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2019 (6) TMI 732 - ITAT MUMBAIRevision u/s 263 - Penalty u/s 271(1)(c) dropped - voluntarily disclosure of the income that was on account of bonafide reasons understated by him in his return of income - HELD THAT:- AO 's finding favour with the claim of the assessee that there was a bonafide mistake on his part in understating the income which thereafter, in the course of the assessment proceedings was voluntarily offered by him for tax, had thus, dropped the penalty proceedings which were initiated by him u/s 271(1)(c) while framing the assessment. We are of the considered view that the A.O in totality of the facts of the case, had in all fairness, by adopting a plausible view dropped the penalty proceedings which were initiated by him u/s 271(1)(c). As such, we are of a strong conviction that though the Pr. CIT might not have been persuaded to subscribe to the aforesaid view so taken by the A.O, however, we are afraid that the same at least would not have justified exercise of the revisional jurisdiction by him u/s 263 for the sake of substituting his view as against that of the A.O. Insofar the Explanation 2 of Sec.263 relied upon by the Pr. CIT is concerned, we are unable to comprehend as to how the same could have been put into service for dislodging the plausible view arrived at by the A.O. Admittedly, the dropping of the penalty proceedings u/s 271(1)(c) by the A.O on the basis of an ‘order sheet’ noting is not found to be happily worded, however, the same cannot lead to an inference that there was no application of mind by the A.O while so concluding. At this stage, it would be relevant to point out that the Pr. CIT while rushing to the view that there was no proper application of mind by the A.O while dropping the penalty proceedings, had however, failed to consider the reply of the assessee that was filed by him in the course of the penalty proceedings. Perusal of the ‘order sheet’ noting dated 28.04.2016 of the A.O reveals that he had only after being satisfied with the reply dated 01.04.2016 filed by the assessee, therein concluded that the penalty proceedings initiated u/s 271(1)(c) were to be dropped. Our aforesaid view that merely because the A.O had remained silent on a point would not mean that there was no application of mind on his part is fortified by the judgment of CIT Vs. Fine Jewellery (India) Ltd. [2015 (2) TMI 732 - BOMBAY HIGH COURT] A.O in the totality of the facts of the case had arrived at a plausible view that no penalty u/s 271(1)(c) was liable to be imposed on the assessee, and therein dropped the penalty proceedings, therefore, merely because the Pr. CIT was not satisfied with the said view of the A.O would not justify revision of his said order. - Decided in favour of assessee.
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