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2010 (3) TMI 66 - HC - Income TaxPenalty u/s 271(1)(c) – bonafile belief – advice by the counsel - In the return filed by the assessee-respondent, he claimed that the profit on the sale of shares was exempt under Section 10(36) of the Act. The Assessing Officer completed the assessment under Section 143(3) of the Act and it was held that the assessee-respondent had wrongly claimed the profit on sale of shares under Section 10(36) of the Act. The allegation was that he had concealed income to the extent of ₹ 35,21,650/-. While finalising the assessment, penalty proceedings under Section 271(1)(c) of the Act were also initiated and penalty @ 100%, amounting to ₹ 4,10,440/- was imposed. – CIT(A) and ITAT dropped the penalty – held that - We are not impressed with the argument of Mr. Sukant Gupta, learned counsel for the appellant-revenue, that the issue of bona fide belief based on the advise of the counsel should have been raised before the Assessing Officer and there was no scope for raising such an issue before the CIT (A) because it is an after thought. However, we do not find any merit in the aforesaid submission. It is not unknown that income tax returns are filed through the experts in the Income-tax laws and, therefore, the advise given by the learned counsel can be acted upon with bona fide belief to be correct. There is no rule of law that the aforesaid issue should have been pressed only before the Assessing Officer or there was any bar on the assessee-respondent not to raise this issue before the Appellate Authority – penalty not to be imposed
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