| The Tax Publishers2019 TaxPub(DT) 2725 (Asr-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Since excess claim of gratuity expense was a result of a bona fide mistake by assessee and assessee had also raised a ground qua the invalidity of penalty proceedings on the basis that in the notice under section 274, show causing assessee therefore, specific limb of section 271(1)(c) was not struck off, even as, admittedly, satisfaction recorded by AO was for furnishing of inaccurate particulars of income, therefore, penalty was liable to be deleted.
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Penalty under section 271(1)(c) - Excess claim of gratuity expense - Reasonable cause - Imposition of
Assessee-society was engaged in business of processing and marketing of milk and milk products. During assessment proceedings, it was found to have claimed per its' said return gratuity expenses, already claimed per its' return for assessment year 2013-14. The same were accordingly disallowed. In penalty proceedings under section 271(1)(c), it was explained that the double claim of gratuity expenditure was on account of a mistake by Accountant, who had, instead of debiting the payment to the Provision A/c in books, debited it to the 'Gratuity paid A/c'. The claim was stated to have been made mistakenly, on account of a clerical error by accountant and mere wrong claim would not though attract penalty under section 271(1)(c). Held: Admittedly tax professional/s preparing the return failed to detect the anomaly which is patent, inasmuch as there was no fresh provision for gratuity while the brought forward provision continues to outstand in accounts, despite payment of gratuity. No doubt that excess claim of gratuity expense was a result of a bona fide mistake by assessee. It had also raised a ground qua the invalidity of the penalty proceedings on the basis that in notice under section 274, show causing assessee therefore, specific limb of section 271(1)(c) was not struck off, even as, admittedly, satisfaction recorded by the AO in assessment order was for furnishing inaccurate particulars of income. Thus, penalty was liable to be deleted
Followed:MAK Data (P.) Ltd. v. CIT-II (2013) 358 ITR 593 (SC) : 2013 TaxPub(DT) 2358 (SC) Price Waterhouse Coopers (P.) Ltd. v. CIT (2012) 348 ITR 306 (SC) : 2012 TaxPub(DT) 2967 (SC) CIT v. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) UOI & Anr. v. Dharmendra Textile Processors & Ors. (2008) 306 ITR 277 (SC) : 2008 TaxPub(DT) 2320 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, AMRITSAR BENCH
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