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Issues involved: The issue raised is the confirmation of penalty u/s. 271(1)(c) of the I.T. Act by the Ld. Commissioner of Income Tax (A) in the case of the Assessee for assessment year 2008-09.
Details of the Judgment: 1. The Assessee, engaged in the business of manufacturing frozen food items, filed a return declaring a loss of &8377; 3,16,19,027. The assessment u/s. 143(3) was completed with a loss of &8377; 2,98,25,260 after certain disallowances. 2. The Assessing Officer imposed a penalty u/s. 271(1)(c) of &8377; 6,09,700 for furnishing inaccurate particulars of income. The penalty was based on disallowances made by the Assessing Officer. 3. The Ld. Commissioner of Income Tax (A) sustained penalty on disallowance of ROC fee and loss on sale of assets but deleted the penalty on disallowance of donation. 4. The Assessee appealed against the penalty order, arguing that the additions were inadvertent mistakes and penalty should not be levied. 5. The Assessee claimed that the Tax Audit Report by the Chartered Accountant did not point out the disallowances. The Assessee also highlighted eligibility for exemption u/s. 80IC. 6. The Tribunal found that the disallowances were due to inadvertent mistakes, not intentional concealment. The Assessee's conduct was not contumacious, and there was no benefit in concealing the items. 7. Citing case laws, the Tribunal held that penalty cannot be imposed for inadvertent mistakes where the Assessee's conduct is not contumacious. 8. Relying on the Hindustan Steel case, the Tribunal emphasized that penalty should not be imposed for technical breaches or bonafide beliefs. 9. Considering the precedents and circumstances, the Tribunal concluded that the levy of penalty was not justified and set aside the orders, deleting the penalty. This judgment emphasizes the importance of distinguishing between inadvertent mistakes and deliberate concealment of income when imposing penalties u/s. 271(1)(c) of the I.T. Act. The Tribunal's decision was based on the lack of contumacious conduct by the Assessee and the bonafide nature of the errors made, ultimately leading to the deletion of the penalty.
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