Vildirect: IncomeTax-caselaws-2017-VIL-1533-ITAT-JAI

2017-VIL-1533-ITAT-JAI

Income Tax Appellate Tribunal JAIPUR

ITA No. 820/JP/2016

Date: 29.09.2017

M/s AIREN METALS PVT. LTD.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR

For The Assessee : Shri Mahendra Gargieya (Advocate)
For The Revenue : Shri R. A. Verma (Addl. CIT)

BENCH

SHRI KUL BHARAT, JM AND SHRI VIKRAM SINGH YADAV, AM

JUDGMENT

PER:SHRI VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of Ld. CIT(A)- 05, Jaipur dated 22.06.2016 wherein the assessee has taken following grounds of appeal:

“1. The impugned penalty order u/s 271(1)(c) dated 27.06.2012 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.

2. The ld. CIT(A) erred in law as well as on the facts of the case in partly confirming the penalty imposed u/s 271(1)(c) of the Act corresponding to the amount of Rs. 25,20,000/- in respect to the disallowance u/s 40(a)(ia) of the Act. The penalty so imposed and partly confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts kindly be deleted in full.

3. That there was not a definite conclusion in the assessment order at the time of initiation of proceedings and there being no satisfaction recorded discernable there from as to on what precise basis the penalty has been imposed nor it is clearly appearing from show cause notice issued u/s 271(1)(c) r/w Sec. 274 of the Act and hence, the impugned penalty deserves to be deleted in full.

2. Regarding ground No. 1 of the assessee’s appeal, no specific contentions have been raised by the ld. AR and it was submitted that the same may be read alongwith ground no. 2. Hence the same doesn’t require any separate adjudication.

3. Regarding ground no. 2 & 3, the facts of the case are that the assessee filed its return of income declaring total income of Rs. 3,63,84,400/- which was assessed u/s 143(3) of the Act at Rs. 3,81,65,201/-. It was observed by the AO that the assessee has credited the account of its sister concern, Airen Copper Pvt Ltd on 31.03.2009 and made a payment of Rs. 25,20,000 towards rent for use of office premises and no tax has been deducted at source. As the assessee has neither deducted tax at source nor paid the same during the previous year or before the due dates prescribed under section 200(1), the AO made the disallowance of Rs. 25,20,000/- u/s 40(a)(ia) of the I.T. Act for non deduction of tax on rent u/s 194I paid to M/s Airen Copper(P) Ltd. The penalty proceedings were also being initiated separately and a show cause notice u/s 274 dated 28.12.2011 was issued to the assessee stating that “it appears to me that you have concealed the particulars of your income or furnished inaccurate particulars of such income” and you are hereby required to show-cause why an order imposing penalty on you under section 271(1)(c) should not be passed.

4. The assessee did not appeal against the said disallowance made by the Assessing Officer and the said disallowance has thus attained finality for year under consideration.

5. In the penalty proceedings, the assessee was again given a show-cause on 18.6.2012 as to why penalty u/s 271(1)(c) should not be imposed for concealment of income and furnishing inaccurate particulars of such income. However, there was no response from the assessee to the said show-cause and the Assessing Officer thereafter proceeded to complete the penalty proceedings. In its penalty order, the AO levied penalty of Rs. 6,05,295 being 100% of tax sought to be evaded and has held as under:

“As per the provisions of section 194I, the assessee was liable to deduct TDS on the above payments to its sister concern. Inspite of knowing the fact that the assessee has not paid the TDS on the above payments, the assessee claimed the expenditure of Rs. 25,20,000/- in the P & L account. But, it was the assessing officer who discovered during the course of the assessment proceedings that the above expenses should be disallowed as per the provisions of Section 40(a)(ia).

In response to the above, the assessee has furnished a reply which is reproduced as follows “The company has paid rent through account payee cheque and TDS has been done as per Income Tax Rules. Amount is being paid through contractual lease, hence it is deducible expense”. However, the assessee has not been able to furnish any evidence as to deduction of tax at source on payment of the said rent/credit of the same in its books of accounts.

