High Court Takes Liberal View On Section 271(1)(c) Penalty

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Thu, Jul 26, 2012 at 11:07 AM
Subject: Message from EGroup of SolapurCAs High Court Takes Liberal View On S. 271(1)(c) Penalty
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Societex (Delhi High Court)

No s. 271(1)(c) penalty if wrong claim caused by "bona fide mistake"

 

The AO levied s. 271(1)(c) penalty in respect of two issues: (i) claim of depreciation in respect of properties that were assessed under the head "house property" and (ii) claim of deduction in respect of provision for income-tax. The CIT (A) & Tribunal deleted the penalty on the ground that the claim for deduction in respect of income-tax was a "human bonafide clerical mistake" as the assessee was a firm not having expert chartered accountants on its payroll. In appeal before the High Court, the department relied on Zoom Communication 327 ITR 510 and Escorts Finance 328 ITR 44 where it was held that as under no circumstances could an assessee have claimed provision for tax as a deduction, penalty was imposable. HELD by the High Court dismissing the appeal:

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Regards,

Editor,

itatonline.org

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