ITO, Cir. 6, Pune V. Sansui Electronics Pvt. Ltd., Pune

ITA 1067/PUN/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7509 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 04-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 194C

Judgement Text

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 B Y: 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 OF FICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PE RTAINING TO THE ASSESSMENT YEAR 2005-06. 2. A PENALTY OF RS 6.54,478/- WAS LEVIED BY THE ASS ESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOW ANCE 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 RENDERE D TO VARIOUS PERSONS ON WHICH NO TAX WAS DEDUCTED AT SOURCE UNDER THE PROVI SIONS OF SECTION 194C OF THE ACT. IN APPEAL, THE FIRST APPELLATE AUTHORITY, AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE PENALTY LEVIED BY THE ASS ESSING 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 ITA NO 1067/PN/09 SANSUI ELECTRONICS P LTD. PUNE 2 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 MA KING PAYMENT OF THE TDS AMOUNT IN THE PERIOD RELEVANT TO AY 2008-09 THUS CLAIMING DED UCTION IN THAT YEAR. THIS DOES NOT MEAN THAT EVERY LEGAL DISALLOWANCE UNDER THE PROVIS IONS 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 ALREAD Y 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 FURNISH ING 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, ALLO WED. 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE FOR THE REVENUE. NONE APPEARED ON BEHALF OF THE ASSESSEE. F ACTUALLY, IT IS THE CASE OF FIRST YEAR OF THE AMENDMENT TO THE PROVISIONS OF SE CTION 40A(IA) OF THE ACT AND THE ASSESSEES BONA FIDE INTENTION IS EVIDENT FROM THE FACT OF DISCLOSURE O F NON MAKING OF TDS ON THE IMPUGNED PAYMENTS AND AUDIT RE PORT SUPPORTS THE SAME. 4. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE LE ARNED DEPARTMENTAL REPRESENTATIVE AND GOING THROUGH THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS), WE ARE OF THE OPINION THAT NO INTERFEREN CE IS CALLED FOR IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). THE COMM ISSIONER 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 COMMISSIONE R OF INCOME-TAX (APPEALS). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 28TH DAY OF FE BRUARY, 2011. SD/- SD/- (I.C. SUDHIR) (D. KARUNAKA RA RAO) JUDICIAL MEMBER ACCO UNTANT MEMBER PUNE, DATED: 28TH FEBRUARY, 2011 COPY TO:- 1) SANSUI ELECTRONICS P LTD. PUNE 2) THE ITO CIR.6 PUNE ITA NO 1067/PN/09 SANSUI ELECTRONICS P LTD. PUNE 3 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