Thus, the assessee has clearly furnished inaccurate particulars of income in the Income Tax Return. The assessee was deliberately claiming expenses in spite of knowing that the provisions of the law are unambiguous in this regard. Moreover, when the assessee was confronted as to why TDS has not been deducted, the assessee is trying to bluff and furnish superficial replies which do not have any basis. The assessee could not furnish the evidence of the payment of TDS during the entire assessment proceedings while in the reply, the assessee has quoted that TDS has been done as per Income Tax Rules. In my opinion, this act of not deducing TDS on the rent paid and claiming the same without any basis has a definite element of mens rea and penalty should be imposed u/s 271 (1)(c) for furnishing inaccurate particulars of income. Therefore, I impose a penalty of 100% on the tax sought to be evaded.”

6. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who confirmed the levy of penalty with the following findings which are reproduced as under:-

“2.4 It is thus clear that not only did the assessee make an unjustified claimed of deduction but also misled the AO during the assessment proceedings by stating that TDS as applicable had duly been deducted and hence the impugned amount was allowable as per the provisions of section 40(a)(ia). The fact is that the appellant deducted and deposited the due TDS much after the assessment order was passed. This shows that the assessee intentionally furnished inaccurate particulars of income and thereafter made false claims before AO for covering up the default. The above said act and conduct of the appellant clearly amounts to furnishing of inaccurate particulars of income within the meaning of section 271(1)(c). Accordingly, the appellant is held to be liable for penalty u/s 271(1)(c) corresponding to the amount of Rs. 25,20,000/-.”

7. During the course of hearing, ld. AR submitted that firstly, as permitted by the first proviso to section 40(a)(ia), the assessee has already deposited the TDS of Rs. 25,20,000/- in AY 2012-13 as evident from the copy of computation and return of income filed for AY 2012-13. In this regard, the ld. AR submitted that the 1st provision to section 40(a)(ia), though amended by Finance Act, 2010 w.e.f. 01.04.2010 is merely declaratory and curative in the nature and removed the hardship hitherto being faced and hence has been held to be having a retrospective applicability in the sense that the past assessments have also been treated as covered by such amendment. Recently the Hon’ble Rajasthan High Court has also taken a similar view in the case of CIT vs. Harish Chand Ahuja (2015) 125 DTR 184 (Raj.) and the disallowance made on this score was deleted. Thus, the assessee having the option of making the payment either within the prescribed due date or if failed, has the liberty to deposit in a later year where also, the law permits the deduction on payment basis. Hence there was nothing of the nature of concealment or furnishing of inaccurate particulars.

Even under the pre and post amended first proviso where the tax is deducted in subsequent year, the same shall be allowed as a deduction in the year in which it is deposited, which in this case, AY 2012-13 wherein tax was deposited and deducted.

The AO imposed the penalty mainly relying upon the law prior to the said amendment. The ld. CIT(A) though noted this fact at Pg. 6 last line unfortunately however, gave no importance to such fact though he did not deny the fact of payment made in later year.

In view of this settled legal position and the admitted facts the disallowance so made by the AO must have been deleted but merely for the reason of non filing of appeal, no penalty could be imposed. However, for the present purpose of penalty, considering afresh the above binding legal position, and admitted facts, the impugned disallowance has to be treated as deleted in full.

8. It was further submitted that this was first occasion/year in which the assessee company was required to make TDS compliance and it was only because of the oversight, this amount escaped the notice of the management. Further, even in the Tax Audit report, no such disallowances were pointed out by the tax auditor. Hence the AO was replied accordingly which cannot be a case of misleading. In this regard, the ld AR placed on the decision of Hon’ble Supreme Court in case of Price Waterhouse Coopers Pvt. Ltd. vs. CIT 348 ITR 306 wherein despite the tax auditor having made a disallowance in the tax audit report, the assessee firm didn’t make any disallowance by oversight.

