TMI Blog2015 (1) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... self during the course of assessment proceedings while preparing the details from its ledger accounts came to know the said mistake had been committed by the accountant and proposed for addition. Therefore, through a bonafide and inadvertent error the assessee claimed the income as exempt and wrongly provided for partners‘ salary. But the submissions of the assessee was that the error occurred by a mistake of its accountant, who treated the said professional income as Income from Mutual Funds’ and the salary was claimed on the basis of the clause mentioned 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. - I.T.A No. 1281/Kol/2011 - - - Dated:- 30-1-2015 - Shri N.K.Saini, AM Hon ble Shri George Mathan, JM For the Appellant : Shri Sanjay,ACIT/ld/Sr.DR For the Respondent : Shri Subash Agarwal, Advocate, ld.AR ORDER Shri N.K. Saini, Accountant Member Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y disclosed by the assessee. It was further submitted that the inclusion of part of professional income under the head Income from mutual fund and claim of partners remuneration were bonafide mistakes. It was stated that the assessee had no intention either to conceal the particulars of income or furnishing any inaccurate particulars of such income. However, the AO has neither considered the submissions of the assessee objectively nor tried to establish the true nature of the mistake done by the assessee s accountant. It was further stated that the professional income of ₹ 34,66,017/- was found to have been included with the income under the head income from mutual fund, which was exempt from tax. However, the reasons for happening such a mistake was that the assessee maintained its bank account with Standard Chartered Bank, all the deposits as well as the withdrawals were made into and through the said bank account. It was further submitted that both the receipts in the nature of professional income and income from mutual funds were deposited into the above mentioned account, which was submitted to the AO at the time of assessment proceedings. It was emphasized that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to buy peace of mind. However, the disallowance made by the AO could not be equated with the concealment of income or furnishing of inaccurate particular of income. 6. The ld.CIT(A) after considering the above submissions of the assessee observed that in the Profit loss a/c the assessee had credited a sum of ₹ 50,29,581/- under the head income from mutual fund . However, in the said sum an income of ₹ 34,66,017/- was included, which was actually the professional income. The said income was added by the AO as income from profession and accordingly, the income of mutual fund was reduced. The ld.CIT(A) pointed out that during assessment and penalty proceedings the assessee submitted that the mistake in classification of income has been committed by the assessee s accountant. However, the AO did not accept the said contention and levied the penalty u/s. 271(1)( c) of the Act. He observed that nowhere it was mentioned that the mistake of inclusion of some professional income with the income from mutual funds was detected by the AO and it was a fact on record that with regard to the said income no explanation etc. was sought for by the AO. Hence, the contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO. He further submitted that had it was not a case of the scrutiny, the income might have escaped. It was also submitted by him that the income from Mutual Funds was wrongly claimed by the assessee as exempt. Income which, in fact, was income from profession, but the assessee did not file any revised return even after knowing of the said mistake. It was also submitted that even if the agreed addition was made, the penalty u/s. 271(1)(c ) was also leviable. Reliance was placed on the judgment of the Hon ble SC in the case of Mak Data P.Ltd Vs. CIT,II in Civil Appeal No.9772 of 2013[arising out of Special Leave Petition (Civil) No.18389 of 2013. Copy of the said order is furnished. 10. In his rival submissions, the ld. Counsel for the assessee reiterated the submissions made before the authorities below and strongly supported the impugned order passed by the ld.CIT(A). He also submitted that in the assessment order, the AO nowhere stated that penalty was levied either for concealment of income or furnishing of inaccurate particulars of income. It was emphasized that the assessee itself detected the error committed by the assessee s accountant and offered for taxation the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the penalty imposed u/s. 271(1) ( c) of the Act. 10. We have considered the rival submissions and carefully gone through the material available on record. In the present case, it is an admitted fact that during the course of assessment proceedings the assessee itself came to know that its accountant has committed a mistake and considered the professional income of ₹ 34,66,017/- under the head income from mutual funds, which was claimed as exempt. Accordingly, the AO disallowed and added back the sum of ₹ 34,66,017/- to the income of the assessee. The explanation of the assessee was that the such mistake was attributable being an error of the accountant and it was not malafide. The said explanation was not rebutted. 11. In the present case, the AO in the penalty order u/s. 271(1) ( c) of the Act dated 30-06- 2010 himself observed that the error reveals a casual and irresponsible attitude towards tax accounting. Similarly, the assessee debited a sum of ₹ 2,76,893/- as partners salary on the basis of original partnership deed. But the AO on examination of the same found that there was no such provision in the current deed. The assessee is not contested th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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