INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Making of wrong claim due to inadvertent error -

AO levied penalty under section 271(1)(c) as regards disallowance made by AO of provision for gratuity claimed by assessee. As per AO, though auditor in his tax auditor report had clearly mentioned that impugned expenses were not allowable under the Act, but despite that assessee did not make any disallowance in computation of income and also contested for deduction of the same.Held: There was disclosure made by tax auditor in tax audit report furnished in Form 3CD. Thus it could not be that assessee deliberately furnished inaccurate particulars of income. Similarly, AO got information about disallowance of provision for gratuity from tax audit report only. He had not carried out any investigation for detecting claim of assessee towards provision for gratuity which was not allowable as deduction. Through a bona fide and inadvertent error, assessee while submitting its return, failed to add provision for gratuity to its total income and had not intended to or attempted to either conceal its income or furnish inaccurate particulars. Accordingly, assessee could not be visited with penalty under section 271(1)(c).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 271(1)(c)

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