INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Leviability - Deduction under section 80-IC - Error in counting eligible assessment years from initial assessment year

Assessee claimed deduction under section 80-IC based on audit report wherein assessment year 2009-10 had been shown as initial assessment year. He contended that due to bona fides mistake of the CA and due to inadvertent error, deduction @ 100%, instead of 25% was claimed and as soon as the mistake in counting the eligible assessment years was realized, taxes along with interest was paid. AO alleged that it was a deliberate attempt on the part of assessee to conceal income, so he initiated penalty proceedings under section 271(1)(c). Held: Auditor mentioned assessment year 2009-10 as initial assessment year, however, CA counted the eligible assessment years from assessment year 2010-11. This clearly shows the human error in counting the eligible assessment years from the initial assessment year and it could not be said that assessee had willfully and intentionally claimed 100% deduction, instead of 25%. Accordingly, AO was directed to delete the penalty levied under section 271(1)(c).

Distinguished:Price Waterhouse Coopers (P.) Ltd. v. CIT, Kolkata--I (2012) 348 ITR 306 (SC): 2012 TaxPub(DT) 2967 (SC), CIT v. Deep Tools (P) Ltd. (2005) 274 ITR 603 (P&H) : 2005 TaxPub(DT) 511 (P&H-HC)-Relied on Union of India v. Dharamendra Textile Processors (2007) 295 ITR 244 (SC) : 2007 TaxPub(DT) 1387 (SC),CIT v. Zoom Communication (P) Ltd. (2010) 327 ITR 510 (Delhi) : 2010 TaxPub(DT) 1957 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2014-15

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