No penalty leviable unless the conduct of the assessee is found to be contumacious

Last updated: 23 July 2021
Quick Summary
The Income Tax Appellate Tribunal ruled that a penalty cannot be levied simply because an assessee's expenditure was disallowed. Relying on Supreme Court precedent, the Tribunal found that the taxpayer's claim, even if incorrect, was not inherently bogus. Therefore, a disallowance alone does not prove the furnishing of inaccurate particulars or concealment of income, and penalties should only be imposed if the assessee's conduct is found to be contumacious.

Court :
Income Tax Appellate Tribunal, Mumbai

Brief :
In M/s. Aanya Real Estate Pvt. Ltd. v. Deputy CIT [ITA No. 115/Mum/2020 decided on July 20, 2021] M/s. Aanya Real Estate Pvt. Ltd. ('the Appellant') is a real estate company. During assessment, it was noted that the Petitioner had disclosed payment for Exchange Server Services as revenue expenditure instead of capital expenditure.

Citation :
ITA No. 115/Mum/2020 decided on July 20, 2021

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Bimal Jain
Published in GST
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