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2011 (1) TMI 868 - HC - Income TaxPenalty - The assessee was an employee of New India Assurance Company Limited - He voluntarily retired and received ex-gratia benefit as per the scheme - Even though only an amount of Rs. 5 lacs was exempted from tax under Section 10(10C) of the Act, the assessee claimed exemption on the entire amount of gratuity - The Assessing officer apart from making addition to the declared income, imposed penalty for taking wrong plea for exemption - Levy of penalty was set aside by the CIT(A) on the ground that claim of the assessee was under a bonafide mistake and the assessee has given all the relevant particulars in the return - This view has been upheld by the Tribunal. - Held that, if the assessee has furnished valid explanation that its claim was put forward under mistaken bonafide belief and not to evade tax, setting aside of penalty cannot be held to be illegal - No substantial question of law arises - Decided in favor of assessee.
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