By K. B. Bhujle, Advocate
Principal CIT vs. Manzoor Ahmed Walvir; 400 ITR 89 (J&K):
For the A. Y. 2009-10, the assessee had made a claim and had disclosed the relevant facts. The claim involved the interpretation of section 40(a)(ia) of the Act, and in particular the word “payable. There were different judgments of the High Courts both in favour of the assessee and against the assessee. The claim was disallowed by the Assessing Officer. On that basis, the Assessing Officer also imposed penalty u/s. 271(1)(c) of the Act for concealment of income. The Tribunal deleted the penalty.
On appeal by the Revenue, the Jammu and Kashmir High Court upheld the decision of the Tribunal and held as under:
“i) There had been disallowance by interpreting the word “payable” in section 40(a)(ia) to include payments made during the year. Some High Courts had taken the view that the expression “payable” did not include amounts paid, while others had taken the view that the expression “payable” included amounts paid during the year. The Supreme Court finally resolved the controversy in Palam Gas Services vs. CIT; 394 ITR 300 (SC) holding that the expression “payable” included not only the amounts which remained payable at the end of the year, but also the amounts paid during the year.
ii) When the assessee made the claim, this issue was debatable and, therefore, in so far as the deduction of tax at source on amounts paid was concerned, the position was that, while it could be made the subject of disallowance, it could not form the basis for imposing a penalty. The deletion of penalty by the Tribunal was justified.”
