9]

Income Tax Act, 1961 Section 271(1)(c)

IN THE ITAT, DELHI 'F' BENCH

RAJPAL YADAV J.M. & SHAMIM YAHYA A.M.

New Horizon India Ltd. v. Dy. CIT

ITA No. 865/Del/2010

A.Y. 2005-06

5 May 2010

Assessee by : Rajnesh Aggarwal and D. L. Gandhi

Department by : H. K. Lal

ORDER

Shamim Yahya A.M.