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2018 (8) TMI 123 - AT - Income TaxPenalty u/s.271(1)(c) - bonafide mistake - failure to voluntarily add back provision of gratuity in the computation of income, holding this mistake as malafide even though all facts were disclosed - Held that:- The disclosure of provision for gratuity as income in the balance sheet of the current year filed with the return of income and offering such provision for gratuity as income in preceding year’s computation of income, inspire confidence on the submission of the assessee that it was due to the mistake of Chartered Accountant not to add back such provision in the computation of income of the year under consideration. Therefore, in view of the decision in the case of CIT vs. Rice Mills (SD) (2004 (8) TMI 57 - PUNJAB AND HARYANA HIGH COURT) where it has been held that the fault of Chartered Accountant cannot be visited on the assessee, in our considered opinion, no adverse inference can be drawn against the assessee. This being a bonafide mistake, the assessee did not challenge the quantum addition made by the Assessing Officer. This, however, would not be proper in the interest of justice to saddle penalty against the assessee in the peculiar facts and circumstances of the case and the circumstantial evidences available to prove the bonafide mistake with no ulterior motive on the part of assessee, as assessment proceedings and penalty proceedings are two separate and distinct proceedings. Accordingly, the penalty imposed by the assessee and confirmed by ld. CIT(A) deserve to be cancelled. - Decided in favour of assessee
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