M/s. M & M Machine Craft (P) Ltd., Meerut V. DCIT, New Delhi

ITA 2518/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5102 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR SENIOR
• Keywords: Initiation of penalty proceedings; Non-deduction of tax; Wrong claim; Revised return; TDS; Set aside
• Section: 271(1)(c); 40(a)(ia); 80IB; 80G; 143(1); 274; 139(1); 44AB; 40a(ia); 13; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.2518/DEL./2015 (ASSESSMENT YEAR : 2006-07) M/S. M & M MACHINE CRAFT (P) LTD., VS. DCIT, CIRCLE 6 (1), C/O M/S. MALIK & CO. (ADVOCATES), NEW DELHI. 305, THAPAR NAGAR, MEERUT. (PAN : AAACM6385K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY MALIK, ADVOCATE REVENUE BY : SHRI SARAS KUMAR, SENIOR DR DATE OF HEARING : 22.01.2020 DATE OF ORDER : 17.02.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER APPELLANT, M/S. M & M MACHINE CRAFT (P) LTD. (HERE INAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 23.02.2015 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-6, NEW DELHI, CONFIRMING THE PENALTY ORDER DATED 15.03.2013 PASSED U/S 271(1 )(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), QUA TH E ASSESSMENT YEAR 2006-07 ON THE GROUNDS INTER ALIA THAT :- ITA NO.2518/DEL./2015 2 1. THAT THE APPELLANT DISCLOSED ALL PRIMARY FACTS RELATING TO DEDUCTION UNDER DIFFERENT HEADS. ALL THE PRIMARY FA CTS DISCLOSED BY THE APPELLANT- ASSESSEE HAD NOT BEEN FOUND TO BE FALSE. THE DISALLOWANCES WERE AS A RESULT OF VARIATION IN INTERPRETATION OF THE STATUTORY PROVISIONS AND NOT BECAUSE OF FURNISHING OF INACCURATE PARTICU LARS OF INCOME. ON FACTS AND IN LAW THUS INITIATION OF PENALTY PROCEED INGS WAS NOT WARRANTED. 2. THE INITIATION OF PENALTY PROCEEDINGS FOLLOWED B Y THE LEVY OF PENALTY ON THE GROUND THAT THE APPELLANT FILED INAC CURATE PARTICULARS OF INCOME AND EVADED THE TAX ON THE INCOME OF RS.23,52 ,505/- UNDER THREE HEADS OF INCOME WAS VOID, ILLEGAL AND WITHOUT JURIS DICTION AND BARRED BY LIMITATION. 3. THAT THE LEVY OF PENALTY OF RS.7,91,852/-U/S 271 (1)(C) OF I.T. ACT MADE BY THE LD. ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(APPEALS) BEING ILLEGAL AND UNTENABLE ON FACTS A ND IN LAW DESERVES TO BE QUASHED AND CANCELLED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY BEING IN CORPORATED ON 02.12.1988 IS INTO THE BUSINESS OF MANUFACTURING AN D SALE OF ENGINEERED METAL PRODUCTS FOR AUTO AND ALLIED ENGIN EERING INDUSTRIES SUCH AS ALUMINUM DIE CAST, SHEET METAL, ETC.. ON THE BASIS OF ASSESSMENT FRAMED UNDER SECTION1 143 (3) O F THE ACT AT TOTAL INCOME OF RS.1,85,64,980/- BY MAKING VARIOUS DISALLOWANCES INTER ALIA ADDITION OF RS.22,77,910/-, RS.44,592/- & RS.30,000/- ON ACCOUNT OF WITHDRAWAL OF CLAIM OF DEDUCTION U/S 80I B, WRONGLY CLAIMED DEDUCTION U/S 80G FROM 50% TO 100% & ON ACC OUNT OF TDS NOT DEDUCTED BY THE ASSESSEE ON LEGAL AND PROFE SSIONAL EXPENSES RESPECTIVELY, THE PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT. DECLINING THE CONTENTIONS RA ISED BY THE ASSESSEE THAT IT WAS INADVERTENT CLAIM OF THE ASSES SEE, ASSESSING ITA NO.2518/DEL./2015 3 OFFICER (AO) LEVIED PENALTY OF RS.7,91,852/- @ 100% OF THE TAX SOUGHT TO BE EVADED. