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TMI Blog2015 (6) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... ument of the Ld. counsel for the assessee was on which the impugned action has been conceived the AO. stated that income disclosed in the return which is based on an expert legal opinion, from the simple fact that the assessee was amalgamated with MEL, there was an error in this respect committed by the assessee, in aid of the legal expert, claiming the set off of loss of the amalgamated company. However, an error is never tantamount to penalty and accordingly the proceedings under section 271(1)(c) of the Act is misconceived in view of the fact that the mistake committed under an expert advice cannot expose the assessee to a charge of the "furnishing of inaccurate particulars of income". See CIT v. Reliance Petroproducts Pvt. Ltd. [2010 (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common ground for all the years except variance in amount and for the sake of brevity, we reproduce the ground of appeal for AY 2004-05, and adjudicate the issue from the facts of this year, which is as under: 1. Ld. CIT(A) erred on facts and law to delete the penalty of ₹ 6,42,511/- imposed u/s. 271(1)(c). 2. Ld. CIT(A) erred on law by accepting new evidence which was not furnished either before AO passing the order or before the AO passing penalty order. 3. Briefly stated facts are that the assessee filed its return of income for the relevant AY 2004-05 and claimed set off of loss of ₹ 17,90,980/- relates to MEL, a company under BIFR, which was merged with the assessee company. Original assessment was completed and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of a legal expert and claimed the set off of loss of the amalgamated company at the most it can be said that it has committed an error and an error is never tantamount to penalty and accordingly the proceedings under section 271(1)(c) of the Income Tax Act, 1961 is misconceived in view of the fact that the mistake committed based on the bonafide belief of an expert advice cannot expose the appellant to a charge of the furnishing of inaccurate particulars of income. It is observed that the appellant has mentioned about the facts of merger in the form of notes in the accounts to audited Balance Sheet under the signature of management. Therefore, it is noted that the management did not hide any fact which could lead to the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t off with the profit of the assessee, so that in the computation made, the resultant income was Nil. We find that at that time merger proposal of the company was pending at BIFR as MEL was incurring heavy losses and 31.03.2004 was taken as cut-off date. All losses incurred to this date were supposed to set off against the income of assessee. The assessee sought a legal opinion from an advocate and as per his opinion it adjusted the losses upto 31.3.2004 from the income of assessee. Before us Ld. counsel for the assessee argued that it is not a case of concealment as the expression concealment of income that an income is being hidden, camouflaged or covered up so as it cannot be seen, found or observed or discovered. In fact the charge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on an expert legal opinion, from the simple fact that the assessee was amalgamated with MEL, there was an error in this respect committed by the assessee, in aid of the legal expert, claiming the set off of loss of the amalgamated company. However, an error is never tantamount to penalty and accordingly the proceedings under section 271(1)(c) of the Act is misconceived in view of the fact that the mistake committed under an expert advice cannot expose the assessee to a charge of the furnishing of inaccurate particulars of income . In support of his contention, the A/R also relied upon the decision of the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. 322 TTR 158 (SC) which was also cited by the A.O. a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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