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TMI Blog2019 (6) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... h is an indicator that it is a bonafide error. We find merit in the circumstances narrated on behalf of the assessee. A bonafide error or mistake does not necessarily invite penalty proceedings in every case. It will not be out of context to recollect the observation in the case of Hindusthan Steel Ltd. vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] wherein it was held that penalty cannot be imposed merely because it is lawful to do so. In the absence of any intentional omission of the taxable income from the return of income as reasonably demonstrated on behalf of the assessee, we are disposed to hold that statutory discretion vested with the AO for imposition of penalty ought to have been exercised for the assessee. We see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n interest on income-tax refund received under s.244A of the Act and not included in the Return of Income. 3. When the matter was called for hearing, the Ld.AR for the assessee submitted that the interest income on IT refund was found credited in annual statement in Form No.26 AS generated from the site of the Income Tax Department. The assessee was having no clue about the interest component of ₹ 3,16,272/- included in the IT refund till the return was filed. It was at the time of hearing when reconciliation was made between the books of accounts qua entries reflected in Form No.26 AS that the anomaly in the return was detected. The Ld.AR contended that the assessee did not contest the mistake at all and readily paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not necessarily invite penalty proceedings in every case. It will not be out of context to recollect the observation of Hon ble Supreme Court in the case of Hindusthan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) wherein it was held that penalty cannot be imposed merely because it is lawful to do so. In the absence of any intentional omission of the taxable income from the return of income as reasonably demonstrated on behalf of the assessee, we are disposed to hold that statutory discretion vested with the AO for imposition of penalty ought to have been exercised for the assessee. We see force in the plea of the assessee that a person of his stature diligently paying large taxes would not imagine to keep away s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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