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED BY THE ORDER PASSED BY T HE LD. CIT (A), THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, ASSESSEE COMPANY WAS INCORPORATED ON 02.12.1988 AND ITS ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT DURING THE ASSESSMENT PROC EEDINGS, ASSESSEE COMPANY HAS WITHDRAWN ITS CLAIM FOR DEDUCTION OF RS .22,77,910/- MADE AS DEDUCTION U/S 80IB BY MOVING LETTER DATED 0 9.07.2008 BEFORE THE AO ON THE GROUND THAT IT WAS INADVERTENT LY CLAIMED. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE COMPANY HAS NO T FILED ANY REVISED RETURN WITHIN THE PERIOD PRESCRIBED U/S 139 (1) OF THE ACT RATHER WITHDREW THE CLAIM DURING THE ASSESSMENT PRO CEEDINGS BY MOVING LETTER (SUPRA) BEFORE THE AO. IT IS ALSO NO T IN DISPUTE THAT ITA NO.2518/DEL./2015 4 THE ASSESSEE ACCEPTED AFORESAID DISALLOWANCE/ADDITI ON MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A). 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCUMST ANCES OF THE CASE, ORDERS PASSED BY THE LOWER AUTHORITIES AN D ARGUMENTS ADDRESSED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES TO THE APPEAL, THE SOLE QUESTION ARISES FOR DETERMINAT ION IN THIS CASE IS:- AS TO WHETHER ASSESSEE COMPANY HAVING AUDITED ACCO UNTS HAS DELIBERATELY AND CONSCIOUSLY FURNISHED INACCURATE P ARTICULARS OF INCOME BY CLAIMING INADMISSIBLE DEDUCTIONS UNDER SE CTION 80IB (SUBSEQUENTLY WITHDRAWN DURING ASSESSMENT PROCEEDIN GS) AND CLAIMING DEDUCTION U/S 80G @ 100% INSTEAD OF 50% SO AS TO ATTRACT THE PROVISIONS CONTAINED U/S 271(1)(C) OF T HE ACT? 7. WHEN WE EXAMINE THE AFORESAID QUESTION FRAMED IN THE LIGHT OF THE FACT THAT ASSESSEE COMPANY HAVING BEEN INCOR PORATED WAY BACK IN 1988 WHOSE ACCOUNTS ARE AUDITED CANNOT BE A CCEPTED BY ANY STRETCH OF IMAGINATION THAT THEY HAVE CLAIMED T HE DEDUCTION U/S 80IB TO THE TUNE OF RS.22,77,910/- AND RS.44,592/- U/S 80G OF THE ACT INADVERTENTLY. EXCEPT THE LETTER DATED 09.07.2 008 WRITTEN BY THE ASSESSEE COMPANY TO THE AO DURING ASSESSMENT PR OCEEDINGS, NO COGENT REASON WHATSOEVER HAS BEEN BROUGHT ON RECORD AS TO WHAT WAS THE MATERIAL WITH ASSESSEE COMPANY WHICH IS MAN NED BY EXPERT HANDS PUT UNDER THE IMPRESSION THAT THEY ARE ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. ITA NO.2518/DEL./2015 5 8. FOR FACILITY OF REFERENCE, EXTRACT OF THE LETTER DATED 09.07.2008 WRITTEN BY THE ASSESSEE COMPANY TO THE A O IS EXTRACTED AS UNDER :- 'IN OUR INCOME TAX RETURN FILED FOR THE CAPTIONED A SSESSMENT YEAR DECLARING TAXABLE INCOME AT RS.1,59,42,885/- W HEREIN THE ASSESSEE COMPANY HAS CLAIMED THE DEDUCTION U/S 80-I B OF THE INCOME