TMI Blog2016 (10) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer at the assessment stage. The assessee on realizing the mistake that sundry debtors written off have not been added in the computation of total income, submitted before Assessing Officer to make the addition of the same amount in the computation of income of the assessee for the year under consideration. The assessee has, thus, offered explanation to the same issue. The above facts proved that explanation of the assessee was bonafide and all the facts relating to the same and material to the computation of total income have been disclosed by the assessee. It was not intentional mistake because assessee's company is of higher income group and generally selected for scrutiny assessment. Therefore, there was no reason to believe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that due to inadvertent, the same was omitted to be added back in the computation of assessee's income for this year. The Assessing Officer, therefore, noted that assessee has added back the above amount to the eligible profits while claiming deduction but has not added back this amount in the total taxable income. Therefore, it is not an error and attempt made by assessee to evade tax. The Assessing Officer initiated the penalty proceedings on the same reasoning. The assessee submitted before Assessing Officer that impugned mistake was inadvertent and not intentional as the same amount was clearly in the nature of disallowable expenses to be added. 3(i) The Assessing Officer, however did not accept the contention and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false, there is no question of levying penalty under section 271(1)(c) of the Income Tax Act. A mere making of claim which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding income of assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars The assessee also relied upon other decisions in support of the contention that it was a mistake which is corrected by the assessee, therefore, no penalty is leviable. 4. The ld. CIT(Appeals) considering explanation of the assessee, cancelled the penalty. His findings in paras 4 and 5 of the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding the fact that M/s Price Waterhouse Coopers Pvt. Limited was a reputed firm and has great expertise available with it, it was possible that even such an assessee could make a silly mistake. The assessee should have been careful but the absence of due care in a case such as the present did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income, the imposition of penalty was therefore, held not to be justified in view of the above details and circumstances of the case. The penalty imposed is, therefore, directed to be deleted. 5. In the result appeal is allowed. 5. The ld. DR relied upon order of the Assessing Officer and submitted that ld. CIT(Appeals) relied upon d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer to make the addition of the same amount in the computation of income of the assessee for the year under consideration. The assessee has, thus, offered explanation to the same issue. The above facts proved that explanation of the assessee was bonafide and all the facts relating to the same and material to the computation of total income have been disclosed by the assessee. The ld. CIT(Appeals), therefore, rightly noted that the circumstances clearly suggest that it was not intentional mistake because assessee's company is of higher income group and generally selected for scrutiny assessment. Therefore, there was no reason to believe that assessee would evade the taxes. This is a mistake in not adding back the sundry debtors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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