Assessee can’t be Penalized for Wrong Statement given by Payee: ITAT [Read Order]

Imposing Penalty - ITAT - Taxscan

A Division bench of the Indore ITAT including Judicial Member Kul Bharat and Accountant Member Manish Borad ruled that assessee cannot be penalized merely based on wrong statement given by payee.

In instant case Assessee is an individual engaged in the business of transport booking filed his return of income, wherein CIT-II passed an order for directing the AO to examine the applicability of provision under section 194C and 194I of the Act regarding the payment to truck operator.

However, assessing officer not convinced with the submission of assessee made disallowance under section 40(a)(ia) of the Act for non-deduction of tax at source under section 194C.

Aggrieved assessee made detailed submission before CIT (A) who retained the disallowance and the matter carried to this tribunal where bench observed the submission of assessee. The counsel for Assessee submitted that truck owner had given the form no:151 and did not mentioned about the ownership of three trucks, for this reason tax was not deducted at source.

The counsel for the assessee also added that the form151 received from alleged payee is in Bonafide manner with a belief that the same was genuine and correct. The counsel also submitted that the wrong declaration given by payee and invalid form cannot be a ground for levying tax on assessee.

The bench heard the rival submission and perused the documents on record and pointed that in the 15I form payee has mentioned detail of one truck for which the payment was received. But during the proceedings AO found the list of truck owners in which alleged payee owns three trucks.

Therefore, the bench added that It is true that Kishorilal Birla owned more than two trucks but for the wrong statement given by him in Form 151 the assessee cannot be penalized.

The bench also pressed the decision of the Gujarat High Court in  CIT Vs Valibhai Khanbhai Mankad and held that wrong statement given by the payee is not the ground for making burden on assessee instead the revenue authorities can take action against them as per provision of law.

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