TAX ACT, 1961. IN THIS CONNECTION, IT IS RES PECTFULLY SUBMITTED THAT WHILE GOING THROUGH OUR RECORDS WE H AVE NOTICED AS UNDER: 1. THAT THE DEDUCTION U/S 80 IB HAS BEEN INADVERTEN TLY CLAIMED AT BY THE ASSESSEE COMPANY, 2. THAT A LOSS OF RS.154143/- ON SALE OF DERIVATIVE WAS INADVERTENTLY NOT REDUCED FROM THE INCOME. THEREFORE, WE ARE REVISING OUR COMPUTATION OF INCOM E AT THE TOTAL TAXABLE INCOME OF RS.1,80,66,649/- I.E. WITHO UT THE DEDUCTION OF RS.22,77,910/- U/S 80IB OF THE ACT. YO U ARE REQUIRED TO PLEASE TREAT THIS REVISED STATEMENT OF ASSESSABL E INCOME SHOWING TAXABLE INCOME FOR THE AFORESAID ASSESSMENT YEAR AT RS.1,80,66,649/- AS FORMING PART AND PARCEL OF OUR ORIGINAL RETURN OF INCOME. INCOME TAX DEMAND ON THE SAME WIL L BE DEPOSITED BY AUGUST, 2008.' 9. PERUSAL OF THE AFORESAID LETTER CATEGORICALLY GO ES TO PROVE THAT NO COGENT REASON HAS BEEN EXPLAINED EXCEPT BY WRITI NG WORDS THAT THE DEDUCTION HAS BEEN CLAIMED INADVERTENTLY BY T HE ASSESSEE COMPANY. NEITHER IT IS DISCLOSED DURING THE ASSESS MENT PROCEEDINGS NOR DURING THE PENALTY PROCEEDINGS IF S UCH IMPRESSION TO MAKE INADVERTENT CLAIM OF WRONG DEDUCTION WAS BA SED UPON AUDITED REPORT OF THE ASSESSEE COMPANY OR IT WAS ME RE MISTAKE AT THE TIME OF FILING A RETURN. SO, THE FACTUM OF CLA IMING INADMISSIBLE DEDUCTION U/S 80IB AND 80G AND THEN WITHDRAWING THE SAME WHEN ITA NO.2518/DEL./2015 6 THE CASE OF THE ASSESSEE PUT UNDER SCRUTINY PROCEED INGS IS NOTHING BUT A DELIBERATE AND CONSCIOUS DECISION OF THE ASSE SSEE COMPANY TO FURNISH INACCURATE PARTICULARS OF INCOME BY CLAIMIN G WRONG DEDUCTION. 10. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNE D PENALTY ORDER CONTENDED THAT THERE IS NO VALID SATISFACTION ON THE PART OF THE AO IN THE ASSESSMENT ORDER TO INITIATE THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND RELIED UPON THE DECISION O F HONBLE SUPREME COURT IN CASE OF VARKEY CHACKO VS. CIT (1993) 203 ITR 885, CIT VS. MOHINDER LAL 168 ITR 101 & MRS. INDRAN I SUNIL PILLAI VS. ACIT, CIRCLE 21 (1), MUMBAI ITA NO.1339/ MUM./2016 . ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED UP ON THE ORDERS OF THE LOWER AUTHORITIES BELOW. 11. BEFORE PROCEEDING FURTHER, WE WOULD EXTRACT THE SATISFACTION RECORDED BY THE AO IN THE ASSESSMENT ORDER, WHICH I S AS UNDER :- IN VIEW OF THE FACTS AND REASONS DISCUSSED ABOVE, IT IS AMPLY CLEAR THAT THE ASSESSEE COMPANY HAS FURNISHED INACCURATE PARTICULARS WITH A VIEW TO EVADE THE TAX. THE REAS ONS DESCRIBED ABOVE MAY BE TREATED AS SATISFACTION NOTE FOR INITI ATING PENALTY PROCE4EDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961 FO R THE ABOVE ALL ADDITIONS MADE. FOR THE SAKE OF BREVITY AND NON DU PLICATION, THE SAME ARE NOT REPRODUCED HERE AGAIN. 