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TMI Blog2013 (10) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... nt assessment year only which went unnoticed by everyone. - ITA No. : 2423/Mum/2012 - - - Dated:- 23-10-2013 - SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER revenue by : Shri Abanikant Nayak assessee by : Shri Vijay Mehta ORDER PER VIVEK VARMA, JM: The instant appeal is filed by the assessee against the order of CIT(A) 6, Mumbai, dated 05.01.2012, wherein the CIT(A) cancelled the penalty of ₹ 1,82,83,210/-, levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961. 2. The facts are that the assessee is a manufacturer and trader in yarn. In the assessment proceedings, it was seen that the assessee had defaulted in payment of bank interest to the tune of ₹ 7,99,20,976/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing the interest pertaining to loan other than term loan uls.43B(e) and the mistake happened because a the appellant may not have been aware about the amendment made in clause (e) of 43B. AO's observation is correct that Ignorance of law is no excuse but as has been held by Justice Radhakrishnan of Bombay High though ignorance of law is no excuse, that it cannot be presumed that the assessee knows law always. In any case, as it is a case of bona fide mistake, it is not a fit case for levy of penalty for concealment of income, the penalty levied by the AO is, therefore, cancelled . 4. The CIT(A), thus cancelled the penalty. 5. Aggrieved the department is in appeal before the ITAT. 6. Before us, the DR submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 18 (Mad.), wherein it has been observed that a disallowance made u/s. 43B of the Act does not amount to concealment within the meaning of Section 271(1)(c ) of the Act. Likewise in the case of ACIT v/s. Smt. Ujjwala Sanjay Pawar (Supra), the Pune Bench of the Tribunal following the decision of Hon'ble Rajasthan High Court in the case of Chandrapal Bagga vs. ITAT and another (2003), 182 CTR 185 (Raj.) has deleted the penalty. In the said case, the Hon'ble Rajasthan High Court has been pleased to hold that if the default of assessee is attributable to wrong advice of tax consultant, penalty for concealment of income is not leviable. In the present case also, the tax auditor has very clearly accepted his mistake on affidavit (Page N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been substantiated when it was shown that (a) he was assisted by a professional C.A. who had not brought to his notice the applicability of provisions of section 2(22)(e) and (b) by making a statement that this was the first year in which these provisions come to be applied in the assessee's case. It could, thus, be seen that the assessee tendered an explanation which was substantiated and, thus, the burden was cast upon the revenue to prove that the explanation was false so as to invoke the Explanation 1 to section 271(1)(c). Except merely stating that the assessee ought to have furnished the loan particulars voluntarily, along with the return of income, no other reason was assigned by the tax authorities to dispute the bona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng its return, failed to add the provision for gratuity to its total income. The assessee should have been careful but the absence of due care, in a case such as the present, did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income. On the peculiar facts of this case, the imposition of penalty on the assessee was not justified . 10. The DR in the rejoinder submitted that if at all the mistake is committed by the CA, then the CA should be held responsible for this mistake. 11. We have heard the submissions and perused the material on record and case laws cited. We find that the case squarely falls within the parameters of ignorance , even by the CA, who conducted audit a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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