9. Futher reliance was placed on the following decisions whether penalty has been deleted in respect of disallowance made by the AO u/s 40(a)(ia) of the I.T. Act:

• Ramkrishna Shetty vs. ACIT (2013) 38 CCH 0020 (Mum)

• Tanushree Basu vs. ACIT (2013) 36 CCH 0089 (Mum)

• CIT vs. Filtrex Technologies (P) Ltd., (2015) 380 ITR 0222 (Kar)

10. It was further submitted that the ld. AO imposed the penalty mainly on the allegation that the assessee furnished inaccurate particulars. It is submitted that the assessee had disclosed all material facts with regard to claim of payment(s) made to landlord/payee and there was no inaccurate particulars of income furnished in its return with regard to such payment. In the case of CIT v/s Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC), the Supreme Court had to deal with the matter as to what amounts to furnishing of inaccurate particulars of income, in the context of section 271(1)(c). Reviewing the earlier judgments of the Supreme Court in case of Dilip No. Shroff vs. Jt. CIT (2007) 291 ITR 519 (SC) and UOI vs. Dharmendra Textile Processors & Ors. (2008) 306 ITR 277 (SC), the Apex Court held that, where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false, there is no question of inviting the penalty u/s 271 (1)(c). A mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. This was followed in the case of Ramkrishna Shetty vs. ACIT (supra).

11. It was further submitted that a perusal of the show cause notice issued u/s 274 r/w 271(1)(c) dated 28.12.11, it is not at all clear as to for what precise charge, the appellant was asked to show cause viz. whether the charge is that the assessee has furnished inaccurate particulars of income or it was for concealing particulars of such income in as much as a bare perusal of the said show cause notice clearly reveal that the inappropriate words/unwanted charge have not been struck off. The AO neither scored out not ticked which particular part of alleged offence, he was relying upon.

Even in the assessment order, there appears no satisfaction at all recorded with any of the two limbs of the charge. In other words, the assessment order is completely silent and no satisfaction with regard to either of the two offenses is appearing.

It was submitted that the AO did not appreciate that the two limbs i.e. the concealment of income and furnishing of inaccurate particulars of income carry different connotations, as held in the case of T. Ashok Pai (2007) 292 ITR (SC) at page 19. This was taken note of by the Hon’ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory 359 ITR 565 (Karn). The use of both the limbs by the AO mechanically, clearly shows a complete non application of mind on his part and the requisite satisfaction, this way, is not at all discernable from the assessment orders nor from the penalty orders of all the years.

12. It was further submitted that the Hon’ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory (supra) has held that notice u/s 274 of the Act should specifically state as to whether penalty is being proposed to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of income. The Hon’ble High Court has further laid down that certain printed form where all the grounds given in Sec. 271 are given would not satisfy the requirement of law and our reference was drawn to para 59 of the said order.

Therefore, it was submitted that the impugned penalty deserves to be deleted at this stage itself and hence the same kindly be quashed. Hence, the impugned penalty be deleted in full.

13. On the other hand, ld. DR supported the orders of the lower authorities. The ld DR submitted that the fact that the tax has been deposited in the subsequent year is immaterial for the reason that each assessment year is independent assessment year and whether the assessee has furnished inaccurate particulars of income or concealed his particulars of income has to be seen qua each assessment year independently. Further, the ld DR submitted that there is no bonafide explanation furnished by the assessee either during the assessment proceedings or even during the penalty proceedings for non-deduction of TDS on the rent payment. In light of that, he submitted that the AO was right in levying the penalty u/s 271(1)(c) and which has rightly been upheld by the ld CIT(A).

14. We have heard the rival contentions and pursued the material available on record. Firstly, we note that the amendment to section 40(a)(ia) by the Finance Act 2010 was in relation to transactions where after deduction of tax during the previous year, the same was paid on or before the due date of filing of the return of income under section 139(1). Prior to the amendment, the extended period of deposit of taxes so deducted was limited to cases where the deduction of tax is made during the last month of the previous year and extended period was given for deposit on or before the due date of filing of the return of income under section 139(1). Post amendment, it was provided that no disallowance shall be made where the tax has been deducted at anytime during the previous year and paid before the due date of filing of return of income. The said amendment has been held retrospective in nature w.e.f 1st April 2005 by the Hon’ble Rajasthan High Court in case of Harish Chand Ahuja (supra).

