ITO v. Yash Laxmi International Pvt. Ltd.

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Concealment or furnishing of inaccurate particulars of incomeNon-deduction of TDS--During the assessment proceedings, the AO noted that the assessee had made certain payments which were liable for TDS under section 194C. He, therefore, disallowed the said claim of expenditure by invoking the provisions of section 40(a)(ia). Penalty proceedings under section 271(1)(c) were also initiated on the ground AO held that the assessee had furnished inaccurate particulars of income by claiming expenses which were not allowable being hit by the provisions of section 40(a)(ia). On Appeal, CIT(A) deleted the penalty. Held:The assessee had already faced the consequences by way of disallowance of expenditure for non deduction of TDS as per provision of section 194C. It was not the case of the Revenue that the assessee had not incurred any expenditure or that the claim of the expenditure was bogus or inaccurate. The disallowance of the expenditure was attracted due to non deduction of TDS and it could not be said to be a case of concealment of income or furnishing of inaccurate particulars of income.Therefore, CIT(A) was justified in deleting the penalty levied by AO .

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

Relied: CIT v. Reliance Petro Products (P) Ltd. 322 ITR 158

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

IN THE ITAT, MUMBAI G BENCH

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