12. WHEN WE EXAMINE THE AFORESAID SATISFACTION RECO RDED BY THE AO IN CONTINUATION WITH THE ADDITION MADE BY THE AO UNDER SEPARATE HEADS VIZ. FOR CLAIMING WRONG DEDUCTIONS U /S 80IB AND ITA NO.2518/DEL./2015 7 80G, MADE ADDITION FOR NOT DEDUCTING THE TDS FOR MA KING PAYMENT OF LEGAL AND PROFESSIONAL CHARGES ETC. WE ARE OF TH E CONSIDERED VIEW THAT IT IS A VALID SATISFACTION BECAUSE IT IS CATEG ORICALLY MENTIONED IN THE SATISFACTION NOTE THAT, ASSESSEE COMPANY HAS FURNISHED INACCURATE PARTICULARS WITH A VIEW TO EVADE THE TAX AND THE REASON DESCRIBED ABOVE MAY BE TREATED AS SATISFACTION NOTE FOR INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FO R THE ABOVE TWO ADDITIONS MADE. THEN, ON THE BASIS OF AFORESAID SATISFACTION RECORDED BY THE AO, NOTICE WAS ISSUED TO THE ASSESS EE COMPANY U/S 274 R/W SECTION 271(1)(C) OF THE ACT WHICH HAS NEVE R BEEN CHALLENGED BY THE ASSESSEE COMPANY. ALL THESE FACT S GO TO PROVE THAT PENALTY PROCEEDINGS IN THIS CASE ARE INITIATED ON THE BASIS OF VALID SATISFACTION AND THE DECISIONS RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF TH E CASE. 13. LD. AR FOR THE ASSESSEE FURTHER CONTENDED THAT PENALTY CANNOT BE LEVIED U/S 271(1)(C) ON THE BASIS OF WRON G CLAIM OF DEDUCTION U/S 80IB OF THE ACT AMOUNTING TO RS.22,77 ,910/-, FOR CLAIM U/S 80G @ 100% INSTEAD OF 50% AND FOR NON-DED UCTION OF TDS ON PROFESSIONAL FEE AND RELIED UPON THE DECISIO N OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) . ITA NO.2518/DEL./2015 8 14. NO DOUBT, MERELY MAKING CLAIM WHICH IS NOT SUST AINABLE IPSO FACTO NOT SUFFICIENT TO TERM IT FURNISHING OF INACCURATE PARTICULARS OF INCOME , OF THE ASSESSEE AND PROVISIONS CONTAINED U/S 271( 1)(C) ARE NOT ATTRACTED AS HAS BEEN HELD BY HONBLE SUPRE ME COURT IN CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), BUT WE ARE OF THE CONSIDERED VIEW THAT THIS IS A CASE CLEARLY DISTING UISHABLE FROM THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) BECAUSE IN THIS CASE CLAIMING OF INADMISSIBLE DEDUCTIONS U/S 80IB A ND 80G IS NOT A WRONG CLAIM RATHER A DELIBERATE AND CONSCIOUS SCHEM E TO EVADE THE TAX BY FURNISHING INACCURATE PARTICULARS OF INCOME, IF NOT CAUGHT IN SCRUTINY. 15. ASSESSEE IN THIS CASE HAS NEVER REVISED ITS RET URN DURING THE PERIOD PRESCRIBED U/S 139(1) RATHER WITHDREW THE CL AIM DURING ASSESSMENT PROCEEDINGS WHEN CONFRONTED BY THE AO. SO, BY NO STRETCH OF IMAGINATION, THE CLAIM MADE BY THE ASSES SEE FOR DEDUCTION U/S 80IB AND 80G CAN BE CONSIDERED AS INA DVERTENT CLAIM RATHER IT IS DELIBERATE AND CONSCIOUS CLAIM MADE TO EVADE THE TAXES. MOREOVER, IT IS NOWHERE THE CASE OF THE ASSESSEE CO MPANY THAT THE CLAIM OF DEDUCTION HAS BEEN MADE ON THE BASIS OF WR ONG AUDITED REPORTS OR ITS AUDITED REPORT HAS BEEN SUBSEQUENTLY CORRECTED BY ITS AUDITORS. HAD THERE BEEN ANY INADVERTENT MISTAKE O N THE PART OF THE ASSESSEE COMPANY TO CLAIM SUCH DEDUCTIONS, ASSESSEE COMPANY ITA NO.2518/DEL./2015 9 WOULD HAVE FILED REVISED RETURN WITHIN THE PRESCRIB ED PERIOD, BUT NO SUCH REVISED RETURN HAS BEEN FILED WHICH LEADS TO T HE