By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punjabi
Bhadresh Doshi
Chartered Accountants
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New Page 1
39 (2010) 38 DTR (Mumbai) (Trib.) 101
Yogesh R. Desai v. ACIT
A.Y. : 2003-04. Dated : 1-2-2010
S. 271(1)(c) — Deduction claimed on the basis of advise of
the tax consultant supported by tax audit report — Penalty cannot be levied on
the disallowance of the same.
Facts :
Deduction u/s.80-O was claimed by the assessee which could
not be justified during the assessment proceedings. Finally, the assessee
accepted before the AO that the deduction was claimed erroneously and
inadvertently, as guided by his tax consultant.
Upon disallowance of the same, the penalty u/s. 271(1)(c) was
levied by the AO which was confirmed by the CIT(A).
Held :
It is settled law that penalty u/s.271(1)(c) is a civil
liability and the Revenue is not required to prove willful concealment as held
by the Supreme Court in the case of UOI v. Dharamendra Textile Processors &
Ors., 306 ITR 277. However, each and every addition made in the assessment
cannot automatically lead to levy of penalty for concealment of income.
Even if some deduction or benefit is claimed by the assessee
wrongly but bona fidely and no mala fide can be attributed, the penalty would
not be levied. The claim of deduction u/s.80-O was claimed on the basis of
advise of the tax consultant supported by tax audit report. Therefore there is
no concealment or furnishing of inaccurate particulars on the part of the
assessee and hence the penalty was deleted.
