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2022 (4) TMI 152 - ITAT MUMBAILevy of penalty under section 271(1)(c) - assessee's inadvertent claim of expenditure under 'Corporate Social Responsibility' - HELD THAT:- Undisputedly, the assessee had claimed expenditure on CSR under section 37(1) of the Act in the original computation of total income. During assessment proceedings, the assessee voluntarily filed revised computation disallowing the said expenditure. The contention of the assessee is that the expenditure was claimed inadvertently. Explanation 2 to section 37 was introduced by the Finance (No. 2) Act, 2014 with effect from 01/04/2015. The newly inserted Explanation disallows the expenditure incurred on the activities relating to CSR referred to in section 135 of the Companies Act, 2013. The assessment year under appeal being the first year wherein this amendment had taken effect, the assessee ostensibly made a claim of CSR expenditure due to oversight. After having examined the facts and chronology of events, prima facie it appears to be a bonafide mistake. It is relevant to mention here that the assessee had made disclosure about the claim made in the computation of income including the expenditure claimed on CSR. Thus, the assessee has not suppressed the facts. The assessee in computation of income made a claim which was inadmissible and during assessment proceedings the assessee rectified the mistake by filing revised computation. Hon'ble Supreme Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] has held that merely because the assessee had claimed expenditure which was not accepted or was not acceptable to revenue, that by itself, would not attract penalty under section 271(1)(c) Hon'ble Apex Court in the case of Price Waterhouse Coopers Pvt. Ltd. [2012 (9) TMI 775 - SUPREME COURT] has held that no penalty under section 271(1)(c) of the Act could be imposed where there was bona fide and inadvertent error. Thus this is not a fit case for levy of penalty under section 271(1) - Appeal of assessee allowed.
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