CONCLUSION THAT IT WAS A DELIBERATE AND CONSCIOUS ATTEMPT TO E VADE TAX. 15. HONBLE DELHI HIGH COURT IN CASE OF CIT VS. USHA INTERNATIONAL LTD. (2010 254 CTR 509 HAS DECIDED THE IDENTICAL ISSUE IN IDENTICAL FACTS AND CIRCUMSTANCES OF THE C ASE AND CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON THE GROUND THAT WHEN FACTS AND CIRCUMSTANCES ARE CATEGORIC ENOUGH T O PROVE THAT REVISED RETURN AS NOT FILED VOLUNTARILY BUT UNDER P RESSURE WHEN THE CASE WAS PUT TO SCRUTINY IT IS CONCEALMENT OF INCOM E BY WAY OF FURNISHING INACCURATE PARTICULARS OF INCOME. 16. HONBLE DELHI HIGH COURT IN CASE OF CIT VS. ZOOM COMMUNICATION P. LTD. (2010) 327 ITR 510 (DELHI) DULY DISCUSSED THE JUDGMENT RENDERED BY HONBLE APEX COU RT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) BY RETURNING FOLLOWING FINDINGS :- 18. IN THE CASE OF RELIANCE PETRO PRODUCTS PRIVATE LIMITED (2010) 322 ITR 158 (SC), THE ADDITION MADE BY THE A SSESSING OFFICER IN RESPECT OF THE INTEREST CLAIMED AS A DED UCTION UNDER SECTION 36(1)(III) OF THE ACT WAS DELETED BY THE CO MMISSIONER OF INCOME TAX(APPEALS) THOUGH IT WAS LATER RESTORED, B Y THE TRIBUNAL, TO THE ASSESSING OFFICER. THE APPEAL FILE D BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL WAS ADMI TTED BY THE HIGH COURT. IT WAS, IN THESE CIRCUMSTANCES, THAT TH E TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD NEITHE R CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS THEREOF . IN RECORDING THIS FINDING, THE TRIBUNAL FELT THAT IF TWO VIEWS O F THE CLAIM OF THE ASSESSEE WERE POSSIBLE, THE EXPLANATION OFFERED BY IT COULD NOT BE SAID TO BE FALSE. THIS, HOWEVER, IS NOT THE FACTUAL POSITION IN THE ITA NO.2518/DEL./2015 10 CASE BEFORE US. THE FACTS OF THE PRESENT CASE THUS ARE CLEARLY DISTINGUISHABLE. 19. IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH I S INCORRECT IN LAW WOULD NOT AMOUNT TO GIVING INACCURATE PARTIC ULARS OF THE INCOME OF THE ASSESSEE, BUT IT CANNOT BE DISPUTED T HAT THE CLAIM MADE BY THE ASSESSEE NEEDS TO BE BONAFIDE. IF THE C LAIM BESIDES BEING INCORRECT IN LAW IS MALAFIDE, EXPLANATION 1 T O SECTION 271(1) WOULD COME INTO PLAY AND WORK TO THE DISADVA NTAGE OF THE ASSESSEE. 20. THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMALL PERCENTAGE OF THE INCOME TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INC ORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BASIS AND THE EXPLAN ATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOU ND TO BE BONAFIDE, IT WOULD BE DIFFICULT TO SAY THAT HE WOUL D STILL NOT BE LIABLE TO PENALTY UNDER SECTION 271(1)(C) OF THE AC T. IF WE TAKE THE VIEW THAT A CLAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION ON WHICH IT COULD BE MADE, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOSITION OF PENALTY, EVEN IF HE WAS NOT ACTING BONAFIDE WHILE MAKING A CLAIM OF THIS NATURE , THAT WOULD GIVE A LICENCE TO