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2019 (4) TMI 279 - AT - Income TaxCondonation of delay of 280 days - not filed appeal against penalty being smallness of the amount - revenue has started prosecution of the Director by issuing notice under section 276/277 - appeal filed - HELD THAT:- Considering the facts and circumstances of the case and the ratio of law laid down in B. MADHURI GOUD VERSUS B. DAMODAR REDDY [2012 (7) TMI 1019 - SUPREME COURT OF INDIA], we are of the view that the assessee has acted on the advice of his tax advisor. The assessee acted on the advice keeping in view the cost of litigation, which in our view is a reasonable cause. And the assessee is now compelled to file the present appeal. We have also found that the assessee has got merit in their favour. Levy of penalty u/s 271(1)(c) - assessee debited the capital expenditure of franking charges for increase in authorized share capital without adding back the same in its computation of income - Addition accepted - HELD THAT:- AO has not disputed the contention of assessee in the penalty order. The contention of assessee throughout the proceeding are that the franking charges were inadvertently mistake to be disallowed by the assessee as the same was not reported in TAR. The assessee’s contention is that the error was unintentional and bonafide mistake. The assessee has shown reasonable cause by offering the franking charges during the assessment by offering suomoto disallowance at the cost of repetition, we may ad that the assessee while filing reply to the show-cause notice that assessee realized its error and admitted that aforesaid franking charges ought to have been disallowed. This fact is duly recorded by Assessing Officer in para-2.1 of the penalty order. AO has not countered the bonafide explanation furnished by assessee. In Price Waterhouse P. Ltd. vs. CIT (2012 (9) TMI 775 - SUPREME COURT) held that the penalty under section 271(1)(c) could not be levied, where it involves a mistake by assessee on account of human error - we direct the Assessing Officer to delete the entire penalty.- Decided in favour of assessee.
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