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2015 (12) TMI 830 - CALCUTTA HIGH COURT

2015 (12) TMI 830 - CALCUTTA HIGH COURT - TMI - Penalty proceedings u/s 271(1)(C) - addition being the professional income included in the income from mutual funds and disallowance on account of partners remuneration debited to the P/L account - Tribunal upheld the order of the CIT(A) in deleting the penalty - Held that:- The mistake was committed by the accountant of the assessee. Even it was not noticed by the AO, and the assessee itself during the course of assessment proceedings while prepar .....

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in the original partnership deed was not found to be false. We, therefore, keeping in view of the ratio laid down by the Hon’ble Supreme Court in the case of Price Waterhouse Coopers Pvt Ltd [2012 (9) TMI 775 - SUPREME COURT] are of the view that the ld. CIT(A) was justified in deleting the penalty so levied by the AO. - Decided in favour of assessee - GA 2541 of 2015 & ITAT 104 of 2015 - Dated:- 2-12-2015 - SOUMITRA PAL AND MIR DARA SHEKO, JJ For the Petitioner : Mr. D. Chowhdury, Adv. For the .....

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vocate for the respondent. It appears that while passing the assessment order the Assessing Officer had initiated penalty proceedings under Section 271(1)© of the Income Tax Act, 1961 and had passed an order. Aggrieved, the assessee preferred an appeal before the CIT(A). The CIT(A) while deleting the imposition of penalty had held as under : 4. I have considered the submission of the appellant and perused the assessment order as well as the penalty order. I have also gone through the assess .....

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remuneration debited to the P/L account. On both the above-mentioned additions/disallowances, the AO also initiated penalty proceedings u/s. 271(1)(c) of the Act. It is observed that in the P/L account, the appellant had credited sum of ₹ 50,29,581/- under the head income from mutual fund . However, in the said income, sum of ₹ 34,66,017/- was included which was actually the professional income. Hence, the said income was added by the AO as income from professional and accordingly th .....

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ation. On careful consideration of the facts, I am of the opinion that the AO was not justified in imposing the penalty u/s. 271(1)(c) of the Act. On perusal of assessment record and assessment order, it is observed that the AO had made the addition of ₹ 34,66,017/- as business income under the heading Mis-classed Income . It is also observed that nowhere it is mentioned that the mistake of inclusion of some professional income with the income from mutual funds was detected by the AO and i .....

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that the mistake of including certain account of professional income in the ledger account of income from mutual fund was due to mistake of the Accountant and that the said mistake was a bona fide mistake and not an intentional one. I am of the opinion that merely for the reason that certain additions/disallowances has been made in the assessment order, it cannot lead to conclude that the assessee has concealed its income or has filed inaccurate particulars of his income. The explanation offere .....

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d by the appellant was not found to be false or not bona fide. In view of above facts and the principles laid down in the various judicial pronouncements, it is to be held that the AO was not justified in imposing the penalty u/s. sec 271 (1)(c) at ₹ 12,59,860/-. The AO is directed to delete the penalty imposed by him. In the result, the appeal is allowed. The Department, being aggrieved by the order of the CIT(A), preferred an appeal before the Tribunal. The Tribunal, as noted, while dism .....

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