UNSCRUPULOUS ASSESSEES TO MAKE WH OLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BE ING ANY BASIS FOR MAKING THEM, IN THE HOPE THAT THEIR RETUR N WOULD NOT BE PICKED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED O N THE BASIS OF SELF ASSESSMENT UNDER SECTION 143(1) OF THE ACT AND EVEN IF THEIR CASE IS SELECTED FOR SCRUTINY, THEY CAN GET AWAY ME RELY BY PAYING THE TAX, WHICH IN ANY CASE, WAS PAYABLE BY THEM. TH E CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAI MS OF THIS NATURE, ACTUATED BY A MALAFIDE INTENTION TO EVADE T AX OTHERWISE PAYABLE BY THEM WOULD GET AWAY WITHOUT PAYING THE T AX LEGALLY PAYABLE BY THEM, IF THEIR CASES ARE NOT PICKED UP F OR SCRUTINY. THIS WOULD TAKE AWAY THE DETERRENT EFFECT, WHICH TH ESE PENALTY PROVISIONS IN THE ACT HAVE. 17. AT NO POINT OF TIME, EITHER BEFORE ASSESSMENT P ROCEEDINGS OR DURING APPELLATE PROCEEDINGS ASSESSEE HAS COME FORW ARD WITH CLAIM THAT IT HAS ACTED BONAFIDE WHILE MAKING THE INADMIS SIBLE CLAIM U/S 80IB AND 80G. 18. FURTHERMORE, WHEN IT IS PROVED ON RECORD THAT T HE CLAIM OF DEDUCTIONS MADE BY THE ASSESSEE COMPANY U/S 80IB AN D80G IS NOT ITA NO.2518/DEL./2015 11 ONLY INCORRECT BUT A MALAFIDE UNDER EXPLANATION 1 T O SECTION 271(1)(C) IS ATTRACTED TO CONFIRM THE PENALTY LEVIE D ON THE ASSESSEE COMPANY. 19. LD. AR FOR THE ASSESSEE FURTHER CONTENDED THAT PENALTY INITIATED ON THE BASIS OF ADDITION OF RS.30,000/- M ADE U/S 40A(IA) OF THE ACT FOR NON-DEDUCTION OF TDS CANNOT BE LEVIE D AS PROPER DISCLOSURE WAS MADE BY THE ASSESSEE AND RELIED UPON THE DECISION RENDERED BY THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF SYNDICATE LABELS VS. ACIT IN ITA NO.4386/DEL/2014 O RDER DATED 21.10.2015 . ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES BELOW. 20. WE ARE OF THE CONSIDERED VIEW THAT CONTENTION M ADE BY THE LD. AR FOR THE ASSESSEE IN THIS REGARD IS SUSTAINAB LE BECAUSE QUA ADDITION OF RS.30,000/- ASSESSEE COMPANY HAS MADE F ULL DISCLOSURE OF ALL THE FACTS AS TO MAKING PAYMENT ON WHICH TDS WAS NOT DEDUCTED. SO, THE ASSESSEE HAD NO OCCASION TO FURN ISH INACCURATE PARTICULARS TO CONCEAL ITS INCOME AS THE ONLY DISPU TE WAS QUA DEDUCTION OR NON-DEDUCTION OF TAX FOR THE PAYMENT M ADE ON ACCOUNT OF LEGAL AND PROFESSIONAL EXPENSES. 21. COORDINATE BENCH OF THE TRIBUNAL IN CASE OF SYNDICATE LABELS VS. ACIT (SUPRA) DELETED THE PENALTY LEVIED FOR NON- DEDUCTION OF TAX U/S 40A(IA) BY RETURNING FOLLOWING FINDINGS. ITA NO.2518/DEL./2015 12 3. AFTER CONSIDERING RIVAL SUBMISSIONS AND PERUSIN G RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE INSTANT PENALTY HAS BEEN IMPOSED ONLY IN RESPECT OF DISALLOWANCE U/S 40 (A)(I) OF THE ACT. THE ASSESSEE ENTERTAINED A BONA FIDE BELIEF AB OUT THE NON- DEDUCTION OF TAX AT SOURCE FROM THE AMOUNT PAID TO M/S MAERSK INDIA PVT. LTD. ON THE BASIS OF A CIRCULAR, AS PER WHICH, THE FOREIGN SHIPPING COMPANIES AND THEIR AGENTS