INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Leviability - Incorrect computation of book profit due to erroneous filling up of data in return of income - Bona fide and inadvertent error

Assessee-filed return of income declaring book profit of Rs. 8,49,857 under section 115JB. AO noticed that in audit report, auditor determined the book profit at Rs. 1,52,18,852. Accordingly, the AO computed the book profit at Rs. 1,52,18,852 as reported in audit report. Since the assessee declared book profit at lesser figure, the AO levied penalty under section 271(1)(c) for furnishing of inaccurate particulars of income. Held: It was found that mistake relating to declaration of book profit at lesser figure in return of income, occurred due to erroneous feeding of data while filling up return of income. Therefore, it would be said that the said mistake was bona fide and inadvertent error. It is settled that penalty levied on bona fide mistakes is not justified. Therefore, as assessee committed an inadvertent and bona fide error and did not intend to or attempted to either conceal its income or furnish inaccurate particulars, the penalty levied under section 271(1)(c) would not be sustainable and hence, the same was deleted.

REFERRED : Price Waterhouse Coopers (P.) Ltd. v. CIT (2012) 348 ITR 306 (SC) : 2012 TaxPub(DT) 2967 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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