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2011 (5) TMI 609 - ITAT, ALLAHABADPenalty u/s 271(1)(c) - wrong claim for carried forward loss to be set off has been made - Held that: The fact relating to the loss determined for each of the earlier assessment years to be set off and carried forward of such loss for each assessment year was within the knowledge of the Department, so it was the duty of the AO to verify from the record and allow the set off for which the assessee was actually eligible in accordance with law. The mistake in question occurred on the part of the Consultant who filled the income-tax return form on the basis of the audit report under section 44AB. Since the mistake occurred under a bona fide belief based on the advice of the Tax Consultant, it cannot be held that there was any concealment of income or furnishing of inaccurate particulars of income, particularly when the amount to be set off was relating to the earlier years and the record, in the shape of income-tax returns pertaining to the earlier years, was already available with the Department - Decided in favor of the assessee Disallowance of donation and charity - Held that:- Since the Assessing Officer, while levying the penalty under section 271(1)(c), wrongly included the amount of Rs. 75,000 i.e. the donation to "Wheeler Sewa Trust" while making the addition of Rs. 94,001 on account of donation and charity it appears that AO has not applied his mind while levying the penalty. Furthermore, the amount of donation and charity amounting to Rs. 19,001 was a negligible amount considering the nature of business activities of the assessee and it cannot be denied that in such type of cases these type of expenses are required to be incurred for smooth functioning of business -in favour of assessee. Disallowance of donation claimed @ 50% of the donation under section 80G - Held that:- The said claim was made by the assessee for the reason that recognition under section 80G was available to "Wheeler Sewa Trust" earlier, therefore, there was a bona fide belief to claim deduction under section 80G of the Act. So it cannot be said that the assessee furnished inaccurate particulars or concealed the income - in favour of assessee.
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