TMI Blog2015 (10) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) TMI 373 - BOMBAY HIGH COURT] to held that the bona fide inadvertent mistake is accepted as reasonable and bona fide explanation for the purpose of section 271(1)(c) and in terms of explanation 1(B) to section 271(1). In view of the above discussion as well as fact and circumstances of the case, we are of the view that the case of the assessee falls under the bonafide and inadvertent mistake and, therefore, the explanation of the assessee is a bona fide explanation in terms of Explanation 1(B) of section 271(1). Accordingly, the penalty levied u/s 271(1)(c) is not sustainable, hence deleted. - Decided in favour of assessee. - ITA No. 8450/Mum/2011 - - - Dated:- 21-10-2014 - Shri Vijay Pal Rao And Shri D. Karunakara Rao,JJ. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alse claim in the return of income and it was not a bonafide mistake but the assessee has concealed its income. 4. Before us, the Ld. Authorized Representative of the assessee has referred the assessment order and submitted that the assessee has filed the return of income declaring a total loss of ₹ 1,26,84,671/-. He has also referred the computation of income and submitted that the assessee itself has disallowed a number of items which were not allowable as per the tax audit report and further unabsorbed depreciation brought forward and carry forward losses under the Income Tax Act are to the tune of ₹ 1,427,292,335/-. Therefore, there was no deliberate or dishonest act on the part of the assessee for not making the disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for concealment of particulars of income or furnishing of inaccurate particulars of income. The explanation to section 271(1)(c) raises the presumption of concealment if a difference is noticed by the Assessing Officer between the reported and assessed income. Mens Rea is not relevant for the purpose of levy of penalty u/s 271(1)(c). It is not a bonafide claim, the advance tax written off to the profit loss account as there is no possibility of two views but the claim of the assessee is absolutely wrong and false, therefore, when the assessee has made a false claim then there cannot be any explanation of bonafide mistake. He has relied upon the decision of Hon'ble Supreme Court in the case of Mak Data (P) Ltd. Vs. CIT (358 ITR 593) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsider the bonafide inadvertent mistake on the part of the assessee. When the computation of income is based on tax audit report and the assessee has disallowed all other items which are not allowable under the provisions of Income Tax Act then missing out a single item which was also left out by the tax auditors in the tax audit report substantiated the explanation of the assessee that it was due to bonafide and inadvertent mistake, the assessee could not disallow the advance tax written off item debited to the P L Account. There is no quarrel on the point that if the assessee makes a false claim then it would not be bona fide explanation that the claim was made due to inadvertence bonafide mistake. However in the case in hand, the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areful cannot be doubted, but the absence of due care, in a case such as the present one, did not mean that the assessee was guilty of either furnishing inaccurate particulars or had attempted to conceal its income. We are of the opinion, given the peculiar facts if this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars 8. Similarly, Hon'ble Jurisdictional High Court incurred in the case of CIT Vs. Beneettee Coleman (supra) has observed in para 2 as under:- So far as question (i) is concerned, the respondent- assessee has cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we see no reason to entertain the proposed question (i). 9. Therefore, in view of the decision of Hon'ble Supreme Court as well as the decision of Hon'ble Jurisdictional High Court the bona fide inadvertent mistake is accepted as reasonable and bona fide explanation for the purpose of section 271(1)(c) and in terms of explanation 1(B) to section 271(1). In view of the above discussion as well as fact and circumstances of the case, we are of the view that the case of the assessee falls under the bonafide and inadvertent mistake and, therefore, the explanation of the assessee is a bona fide explanation in terms of Explanation 1(B) of section 271(1). Accordingly, the penalty levied u/s 271(1)(c) is not sustainable, hence deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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