Bona fide register error corrected before notice can defeat penalty where no revenue prejudice remains.

A penalty was held unwarranted where an erroneous debit in the statutory register was a bona fide mistake corrected before the show-cause notice was issued. With no debit balance remaining and no indication of revenue prejudice, the lapse was treated as inadvertent rather than contumacious, and the foundation for penal action was absent. Consequential relief was granted to the assessee.

---

---

Issues: Whether penalty was sustainable where the appellant had made an erroneous debit in the statutory register but rectified the mistake before issuance of the show-cause notice.

Analysis: The debit shortfall was a bona fide error noticed and corrected before the show-cause notice. There was no indication of any revenue prejudice or debit balance remaining in the register. In such circumstances, the mistake was treated as inadvertent rather than contumacious, and the basis for penalty was found to be absent.

Conclusion: Penalty was not warranted, and the appeal was allowed with consequential relief to the assessee.

---