Case Law Details
Case Name : ACIT Vs M/s Seaways Shipping Ltd. (ITAT Hyderabad)
Related Assessment Year : 2005- 06
Courts :
All ITAT ITAT Hyderabad
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ACIT Vs M/s Seaways Shipping Ltd. (ITAT) (ITAT Hyderabad) – Non deduction of TDS by the assessee was resulted in dis allowance of expenditure u/s 40(a) (ia), that itself cannot be construed as furnishing inaccurate particulars of income or concealment of income. The assessee has failed to deduct TDS which resulted in dis allowance of expenditure; the mistake committed by the assessee was compensated by disallowing the expenditure. Further, the Revenue cannot penalize the assessee by levying penalty u/s 271(1)(c) of the Act. In order to lev
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Rider: In a nutshell, the proposition put across for due consideration is, – if so otherwise permissible, the assessee’s claim for any deduction, relief, so on, unless found strictly ‘unsustainable’ within the letter of the enactment, ought to be sustained and allowed, notwithstanding that there could be possibly a second view for negating the claim.
In one’s perception, in such disputes on levy of penalty u/s 271 (1)(c), the view taken in a more recently reported HC case must be of useful guidance to follow. The view taken is to the effect that, if on any point of dispute there could conceivably two views possible, then levy of penalty is not justified.However, that is not to say that a second view could come to rescue, even if prima facie it is an incorrect view, and will not stand the test of any valid reasoning but flies in the face of what the law clearly provides and claim by taxpayer runs counter to such provision.
To follow the logic behind the referred HC viewpoint, there seems equally valid reason to successfully urge that in an appropriate case,- depending, of course,on the peculiar facts and circumstances in the given case,- the taxpayer’s claim needs to be allowed if it is based on a plain reading and simple understanding of the enactment ‘in letter’, hence cannot be faulted to be a case of ‘concealment’ of income / its particulars.
Such a proposition being an unfamiliar one is likely to meet with resistance upfront; but, even so, might be worthwhile to be explored in-depth and advanced as a ‘proposition’ for due consideration.