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2013 (10) TMI 74 - HC - Income TaxWhether Levy of penalty u/S 271(1)(c) of the Income Tax Act is automatic – Held that:- Explanation-1 to Section 271(1)(c). Section 1A deals with a case of assessee failing to offer an explanation or the explanation offered is found to be false. The present case do not fall under that provision - There is no finding recorded by the Assessing Authority or the lower appellate authority that the explanation offered by the assessee is false, their case of furnishing of inaccurate particulars. In the instant case a wrong claim is made for deduction and an explanation was offered, in the absence of a finding that he has failed to prove such explanation as bonafide, no penalty can be imposed - As long as there is no finding by the appellate authority that the explanation offered is not a bonafide one, the imposition of penalty is illegal - Imposition of penalty is not automatic. It is only when there is an attempt to evade tax by offering explanation which is found to be false or not bonafide the penalty can be imposed – Decided against the Revenue.
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