Section 271 of Income Tax Act, 2017—Levy of penalty u/s 271(1)(c)—In the instant case, AO levied 100% penalty u/s 271(1)(c) on ad hoc disallowance on account of travelling expenses to the extent of 20 lakh.

Held that— Assessee cannot be penalized for making a claim of expenditure, which is not acceptable to AO. In fact it is found that .A.O. disallowed expenditure on ad hoc basis. This itself shows that there is no dispute regarding all particulars being filed by assessee which is disallowed in part by Ld. AO on premise that it has not been incurred exclusively and wholly for purpose of business of assessee. The Ld. AO has not brought on record anything contrary to establish that claim of assessee do not pertain to travelling expenses. From paper book filed before us it is observed that assessee has placed vouchers and invoices raised by airlines in respect of payments made for travel by its officials. Further Assessing Officer has not found fault with explanation offered by assessee in response to notice u/s 274 of the Act. Merely because disallowance has been made which has been confirmed by CIT(A), he proceeded to levy penalty on ad hoc disallowance. As we are deleting penalty levied, we do not wish to venture into expressing our view in respect of additional ground raised by assessee and same is kept open.[UTECH DEVELOPERS LTD. VERSUS ITO, WARD 18 (1) , NEW DELHI] [2019] 10 ITCD Online (15) [ITAT DELHI]