Inder Travels P.Ltd, New Delhi V. ACIT, Circle-12(1), New Delhi

ITA 7251/DEL/2017

AI Insights

The case involves M/s Inder Travels Pvt. Ltd., which appealed against the penalty imposed for non-deduction of TDS on interest payments during the assessment year 2013-14. The Assessee had declared an income of Rs. 95,07,290 and was subjected to scrutiny, leading to an addition of Rs. 6,43,875 under section 40(a)(ia) of the Income Tax Act. The Assessee did not contest the addition but argued against the penalty, citing a bona fide belief influenced by the Auditor's report. However, both the Commissioner of Income Tax (Appeals) and the Tribunal found the Assessee's argument unconvincing, referencing a precedent that penalties cannot be avoided merely on the basis of a legal or audit opinion if the underlying tax liability is clear and undisputed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 112808 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 04-12-2017
• Other Referred Cases: New Horizon India Ltd. Vs. DCIT [2011] 012 ITR (Trib) 0332 ITAT (Del.), CIT Vs. NG Technologies Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 271(1)(c); 40(a)(ia)

Judgement Text

1 ITA no. 7251/Del/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE DR. BRR Kumar, ACCOUNTANT MEMBER AND SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No. 7251/DEL/2017 [Assessment Year: 2013-14___ M/s Inder Travels Pvt. Ltd., 886/2, East Park Road, Karol Bagh, New Delhi-110005 PAN- AAACI0662F Vs ACIT Circle 12(1), New Delhi. APPELLANT RESPONDENT Assessee represented by None Department represented by Ms. Beenu, Sr. DR Date of hearing 24.02.2023 Date of pronouncement 28.02.2023 O R D E R PER N.K. CHOUDHRY, JM: The instant appeal has been preferred by the Assessee against the order dated 19.09.2017 impugned herein, passed by the Ld. Commissioner of Income tax (Appeals)-22, New Delhi, (in short “Ld. Commissioner”) u/s 250 of the Income Tax Act, 1961 (in short “the Act”), pertaining to the assessment year 2013-14. 2. The Assessee declared its income to the tune of Rs. 95,07,290/- by filing return of income on 30.09.2013, which was selected for scrutiny and resulted into making the addition of Rs. 6,43,875/- u/s 40(a)(ia) of the Act , on account of non- deduction of TDS on the amount of interest paid to M/s Bajaj Finance. Penalty proceedings have also been initiated u/s 271(1)(C) of the Act for furnishing inaccurate particulars of income and the AO ultimately levied the penalty u/s 271(1)(c) of the Act for the aforesaid limb, to the tune of Rs. 2,08,900/- on the income of Rs. 6,43,875/- sought to be evaded. 2 ITA no. 7251/Del/2017 3. The Assessee being aggrieved, challenged the imposition of penalty before the learned Commissioner and in appellate proceedings though accepted the addition made by the AO by not challenging the addition on the basis of which the penalty was levied, however claimed that the Assessee was under bona fide belief that the payment of interest to NBFC did not attract any deduction at source and the said belief was on the basis that the Auditor did not make any disallowance u/s 40(a)(ia) of the Act in the tax audit report. The Assessee also relied upon the judgment passed by the Hon’ble Coordinate Bench in the case of New Horizon India Ltd. Vs. DCIT [2011] 012 ITR (Trib) 0332 ITAT (Del.). The learned Commissioner though considered the explanation submitted and the judgment referred to by the Assessee, however, by relying upon the judgment passed by the Hon’ble High Court in the case of CIT Vs. NG Technologies Ltd., affirmed the penalty by dismissing the appeal of the Assessee. 3.1 Though the Assessee has preferred the instant appeal, however, on most of the occasions including today, did not appear, inspite of sending notices. Hence, we are constrained to decide the appeal as ex-parte. The Assessee has failed to controvert the findings of the learned Commissioner in affirming the penalty by taking refuge of the judgment passed in CIT Vs. NG Technologies Ltd. (supra) wherein it was held: “... an Assessee would normally rely upon legal opinion of a Chartered Accountant, who was required to audit accounts of the company and also submit an audit report, but penalty cannot be deleted on guise or pretence of legal opinion a a smokescreen and façade. The claim or the entry in the present case was contrary to elementary and well-known basic principles of accountancy. The present case was not a case of a debatable issue relating to legal or accountancy principle which could have been interpreted differently”. 3 ITA no. 7251/Del/2017 Even otherwise we do not find any reason and/or material to controvert the finding of the learned Commissioner, consequently are inclined, not to interfere in the decision of the learned Commissioner. 4. In the result, appeal filed by the Assessee is dismissed. Order pronounced in open court on 28.02.2023. Sd/- Sd/- (DR. B.R.R. KUMAR) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI