DCIT vs. L & T Infrastructure Finance Co. Ltd. ITAT Mumbai `A’ Bench Before R. C. Sharma (AM) and Sanjay Garg (JM) ITA No. 5329 /Mum/2013 Assessment Year: 2007-08. Decided on: 3rd December, 2014. Counsel for revenue / assessee: Asghar Jain / Heena Doshi

Facts:
The assessee company was formed on 18.4.2006. The first return of income was filed for AY 2007-08. In the return of income the assessee had claimed, u/s. 35D, one-fifth of expenditure incurred towards ROC fees for increase in authorised share capital. In the course of assessment proceedings, on being called to explain the claim, the assessee withdrew the claim. The Assessing Officer (AO) thereafter levied penalty u/s. 271(1)(c) holding that the assessee had furnished inaccurate particulars of income.

Aggrieved, the assessee preferred an appeal to the CIT(A) and in the course of appellate proceedings contended that since it was the first return of income, the expenditure was erroneously claimed and the fact that expenditure was incurred after commencement of business operations. Upon the same being noticed, the claim was withdrawn. The claim was not willful and was made inadvertently. The CIT(A) observed that the assessee had committed a bonafide error and it was not a case of concealment of income or furnishing of inaccurate particulars. Relying on the decision of the Apex Court in the case of Waterhouse Coopers Pvt. Ltd. vs. CIT 348 ITR 306 (SC), he deleted the penalty levied by the AO.

Aggrieved, the revenue preferred an appeal to Tribunal.

Held: The Tribunal observed that the assessee had explained that the error committed by it was inadvertent and due to a bonafide mistake. This was not a case for attraction of provisions of section 271(1)(c). The Tribunal agreed with the CIT(A) that the levy of penalty was not justified. The Tribunal upheld the order passed by CIT(A).

The appeal filed by revenue was dismissed.