15. However, we find that in the facts of the present case, the decision of the Hon’ble Rajasthan High Court in case of Harish Chand Ahuja doesn’t come to its rescue. The reason for the same is that in the instant case, it is not a case of deduction of tax during the previous year rather it is a case where the assessee has failed to deduct tax at source during the previous year as its clear from the findings of the AO in the assessment order which remain uncontroverted before us. Where the tax has not been deducted at source during the previous year, there is no change in law as per the Finance Act, 2010. The law is clear that where the tax has not been deducted during the previous year and has been deducted in the subsequent financial year, the expenditure shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. In light of the same, the AO has rightly invoked the provisions of section 40(a)(ia) for non-deduction of tax on rent payments credited and paid during the subject financial year.

16. Further, we don’t agree with the contention of the ld AR that no penalty can be levied simplicitier on the basis that the assessee was having the option of making the payment either within the prescribed due date or if failed, has the liberty to deposit in a later year where also the law permits the deduction on payment basis. In our view, it is not really an option rather it relaxes the rigour by way of providing an extended time for deposit for the limited purposes of allowance of a particular expenditure. At the same time, it doesn’t absolve the assessee from interest and penal consequences for nondeduction or non-payment of taxes. We find that similar provisions exist under section 43B where also the prescribed payments are disallowed if not paid before the due date of filing of return of income and allowed on payment basis. Further, purely from an accounting stand point also, where the financial statements are drawn, there are transactions which are closely connected and have effect on the transactions in the subsequent financial year for example, the closing stock of a year will become the opening stock for the next year. The question is whether there is dispute regarding either quantification or valuation of the closing stock, will that become a non-issue when it comes to levy of penalty just because whatever final value of closing stock is determined, it will become the opening stock of the next financial year. Similarly, there could be dispute regarding rate of depreciation on fixed assets and can it be said that whatever rate of depreciation is finally determined, the same will be a non-issue as far as penalty is concerned just because where the rate of depreciation is say, reduced for a particular year, to that extent, claim of depreciation is reduced but at the same time, closing written down value will be increased and the claim of depreciation is effectively deferred to the extent of differential in rate of depreciation.

17. In our view, as far as levy of penalty under section 271(1)(c) is concerned, what has to be seen is whether the conditions stipulated in Section 271(l)(c) are satisfied or not and it has to be examined qua each assessment year. The condition precedent for levying the penalty is the satisfaction of the AO that there is a concealment of the particulars of the income or there is furnishing of inaccurate particulars of income. Once the AO comes to such conclusion, the law mandates that before imposing penalty, the assessee must be heard. The assessee should be given the opportunity to offer his explanation. Once such an opportunity is given and the assessee fails to offer the explanation or offers explanation which is found to be false, then the penalty will follow as prescribed under Clause (iii) of clause (c) of subsection (1) of Section 271. Where the assessee offers an explanation and substantiate the explanation, the question of imposing penalty would not arise. Even in cases where he fails to substantiate the explanation, but if he proves that explanation offered is a bona fide one and all the facts relating to the same and material to the computation of his total income has been disclosed by him, then, in law, a discretion is vested with the authority not to impose penalty.

18. Now, coming to another contention of the learned AR that there was not a definite conclusion in the assessment order at the time of initiation of proceedings and there being no satisfaction recorded discernable there from as to on what precise basis the penalty has been imposed, the impugned penalty deserves to be deleted in full.

19. In this regard, we refer to the decision of the Hon’ble Karnataka High Court in case of Manjunatha Cotton (supra) to which our reference was drawn by the ld AR wherein the Hon’ble High Court in context of recording of satisfaction and initiation of penalty proceedings at Para 53 has held as under:

“53. From these discussion, it is clear that condition precedent for initiation of penalty proceedings under Section 271(l)(c) is existence of condition referred to in the said section. The person initiating penalty proceedings should be satisfied about the existence of said conditions which should be reflected in the assessment orders passed by them. In a given case, after appreciating the entire records, the Officer passing the order may categorically state that he is satisfied that the assessee has concealed income. Once such a finding is recorded that is sufficient to initiate penalty proceedings. Assuming such a categorical finding is not recorded in the order, at least, he has to record facts as contemplated in Explanation 1. If these facts are discernible from the assessment order, the deeming clause in Explanation 1 is attracted and the income is deemed to have been concealed. That gives the jurisdiction to the Officer passing the order to initiate the penalty proceedings. If the Officer passing the assessment order is the Assessing Officer, in the said order, the aforesaid facts are not discernible, at least he must direct initiation of proceedings under Section 271(l)(c). Then Section (1)(B) is attracted and these conditions deemed to exist which confers jurisdiction on him to initiate penalty proceedings. Section (1)(B) has no application to an order passed by Commissioner of Appeals or Commissioner.”