WERE GO VERNED BY THE PROVISIONS OF SECTION 172 AND NOT BY SECTION 19 4C OF THE ACT. THOUGH IT IS AN ADMITTED FACT THAT THE ASSESSEE MAD E THE PAYMENT TO A RESIDENT BUT THE FACT REMAINS THAT PRINCIPAL O F M/S MAERSK INDIA PVT. LTD., BEING M/S A.P. MOLLER-MAERSK A/S, DENMARK, WAS GIVEN 100% DIT RELIEF, COPY OF WHICH LETTER ISS UED BY THE OFFICE OF DEPUTY DIRECTOR OF INCOME TAX (INTERNATIO NAL TAXATION) DATED 23.04.2007, HAS BEEN PLACED ON RECORD. THESE FACTS INDICATE THAT THE ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT THE AMOUNT PAID TO M/S MAERSK INDIA PVT. LTD. WAS NOT LIABLE F OR DEDUCTION OF TAX AT SOURCE. BE THAT AS IT MAY, I AM CONCERNED WI TH THE IMPOSITION AND CONFIRMATION OF PENALTY U/S 271(1)(C ) OF THE ACT WHICH PRESUPPOSES CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. HERE IS A CASE IN WHICH THE ASSESSEE NEITHER CONCEALED ANY INCOME NOR FURNISHED INACCURATE PARTICULARS. DEDUCTION ON ACCOUNT OF M/S MAERSK IND IA PVT.LTD. WAS CLAIMED AFTER MAKING DUE PAYMENTS. THE DISPUTE IS ONLY ABOUT DEDUCTION OR NON-DEDUCTION OF TAX AT SOURCE F ROM PAYMENTS TO M/S MAERSK INDIA PVT.LTD. FOR WHICH DIS ALLOWANCE HAS BEEN MADE U/S 40(A)(IA) OF THE ACT. UNDER NO CI RCUMSTANCE CAN SUCH A DISALLOWANCE BE BROUGHT WITHIN THE AMBIT OF SECTION 271(1)(C) OF THE ACT. THE ASSESSEE MADE A PROPER DI SCLOSURE ABOUT THE EXPENSE CLAIMED BY IT AS DEDUCTION WHICH WAS NE ITHER BOGUS NOR OTHERWISE NON-DEDUCTIBLE BUT 3 ITA-4386/DEL/201 4 FOR THE APPLICATION OF SECTION 40(A)(IA) OF THE ACT. OVERTU RNING THE IMPUGNED ORDER, I ORDER FOR THE DELETION OF THE INS TANT PENALTY. 22. SO, FOLLOWING THE AFORESAID DECISION RENDERED B Y THE COORDINATE BENCH OF THE TRIBUNAL, WE ARE OF THE CON SIDERED VIEW THAT PENALTY FOR ADDITION OF RS.30,000/- U/S 40A(IA ) FOR NON- DEDUCTION OF TDS IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE PENALTY ORDER TO THAT EXTENT PASSED BY THE AO AND C ONFIRMED BY THE LD. CIT (A) IS NOT SUSTAINABLE. ITA NO.2518/DEL./2015 13 23. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FI ND NO ILLEGALITY OR PERVERSITY IN THE ORDER PASSED BY THE AO LEVYING THE PENALTY ON THE ASSESSEE QUA ADDITIONS ON ACCOUNT OF INADMISSIBLE CLAIM OF DEDUCTIONS U/S 80IB AND 80G, HENCE IMPUGNE D ORDER PASSED BY THE LD. CIT (A) IS CONFIRMED TO THAT EXTE NT. HOWEVER, PENALTY LEVIED BY THE AO AND CONFIRMED BY THE DL. C IT (A) QUA ADDITION OF RS.30,000/- ON ACCOUNT OF NON-DEDUCTION OF TDS ON PAYMENT OF LEGAL AND PROFESSIONAL EXPENSES IS NOT S USTAINABLE, HENCE ORDERED TO BE DELETED. CONSEQUENTLY, THE APP EAL FILED BY THE ASSESSEE IS HEREBY PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 17 TH DAY OF FEBRUARY, 2020. SD/- SD/- (DR. B.R.R. KUMAR) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 17 TH DAY OF FEBRUARY , 2020 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-6, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.