TMI Blog2019 (4) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... e inadvertently mistake to be disallowed by the assessee as the same was not reported in TAR. The assessee’s contention is that the error was unintentional and bonafide mistake. The assessee has shown reasonable cause by offering the franking charges during the assessment by offering suomoto disallowance at the cost of repetition, we may ad that the assessee while filing reply to the show-cause notice that assessee realized its error and admitted that aforesaid franking charges ought to have been disallowed. This fact is duly recorded by Assessing Officer in para-2.1 of the penalty order. AO has not countered the bonafide explanation furnished by assessee. In Price Waterhouse P. Ltd. vs. CIT (2012 (9) TMI 775 - SUPREME COURT) held that the penalty under section 271(1)(c) could not be levied, where it involves a mistake by assessee on account of human error - we direct the Assessing Officer to delete the entire penalty.- Decided in favour of assessee. - ITA No. 7397/Mum/2018 - - - Dated:- 28-3-2019 - Shri Shamim Yahya, Accountant Member And Shri Pawan Singh, Judicial Member For the Appellant : Shri Rajan R. Vora (AR) For the Respondent : Shri Rajiv Gubgotra (DR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed the impugned order on 04.12.2017, however, the present appeal was filed on 24.12.2018, thus, there is delay of 280 days in filing of appeal. The assessee has filed an application for condonation of delay and affidavit of Sh. Brijmohan Gopaldass Soni, Director of assessee in support of application for seeking condonation in filing appeal before us. 4. The ld. AR of the assessee submits that the assessee while computing taxable income and filing return of income for relevant Assessment Year placed reliance on Tax Audit Report (TAR) and inadvertently missed to disallow the franking charges amounting to ₹ 22,50,000/-, it was a bonafide mistake on relying on the TAR. During the assessment, the assessee realize its error in not disallowing the franking charges and suomoto admitted that aforesaid charges ought to have been disallowed while arriving the taxable profit and accepted the disallowance. The penalty was levied on the assessee for ₹ 7,64,775/-, though, the assessee contested the appeal before the ld. CIT(A) on the validity of the notice as well as on merit. After dismissal of appeal, the assessee not filed further appeal before the Tribunal to avoid the lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay; (i) There should be a liberal, pragmatic, justice oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms sufficient cause should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, the Assessing Officer initiated and levied the penalty under section 271(1)(c) vide order dated 28.08.2015 for ₹ 7,64,775/-, without considering the bonafide explanation furnished by assessee. The assessee contested the appeal before the ld. CIT(A) on merit as well as on validity of notice under section 271(1)(c) as relevant limb of section 271(1)(c) which was not applicable in assessee s case, had not been stuck off in the penalty notice. The ld. CIT(A) confirmed the order without considering the bonafide explanation offered by the assessee. The ld. AR of the assessee in support of his submission relied upon the decision of Price Waterhouse P. Ltd. vs. CIT [2012] 348 ITR 306 (SC). 9. The ld. AR of the assessee further submits that notice under section 271(1)(c) is also invalid and bad-in-law as the relevant limbs under section 271(1)(c) which is inapplicable in case of assessee had not been stuck off. In support of his submission, the ld. AR of the assessee relied upon the decision of CIT vs. SSA s Emerald Meadows [2016] 242 Taxman 180 (SC), CIT vs. Samson Perinchery (ITA No. 1154 of 2014, CIT vs. Manjunatha Cotton Ginning Factory [2013] 359 ITR 565. The ld A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the franking charges incurred on account of increased in the authorized share capital, while stamp duty and filing of fees paid to ROC for the same purpose of ₹ 1.35 Crore was duly disallowed in the computation. The stamp duty and ROC fees were reflected in TAR and franking charges was not reflected in the TAR by the auditor, which was the bonafide mistake. The assessee acted on the TAR bonafidely. The contention of assessee that there was no willful concealment was also repudiated by ld. CIT(A). 12. We have noted that in the reply to the show-cause notice under section 271(1)(c), the assessee specifically contended that during the scrutiny assessment, the assessee realized its error in not disallowing the franking charge and admitted that the aforesaid charges ought to have been disallowed. The Assessing Officer has not disputed the contention of assessee in the penalty order. The contention of assessee throughout the proceeding are that the franking charges were inadvertently mistake to be disallowed by the assessee as the same was not reported in TAR. The assessee s contention is that the error was unintentional and bonafide mistake. In our view, the assessee has shown ..... 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