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TMI Blog2018 (10) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty was levied by the AO on account of furnishing inaccurate particulars of income. There is no dispute that the deduction was claimed by the assessee u/s 10B of the Act on the basis of audit report obtained in Form 56G which is placed on record. Thus, in our considered view the assessee should not suffer on account of penalty by the mistake committed by the auditor. We note that the penalty cannot be levied if any error has been committed by the auditor by giving a certificate specifying the wrong amount of deduction u/s 10B of the Act. Thus, we direct the AO to delete the penalty levied by him u/s 271(1)(c). No reason to interfere in the order of Ld CIT(A). Hence, the ground of appeal of the Revenue is dismissed. - I.T.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40/- under section 271(1)(c) of the Act. 4. Briefly stated facts are that the assessee is a limited company and engaged in the manufacturing/trading business of dyes etc. The assessee during the year has claimed deduction u/s 10B of the Act for ₹ 12,18,36,697/- only. The assessee while calculating the exemption u/s 10B of the Act has taken total sale of ₹ 97,98,37,069/- as against ₹ 1,11,58,00,109/- in its denominator. As such, the assessee has not reduced the sum of ₹ 13,59,63,040 representing the interdivisional transfer included in the total sales. Accordingly, the assessee has claimed excess deduction u/s 10B of the Act for ₹ 1,48,46,107/-. Accordingly, the AO made the disallowance of the excess deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s 10B of the Act was obtained from the qualified CA in form 56G. Thus, the assessee should not be penalized on account of mistake committed by the auditor of the assessee. 5.2 The assessee during the assessment proceedings conceded its mistake for not excluding the amount of interdivision sales. 5.3 The Ld CIT(A) after considering the submission of the assessee deleted the penalty levied by the AO under section 271(1)(c) of the Act. 2.3. Decision: I have carefully considered the facts of the case, the penalty order and the written submission of the appellant. The pennant the AO has imposed a penalty under section 27(1)(c) of the Act as the claim of deduction under section 10B was reduced by an amount of ₹ 84 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had shown sales and purchases net of the interdivisional transfers. The appellant has not misrepresented or concealed any facts. The mistake has occurred as the chartered accountant who had issued form 56G had wrongly calculated the claim of deduction under section 1 OB on the basis of information available on record. It is also to be noted that in the course of earlier round of assessment proceedings, the claim of deduction was accepted. Therefore, in view of these facts and circumstances, no penalty is eligible on the appellant under section 271(1)(c). The appellant has rightly placed reliance on the judgment of Gujarat High Court in the case of BTX Chemicals, 288 ITR 196. The other judgments of Gujarat High Court in the case of Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 7. We have heard the rival contentions and perused the materials available on record. The instant case relates to the excessive deduction claimed by the assessee u/s 10B of the Act. Accordingly, the penalty was levied by the AO on account of furnishing inaccurate particulars of income. 7.1 There is no dispute that the deduction was claimed by the assessee u/s 10B of the Act on the basis of audit report obtained in Form 56G which is placed on record. Thus, in our considered view the assessee should not suffer on account of penalty by the mistake committed by the auditor. In this regard, we find support and guidance from the judgment Hon ble Bombay High Court in the case of Sesa Resources Ltd. Vs. ACIT reported in 38 taxmann.com 224 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10B was claimed by furnishing the report in FORM No. 56G read with Rule 16E of the Income Tax Rules, 1962. So, all the facts were disclosed to the AO. 10. From the record, it also appears that the claim denied by the AO under Section 10B was based on the facts disclosed in the return of income filed by the assessee. It is also evident that uncollected sums were export income from the software which was not approved by the clients. So, the assessee did not receive the same in time. As and when payment received, the same was disclosed to the Department. 11. In view of above, the variation between the claim made by the assessee under Section 10B of the Act vis-a-vis the claim disallowed in the assessment, occurred solely owi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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