20. In the instant case, we find that the AO has stated in the assessment order that the penalty proceedings u/s 271(1)(c) of the Act are being initiated separately. Accordingly, as per section 271 (1)(B), condition precedent for initiation of penalty proceedings under Section 271(l)(c) deemed to exist and constitute satisfaction of the AO which confers jurisdiction on him to initiate penalty proceedings.

21. Now, coming to another contention of the learned AR that show cause notice issued u/s 271(1)(c) r/w Sec. 274 of the Act doesn’t state as to whether penalty is being initiated for concealment of income or for furnishing inaccurate particulars of the income as the AO neither scored out nor ticked which particular part of alleged offence he is required to show-cause. It was submitted that the same shows a complete non application of mind on the part of the AO. In support, the ld AR drawn our reference to para 59 of decision of the Hon’ble Karnataka High Court in case of Manjunatha Cotton (supra) which reads as under:

“59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation 1 or in Explanation 1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(l)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee.”

22. As the Hon’ble High Court held in the above case that the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(l)(c) do not exist as such he is not liable to pay penalty. The grounds for levy of penalty are thus linked to the adherence to the Principle of natural justice and it was held that such Principle of natural justice should not be offended. Now, let’s examine how the same is applicable in the facts of the case. In the instant case, the assessee has been issued two show-cause notices. The first show-cause notice dated 28.12.2011 was issued along with the passing of the assessment order dated 28.12.2011 where the assessee was made aware of initiation of the penalty proceedings and thereafter, another show-cause notice was issued on 18.06.2012. Though the first show-cause notice talks about concealing the particulars of income or furnishing inaccurate particulars of income and the latter show-cause notice talks about both concealing the particulars of income and furnishing inaccurate particulars of income, the assessee however chose to ignore both the show-cause notices and neither attended the penalty proceedings nor any written submissions/explanations were submitted before the Assessing officer. Therefore, it is crystal clear the assessee was made aware of the penalty proceedings having initiated against it and was granted two opportunities by the Assessing officer to present its case/offer its explanation. However, the assessee chooses to ignore those show-cause notices and now has come up before us and pleaded that the principle of natural justice has been violated by stating that the show-cause notice is vague. In our view, by not attending to the penalty proceedings before the AO without showing any reasonable cause, the assessee has effectively waived its right to contest at higher appellate forum that his rights to plead have been violated. Even before us, no pleadings have been taken to show that there existed a reasonable cause for not attending to the penalty proceedings and offering its explanation before the AO. Further, no such pleading has been taken before the ld CIT(A) as well regarding violation of principle of natural justice. Having recorded the satisfaction in the assessment order, the penalty proceedings have been validly initiated and the issuance of notice u/s 274 is in furtherance of recording of such satisfaction and has thus to be read along with the assessment order and not independent of it. In our view, the assessee has rightly been made aware of the initiation of penalty proceedings and it for reasons best known to it choose to remain silent and failed to offer any explanation during the penalty proceedings. We therefore donot see any infirmity in the initiation of the penalty proceedings and there is clearly no violation of principle of natural justice as canvassed by the ld AR.

23. Now coming to the next issue whether any explanation has been offered by the assessee for not doing the TDS on the rental payments or not and whether such explanation is a bona fide one and all the facts relating to the same and material to the computation of his total income has been disclosed by him. Firstly, it is noted that all the facts relating to nature and quantum of rental payments made to Aircen Copper Pvt Ltd is discernable from the rent account filed by the assessee during the course of assessment proceedings.

