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2020 (4) TMI 259 - ITAT JAIPURPenalty u/s 271(1)( c) - Addition on account of interest on FDR - difference in method of calculating the interest income - assessee was maintaining multiple accounts and was estimating the accrual income by way of interest on unmatured Fixed deposit and this estimation can be at variance with the working of the bank - HELD THAT:- Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then no penalty can be levied. We are conscious of the fact that law for making addition in quantum proceedings is different from the law for imposing penalty. In recognition of this fundamental difference, both proceedings have been kept separate and independent. Provisions of Section 271(1)( c) of the Act give discretionary powers to the authority levying penalty to levy or not levy penalty in the case of concealment of income or furnishing inaccurate particulars of income. Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs State of Orissa [1969 (8) TMI 31 - SUPREME COURT] laid down a ratio that penalty should not be imposed merely because it is lawful to do so. AO has to exercise his discretion judiciously. Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then in that eventuality no penalty can be levied. Our this view is fortified by the decision in the case of CIT vs Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee.
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