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2019 (4) TMI 1522 - AT - Income TaxLevy of penalty u/s 271(1)(c) - excess claim of gratuity expense - Reasonable cause - Auditors’ failed to exercise proper professional care in detecting the irregularity while finalizing the accounts and their report u/s. 44AB - HELD THAT:- As clearly a dereliction of duty on the part of the Auditors who had apparently also not reported correctly u/s. 44AB. Equally, the tax professional/s preparing the return failed to detect the anomaly which is patent inasmuch as there is no fresh provision for gratuity while the brought forward provision continues to outstand in accounts despite payment of gratuity, and even as the assessee makes a claim for gratuity for the year in a higher than normal sum of ₹ 214.91 lacs. No doubt that the excess claim of gratuity expense (Rs. 47.30 lacs) was a result of a bona fide mistake by the assessee, saving penalty. The assessee has also raised a Ground qua the invalidity of the penalty proceedings on the basis that in the notice u/s. 274, show causing the assessee therefor, the specific limb of s. 271(1)(c) is not struck off, even as, admittedly, the satisfaction recorded by the AO in the assessment order is for furnishing inaccurate particulars of income. The same was, in view of our acceptance of the assessee’s appeal on the principal issue, not pressed nor, consequently, responded to by the Revenue. The impugned penalty is accordingly directed to be deleted. - Decided in favour of assessee.
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