Income Tax Appellate Tribunal - Chandigarh
M/S Kapsons Associates Investments ... vs Acit, C-1, Ludhiana on 1 January, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH 'A', CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND
DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No.1354/Chd/2017
Assessment Year: 2010-11
M/s Kapsons Associates Vs. Assistant CI T
Investments Private Ltd. Circle-I , Ludhiana
B-26, Focal Point, Ludhiana
PAN No. AAACK7243A
(Appellant) (Respondent)
Assessee By : Sh. Vipan Gupta
Revenue By : Sm t. Chandrakanta
Date of hearing : 27/12/2017
Date of Pronouncement : 01/01/2018
ORDER
PER DR. B.R.R. KUMAR, A.M.
The present appeal has been filed by the assessee against the order of the Ld. CIT(A)-2 Ludhiana dt. 13/07/2017.
2. The only effective ground of appeal is as under:
1. That the Ld. CIT(A)-2 has erred in confirming the levy of penalty of Rs. 90,404/- u/s 271(1)(c) on the disallowance under section 40(a)(ia) of Rs. 2,92,569/-,
3. The AO during the course of assessment proceedings noted that the assessee has made certain payments without deducting tax at source. He therefore made the disallowance under section 40(a)(ia) and consequently levied penalty u/s 271(1)(c) on the disallowance which has been confirmed by the Ld. CIT(A).
4. Brief facts relevant for adjudication of the case are that, on perusal of the audit report which showed that the assessee has not added back the amount to the return of income pertaining to the disallowance of Rs. 2,92,569/- which was required to be made by the assessee due to non payment of TDS . During the assessment proceedings the assessee submitted that it was due to oversight the disallowance under section 40(a)(ia) was not added in the return of income.
25. Before us the Ld. AR submitted that the disallowance not added in the return due to oversight and it was a bonafide mistake. He relied on the judgment of Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro products Pvt. Ltd. (322 ITR 158) dated 17/03/2010 held that when the assessee has made a claim under the bonafide belief and disallowance of such claim would not attract levy of penalty.
6. The assessee further relied on the judgment of Hon'ble Punjab & Haryana High Court in the case of PCIT Vs. Torque Pharmaceuticals P. Ltd. (2016) 389 ITR 46 (P&H)(High Court) wherein it was held that, the assessee made a bonafide claim of deduction of the expenditure and even thought it was not acceptable to the Revenue, it would not lead to the conclusion that the assessee has concealed the particulars of income or filed inaccurate particulars of income. Similarly, Hon'ble Supreme Court in the Case of Price Waterhouse Coopers Pvt. Ltd 348 ITR 306 held that no penalty is imposable on a bonafide claim or error.
7. We have gone through the record and have also heard the Ld. DR on the issue who relied on the order of the Ld. CIT(A) and we find that it is not a case of concealment of income or furnishing inaccurate particulars of income as the assessee has shown in the audit report about the non deduction of TDS and also accepted the bonafide mistake of not adding the disallowance to the total income before the Assessing Officer .
8. Keeping in view the facts and circumstances of the case we hereby order that the penalty levied by the AO to be deleted.
9. In the result appeal of the assessee is allowed.
Order pronounced in the open court.
Sd/- Sd/- (SANJAY GARG) (B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 01/01/2018 AG
Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR