Appeal granted, penalty deleted under Income-tax Act. Reliance on counsel's advice deemed bona fide mistake.

The Tribunal allowed the appeal, directing the deletion of the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961. The assessee's reliance on counsel's advice in good faith was considered a bona fide mistake, leading to the decision that the penalty was not warranted.

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Issues: The only issue raised in the present appeal is against the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961.

Summary:

Issue: Penalty u/s 271(1)(c) of the Act
The assessee declared income from the sale of land and claimed exemption u/s 54F for investing in a new residential house. The Assessing Officer found discrepancies in the claimed exemption amount. The penalty proceedings u/s 271(1)(c) were initiated, and the penalty was levied. The Commissioner of Income-tax (Appeals) upheld the penalty. The assessee appealed against the penalty, arguing that the mistake was due to following counsel's advice in good faith. The Tribunal held that the mistake was bona fide, as the assessee relied on counsel's guidance. Ignorance of law is not an excuse, but in this case, the mistake was not mala fide. Therefore, the Tribunal directed the Assessing Officer to delete the penalty u/s 271(1)(c) as the assessee was not liable for it. The appeal was allowed.

Conclusion:
The Tribunal allowed the appeal filed by the assessee, directing the deletion of the penalty imposed u/s 271(1)(c) of the Income-tax Act, 1961.

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