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2013 (5) TMI 640 - AT - Income TaxPenalty u/s. 271(1)(c) - non entitlement for exemption u/s. 10B - assessee submitted that the Chartered Accountant of the assessee company while issuing the certificate in support of the book profits u/s. 115JB erroneously deducted the exempt income u/s. 10B under bona fide belief inadvertently failed to take note of the amendment brought in the relevant provisions of I.T.Act vide Finance Act 2007 w.e.f. 01.04.2008 whereby the exempt income u/s. 10B is not permissible for deduction while computing the book profits u/s. 115JB - Held that:- It may be observed that the related amendment has been brought vide Finance Act 2007 w.e.f. 01.04.2008 and the relevant assessment year was the first year during which the said amended provisions were to be implemented. The assessee company for its tax matters relied upon its Chartered Accountant. But the Chartered Accountant inadvertently failed to take note of the amended provisions and claimed exemption u/s. 10B. In such circumstances, the present case is not a case of concealment of income or furnishing of wrong particulars of income, rather it is a case of wrong claim of exemption which was based on bona fide belief, thus this is not a fit case for levy of penalty - in favour of assessee. Penalty u/s. 221(1) r.w.s. 140A(3) - default in payment of self assessment tax - Held that:- Despite availing sufficient opportunity, the assessee in this case failed to make the payment of tax at the time of passing of penalty order of the AO. Even the assessee could not substantiate its contention of financial crunch with any supporting evidence. However, the fact which cannot be ignored is that the assessee made the entire payment of tax along with interest before preferring the penalty appeal before the CIT(A) i.e. within a very short period of 30 days. No doubt, while imposing penalty @100% on the defaulted amount the AO did not record his reasons for the same. Hence, levy of maximum penalty in this case @100% of the defaulted amount is not justifiable. But reducing the same to almost negligible amount will also be not justified in face of the statutory provisions of the Act. Thus in the interests of justice amount of penalty is reduced to 1/3rd of the amount imposed by the AO. Partly in favour of assessee.
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