Penalty: Important Jugements

Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) (Favoring assessee)
Associated Cement Co. Ltd. Vs. CTO (1981) 4 SCC 578 (favoring assessee)
Director of Enforcement Vs. M.C.T.M. Corporation (P) Ltd. (1996) 2 SCC 471,(favoring revenue)
Union of India Vs. Dharamendra Textile Processors (2008) 13 SCC 369 (favoring revenue)

CCE Vs. Pepsi Foods Ltd. (2011) 1 SCC 601 (favoring asseessee)

Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) Held that 
An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal

No Penalty leviable where disclosure made in audit report regarding non deduction of TDS

Decision of ITAT Delhi in case of New Horizon India Ltd. rendered on 5-5-2010

FACTS OF THE CASE

During the course of assessment proceedings, the Assessing Officer found that assessee had made certain payments, totalling Rs. 7.15 lakhs, on account of royalty, advertisement etc., on which tax at source had not been deducted. The auditors of the assessee had themselves quantified those payments as inadmissible under section 40(a)(ia); and the audit report was attached with the IT return. However, the same had not been reduced while computing the total loss for taxation purposes. The assessee had agreed to the disallowance with the condition that it will be allowed in the next year. The Assessing Officer held that as per the provision of section 40(a)(ia), the expenditure of Rs. 7.15 lakhs was not deductible. Hence, the Assessing Officer disallowed the same and gave further remark that as per the provision of section 40(a)(ia), the same will be allowable in the next assessment year, i.e., the year in which it would be paid by the assessee. On the above disallowance, penalty under section 271(1)(c) was also levied. The Commissioner (Appeals) confirmed the levy of penalty.