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2019 (6) TMI 466 - ITAT AHMEDABADPenalty u/s 271(1)(c) - interest on income-tax refund received u/s 244A and not included in the Return of Income - bonafide error or mistake - HELD THAT:- As submitted by assessee that it did not not have requisite details of interest embedded in refund amount and came to know about the same only from system generated Form 26AS - there was no willful submission of false return with tested on the touchstone of preponderance of probabilities. As submitted on behalf of the assessee that it is large taxpayer alleged and concealments is disproportionately miniscule which 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 force in the plea of the assessee that a person of his stature diligently paying large taxes would not imagine to keep away something from the very Department which issued the refund and which would be making the assessee’s assessment. Failure of the assessee to look into the aforesaid form at the time of filing return would not indicate any contumacious or obstinate conduct on the part of the assessee, but possibly reflect laxity or some carelessness. Under these circumstances, we are of the view that benefit of doubt should go to the assessee - AO directed to cancel this penalty - Decided in favour of assessee.
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