The Tax Publishers2020 TaxPub(DT) 4918 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Bona fide mistake leading to double deduction claimed by assessee, could not lead to levy of penalty under section 271(1)(c).

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Bona fide mistake leading to double claim of deduction -

AO levied penalty under section 271(1)(c) on the ground that assessee could not submit relevant documents to the extent of auditors' remuneration claimed twice. Assessee's case was that assessee debited audit fees after making payment directly to legal and professional fees after deducting proper TDS. Assessee once again passed a journal entry for audit fee to be payable and debited the same, in auditors remuneration account. Assessee had not noticed this mistake until same was pointed out by AO. Assessee accepted the same and same was rectified in the books and respective entries, were passed in subsequent assessment year. Held: Mistake was not detected by assessee since it had debited same expenditure in two different ledger accounts. As mistake was pointed out by AO and assessee had reversed whole provisions made by it at the year end this type of mistake was possible while making provisional entries at the year end. Considering total income declared by assessee, there was no reason for assessee to indulge in concealing the income or furnishing inaccurate particulars to the extent of expenditure disallowed by AO and therefore, levy of penalty was not justified.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09


INCOME TAX APPELLATE TRIBUNAL RULES, 1963

Section 34(5)(c)

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