The Tax Publishers2019 TaxPub(DT) 1097 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where disallowance under section 43B was only because of technical reason of non-payment of the amount and where all relevant details were disclosed by assessee before AO, therefore, VAT and service tax payable could not be added back under section 43B and penalty under section 271(1)(c) was not warranted.

Penalty under section 271(1)(c) - Disallowance under section 43B - Imposition of -

During scrutiny assessment, AO noted that assessee had shown VAT and service tax payable and assessee had not filed the proof of payment of the same. Accordingly, AO asked assessee to furnish the details. AO completed the assessment by making an addition on account of disallowance under section 43B and accordingly imposed penalty under section 271(1)(c). CIT(A) confirmed the penalty levied by AO. Held: Assessee had not claimed the service tax and VAT as expenses and delay in deposit with government account was not deliberate therefore, there was no question of any disallowance under section 43B. However, all relevant details were disclosed by assessee before AO. Unpaid VAT and service tax liability were not being debited to Profit & Loss Account which were not claimed as expenditure, therefore, could not be added back under section 43B and penalty under section 271(1)(c) could not be imposed.

Followed:Pharma Search v. Asstt. CIT (2012) 21 taxmann.com 44 (Mumbai-Trib) and : 2012 TaxPub(DT) 2445 (Mum-Trib) ACIT v. Medversity Online Ltd. (2012) 145 TTJ 398 (Hyderabad) : 2012 TaxPub(DT) 2058 (Hyd-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :


INCOME TAX ACT, 1961

Section 271(1)(c)

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