In this regard, we refer to the findings of the AO in the assessment order which is reproduced as under:

“On perusal of the rent account filed by the assessee, it was noticed that the assessee has paid and credited the rent amounting to Rs. 21,60,000/- on account of office premises & rent of Testing Lab amounting to Rs. 3,60,000/- in the account of M/s Airen Copper Pvt. Ltd. on 31.3.2009 and the TDS as per Section 194 I of the I.T. Act, 1961 has not been deducted.”

24. Now coming to the explanation offered by the assessee for non-deduction of tax on the rental payment, we find that during the course of assessment proceedings, the assessee has submitted before the AO that the company has paid rent through account payee cheque and TDS has been done as per Income Tax Rules. However, the AO didn’t accept the said explanation for the simple reason that the rent account statement doesn’t show that the tax has been deducted while making the rent payment on 31.3.2009 and secondly, no evidence to support the deduction of tax has been furnished by the assessee. The ld CIT(A) has also returned a finding that “not only did the assessee make an unjustified claimed of deduction but also misled the AO during the assessment proceedings by stating that TDS as applicable had duly been deducted and hence the impugned amount was allowable as per the provisions of section 40(a)(ia). The fact is that the appellant deducted and deposited the due TDS much after the assessment order was passed. This shows that the assessee intentionally furnished inaccurate particulars of income and thereafter made false claims before AO for covering up the default. The above said act and conduct of the appellant clearly amounts to furnishing of inaccurate particulars of income within the meaning of section 271(1)(c).” Before us, the ld AR submitted that this was first occasion/year in which the assessee company was required to make TDS compliance and it was only because of the oversight, this amount escaped the notice of the management.

25. We have given a careful consideration to the above factual matrix. We find that the assessee made a self-contradictory statement before the AO. The reason for the same is that firstly, the tax was not deducted as apparent from the rent account statement furnished during the assessment proceedings. Given that there was no question of deposit of the taxes, a fact which has been confirmed subsequently from the submissions made before the ld CIT(A) and now before us that the tax has been deposited in the previous year relevant to AY 2012-13. The fact remains that tax was not deducted on the rental payments made during the previous year relevant to impunged assessment year. The only explanation which is now forthcoming before us is that this was the first year of compliance and it was due to oversight that the amount escaped the notice of management. The question is even if we believe the said explanation, the question remains is why it took so many years from AY 2009-10 to AY 2012-13 to deposit such taxes. The oversight could be for one year and cannot be overlooked where the oversight continues for so many years. The reality of the situation is that only when the AO in the instant assessment year noticed this transaction and passed the assessment order on 28.12.2011 disallowing the rental expense then the assessee realised its mistake and deposited the taxes. The same is apparent from the TDS voucher placed at APB 4 where the TDS on rent has been debited and Union Bank has been credited with Rs. 2,52,000 and the narration which has been provided is that “Being online TDS paid vide challan no. 92388 dated 14.03.2012 paid for FY 2008-09 as per assessment order dated 28.12.2011.” In light of the same, we are unable to accede to the explanation so offered by the assessee and found the same devoid of any bonafide. In the case of Pricewaterhouse Coopers Pvt Ltd (Supra), the Hon’ble Supreme Court held that the facts of the case are rather peculiar and somewhat unique. It was further held that the assessee made a bonafide and inadvertent computational error while filing its return of income and the fact that the disallowance was reflected in the tax audit report which was filed along with the return of income shows that it was not a case of furnishing inaccurate particulars of income or concealment of income. The said decision therefore was rendered in the context of its peculiar facts and the bonafide of the assessee was established which apparently is not satisfied in the instant case.

26. Before departing, we may add that we have gone through other decisions and authority cited by the ld AR and find that the same have been rendered in the context of their peculiar facts and circumstances of the case and in each of those case, the bonafide for non-deducting the tax at source has been established which apparently is absent in the instant case and hence, these decisions are distinguishable and doesn’t support the case of the assessee.

27. In light of above discussions and in the entirety of the facts and circumstances of the case, we don’t see any infirmity in the order of the ld CIT(A) in confirming the levy of penalty for furnishing inaccurate particulars of income by way of wrongly claiming deduction of rental payments in violation of the provisions of section 40(a)(ia) of the Act.

In the result, the appeal of the assessee is dismissed.

Order pronounced in the open court on 29/09/2017.

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