The Ahmadabad Bench of the Income Tax Appellate Tribunal ( ITAT ), deleted penalty as there was payment of TDS with interest to ensure no loss to revenue.
The assessee’s (Corrtech International Pvt Ltd) appeal is related to disallowance of Rupees twelve lakhs on account of difference in income as per TDS certificate and books of accounts.
The Counsel for the assessee, submitted that as regards to penalty imposed under Section 271(1)(c) of the Income Tax Act in respect of disallowance on account of income reflected in TDS certificate but not recorded in books of accounts and on account of bogus purchases and further submitted that the difference in receipt to that of Form 26AS cannot be the reason for making the addition, the penalty was on the non-furnishing of particulars of income which is not just and proper.
The Counsel also submitted that the addition on account of bogus purchase was on ad-hoc basis and cannot be the criteria for levying the penalty.
The Counsel for the Revenue submitted that the assessee failed to bring the parties before the Assessing Officer and to controvert the findings of the Assessing Officer that sales shown was bogus in nature. Thus, the penalty imposed by the Assessing Officer was correct and there is no need to interfere with the findings of the CIT(A).
A Division Bench comprising Suchitra Kamble, Judicial Member and Waseem Ahmed, Accountant Member observed that “The assessee has deposited TDS along with interest. Thus, it has compensated the Government for late payment of TDS which, in turn, has ensured that there is no loss to the revenue. This shows that there is no mala fide intention on the part of the assessee in filing TDS returns belatedly. Therefore, the CIT(A) was not right in confirming the penalty and it has to be deleted.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
