Income Tax Appellate Tribunal - Pune
Sansui Electronics Pvt. Ltd., Pune vs Department Of Income Tax on 30 June, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND
SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
ITA No. 1067/PN/2009
(Assessment Year: 2005-06)
Income-tax Officer,
Cir. 6, Pune .. Appellant
Vs.
Sansui Electronics P Ltd. .. Respondent
89/1 Bhavani Peth, Pune
PAN AACCS3928C
Appellant by: Shri Abhay Damle
Respondent by: None
ORDER
Per D. Karunakara Rao, A.M:
This appeal by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-II, Pune dated 30.6.2009 deleting the penalty of Rs 6,54,478/- levied by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 (in short "the Act), pertaining to the assessment year 2005-06.
2. A penalty of Rs 6.54,478/- was levied by the Assessing Officer under section 271(1)(c) of the Act on account of disallowance under section 40(a)(ia) of an amount of Rs 17,88,552/-. In the penalty order, the Assessing Oficer stated that the assessee made payment for services rendered to various persons on which no tax was deducted at source under the provisions of section 194C of the Act. In appeal, the first appellate authority, after considering the submissions of the assessee, deleted the penalty levied by the Assessing Officer under section 271(1)(c) of the Act, by holding as under:
"I have considered the submissions of the appellant, facts on record and have gone through the decision of Kanbay Software India Ltd. mentioned above. This is a case of 2 ITA No 1067/PN/09 Sansui Electronics P Ltd. Pune disallowance u/s 40(a)(ia) i.e. for not making TDS on certain payments. This was the first year of applicability of this provision and the appellant has committed this error at the time of filing of return, but has made amends by making payment of the TDS amount in the period relevant to AY 2008-09 thus claiming deduction in that year. This does not mean that every legal disallowance under the provisions of the Act would lead to the conclusion that there was furnishing of inaccurate particulars of income on the part of the assessee. The fact regarding non-deducting the tax for these payments was already on record, having been pointed out by the Auditor in the tax audit report u/s 44AB. Therefore, it is held that the disallowance u/s 40(a)(ia) in the facts and circumstances of the case would not lead to the inference of furnishing of inaccurate particulars of income thereby concealment of income. The penalty levied u/s 271(1)(c) is, therefore, cancelled. Ground Nos 1 & 2 of the appeal are, therefore, allowed."
3. We have heard the learned Departmental Representative for the Revenue. None appeared on behalf of the assessee. Factually, it is the case of first year of the amendment to the provisions of section 40a(ia) of the Act and the assessee's bona fide intention is evident from the fact of disclosure of non making of TDS on the impugned payments and Audit report supports the same.
4. After considering the submissions made by the learned Departmental representative and going through the order of the Commissioner of Income-tax (Appeals), we are of the opinion that no interference is called for in the order of the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) has deleted the penalty under section 271(1)(c) of the Act in a well reasoned order and we find no infirmity in the said order of the Commissioner of Income-tax (Appeals). We accordingly find no merit in the appeal filed by the department and confirm the order of the Commissioner of Income-tax (Appeals).
5. In the result, appeal of the Revenue is dismissed.
Pronounced in the open court on this 28th day of February, 2011.
Sd/- Sd/-
(I.C. SUDHIR) (D. KARUNAKARA RAO)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Pune, Dated: 28th February, 2011
Copy to:-
1) Sansui Electronics P Ltd. Pune
2) The ITO Cir.6 Pune
3 ITA No 1067/PN/09
Sansui Electronics P Ltd. Pune
3) The CIT (A)-II Pune
4) The CIT-III, Pune
5) The Departmental Representative, "A" Bench, I.T.A.T., Pune.
By Order true copy Asst. Registrar, I.T.A.T., Pune B