TMI Blog2006 (5) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, the facts are that all these three assessees are partners in a firm M/s. Kewal Raj Company. The remuneration receivable by partners was linked with the profit earned by the firm and hence remuneration received/receivable was to vary from year to year. During the year under consideration, the Chartered Accountant of these three assessees prepared the return of income having taken provisional figure of remuneration based on immediately preceding year and on the basis of un-audited account of the firm. In the immediately preceding year, the remuneration was considered at Rs. 13,30,551 while during this year, it was shown provisionally at Rs. 13,44,480. Subsequently, the actual remuneration received was worked out at Rs. 17,81,576, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income on 25-2-2003 and paid self-assessment tax accordingly; and hence, no penalty should be levied; but the explanation of the assessee was not accepted by the Assessing Officer for the reason that these assessees have revised their return only after lapse of 16 months and that too after issue of query regarding discrepancy by the Assessing Officer. Accordingly, the Assessing Officer levied penalty of Rs. 2 lakhs in each case under section 271(1)( c ). All the assessees carried the matter in appeal before learned CIT(A). Learned CIT(A) deleted the penalty in all these three cases by holding that explanation of the assessee is bona fide and acceptable and mistake is inadvertent and hence, no penalty is leviable. Now, the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that there was no mala fide intention of the assessees and it is a bona fide mistake committed by the Articled Clerk, Shri Raj Baid working with Shri Shashi Mehra, Chartered Accountant. Afffidavit of Shri Shashi Mehra, CA and confirmation of Shri Raj Baid, Articled Clerk were submitted in support of this contention. It was also submitted that since this is a case of bona fide mistake without any mala fide intention, levy of penalty is not justified and hence, order of learned CIT(A) should be upheld. Reliance was placed on the following judicial pronouncements : l CIT v. Skyline Auto Products P. Ltd., 271 ITR 335 (MP) l K.C. Builders v. ACIT , 265 ITR 562 (SC) l CIT v. Deep Tools Pvt. Ltd., 274 ITR 603 (P H) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income in case of all these three assessees is not correct but since, this is on account of bona fide mistake, penalty under section 271(1)( c ) is not leviable because it was not a deliberate act on the part of the assessee. It is noted by the Assessing Officer that all the three assessees have taken interest income from firm correctly at Rs. 2,36,728 in each case; but only amount of remuneration was considered at lower figure. It supports the case of the assessee because interest income from firm can be calculated correctly even at the time of making provisional computation; but amount of remuneration cannot be correctly computed until income of the firm is finalized; and hence, it is quite possible that statement of income w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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