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2021 (5) TMI 894 - AT - Income TaxLevy of penalty u/s 271(1)(c) - weighted deduction u/s 35(1)(ii) claimed in the original return and later in the return filed in response to notice u/s 148 of the Act, he sought to withdrew the claim of weighted deduction - HELD THAT:- Explanation to section 35(1)(ii) of the Act clearly supports the case of the assessee by categorically providing that the claim of deduction in the hands of the donor (i.e the assessee herein) cannot be disturbed under any circumstances even if the recognition of the donee institution has been withdrawn by the competent authority subsequently. The purpose of this Explanation is that the bonafide belief of the assessee (donor institution) at the time of making contributions should be respected and it cannot be faulted for the fraudulent acts, if any, committed by the donee institution. Despite this , the assessee had come forward to offer the said claim of weighted deduction by withdrawing the same during the course of assessment proceedings and had paid tax thereon. This proves the bonafide intent of the assessee, to purchase peace from the department and to avoid vexatious litigation in this regard. In our considered opinion, this intention of the assessee deserves to be accepted in toto. Hence this is not a fit case for levy of penalty u/s 271(1)( c) of the Act. We find that this issue on the levy of penalty on the very same addition was the subject matter of adjudication by this tribunal in the case of Sammy E Major [2020 (7) TMI 244 - ITAT MUMBAI] for Asst Year 2013-14 wherein the penalty u/s 271(1)( c) of the Act was deleted. In the aforesaid case before this tribunal , the assessee therein made a similar claim of weighted deduction in the original return and later in the return filed in response to notice u/s 148 of the Act, he sought to withdrew the claim of weighted deduction. This tribunal had deleted the penalty u/s 271(1)( c) of the Act in such circumstances. - Decided in favour of assessee.
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