TMI Blog2012 (12) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... s engaged in the business of manufacturing frozen food items covered under bakery and confectionary items. The return was filed on 3.10.2008 declaring a loss of ₹ 3,16,19,027/-. The assessment u/s. 143(3) was completed in this case on 18.3.2010 and the assessment was framed at a loss of ₹ 2,98,25,260/-, after making the following additions as under:- i) Disallowance of ROC fee ₹ 2,41,000/- ii) Disallowance of loss on sale of assets ₹ 15,47,764/- iii) Disallowance of donation ₹ 5,000/- The Assessing Officer also initiated penalty proceedings in the said case and imposed a penalty u/s. 271(1)(c) amounting to ₹ 6,09,700/- for furnishing of inaccurate particulars of income thereby concealment of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me came to the knowledge of the assessee during the course of the assessment proceedings. On realizing the mistake assessee for the next assessment year had filed revised return of income voluntarily and corrected the mistake which proves the bonafide of the assessee. He further submitted that the business activity undertaken by the assessee was entitled for exemption u/s. 80IC for a period of 10 years from A.Y. 2008-09 onwards as the assessee has set up a manufacturing facility in a notified area namely Kashipur in Uttaranchal. Hence, even if the assessee had taxable income for the aforesaid assessment year, the same would have been exempt u/s. 80IC. Therefore, it is obvious that there should not be any reason on the part of the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords. We find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. We find that in this case penalty has been imposed for disallowance on account of ROC fee and disallowance of loss of sale of assets. Assessee s submission in this regard is that the same happened because of bonafide mistake on the part of the assessee. There was no intention of concealment of income. It has been claimed that the assessee did not stand to gain anything by not disclosing the aforesaid items. We find that the assessee was having deep loss for the year under consideration and the return filed was at a loss of ₹ 31619027/-. After the impugned disallowance the loss was reduced to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that even the assessee could make silly mistake. The fact that the tax audit report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable under section 40A(7) of the Act indicated that the assessee made a computation error in its return of income. The contents of the tax audit report suggested that there was no question of the assessee concealing its income or of the assessee furnishing any inaccurate particulars. Apart from the fact that the assessee did not notice the error, it was not even noticed even by the Assessing Officer who framed the assessment order. All that had happened was that through a bona fide and inadvertent error, the assessee while submitting its return, fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was granted in respect of the Bangalore property. Ld. counsel stressed upon the fact that the Khan Market property had been let out only from August, 1996 and under the circumstances there seems to have been a mechanical repetition of the claim in the return filed. So far as the question of furnishing inaccurate particulars with regard to the provision of taxation is concerned, ld. counsel submitted that it was inadvertent and even the record showed that such a claim had been made for the first time during the assessment year. 6. Zoom Communication Pvt. Ltd. (supra) is premised on the footing that even if inadvertent by particulars are not given, if the authority finds that the explanation given is not bona fide penalty u/s. 271 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the Ld. Departmental Representative are distinguishable on the facts of the case. They have also been distinguished by the Hon ble Jurisdictional High Court cited above. 11. We further place reliance from the Apex Court decision rendered by a larger Bench comprising of three of their Lordships in the case of Hindustan Steel vs. State of Orissa in 83 ITR 26 wherein it was held that An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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