Penalty : Concealment of income : S. 271(1)(c) of Income-tax Act, 1961 : A.Y. 2004-05 : Incorrect claim for deduction made u/s.10(36) on the basis of advice from counsel : Claim bona fide : No concealment : Penalty not justified.

[CIT v. Deepak Kumar, 232 CTR 78 (P&H)]

For the A.Y. 2004-05, the assessee had made a claim for
deduction u/s.10(36) of the Income-tax Act, 1961 on the basis of the advice
given by the counsel. The claim was found to be incorrect and accordingly was
disallowed. As regards the disallowed amount, the Assessing Officer held that
there was concealment of income and accordingly imposed penalty u/s.271(1)(c) of
the Act. The Tribunal cancelled the penalty.

On appeal by the Revenue, the Punjab and Haryana High Court
upheld the decision of the Tribunal and held as under :

“(i) The question concerning bona fide mistake or belief is
more or less a question of fact, which has been decided by the CIT(A) on the
basis of the affidavit filed by the counsel. There is no finding of
intentional or motivated mistake which might have been resorted to by the
assessee. It is not unknown that IT returns are filed through the tax experts
in the IT laws and, therefore, the advice given by the counsel can be acted
upon with bona fide belief to be correct.

(ii) There is no rule of law that the aforesaid issue
should have been only before the AO or there was any bar on the assessee not
to raise this issue before the Appellate Authority. The affidavit filed by the
counsel of the assessee has been readily accepted by the CIT(A) as well as the
Tribunal.

(iii) It is well settled that if on the evidence adduced
before the AO or the Appellate forum, a possible view has been taken, then
u/s. 260A, no substantive question of law could be framed merely because
another view is possible.

(iv) The appeal is, thus, without merit and accordingly the
same is dismissed”