Appeal granted, penalty under Income Tax Act deleted for furnishing inaccurate income particulars.

The Tribunal allowed the appeal, deleting the penalty imposed under section 271(1)(c) of the Income Tax Act. The penalty was levied for furnishing inaccurate particulars of income, amounting to Rs. 11,50,459. The Tribunal considered the affidavit from a Chartered Accountant, stating the mistake was inadvertent, not deliberate. It found the reliance on professional advice reasonable, noting the accountant's tax consultancy expertise. As all details were disclosed accurately, the Tribunal concluded the assessee acted in good faith, overturning the penalty due to reliance on expert advice.

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Issues:
Appeal against penalty under section 271(1)(c) of the Income Tax Act for furnishing inaccurate particulars of income.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) confirming a penalty of Rs. 3,91,041 levied under section 271(1)(c) of the Act. The penalty was imposed on the assessee for furnishing inaccurate particulars of income amounting to Rs. 11,50,459. The issue revolved around the set off of brought forward business loss against income from other sources, which was deemed incorrect by the assessing authorities. The case was remanded back to the Tribunal for reconsideration after the assessee submitted an affidavit from a Chartered Accountant, stating that the mistake was inadvertent and not deliberate.

The Authorized Representative of the assessee argued that the set off was based on the advice of a qualified professional, and all relevant details were disclosed in the income tax return. The Departmental Representative contended that a qualified professional should not have made such an error, justifying the penalty under section 271(1)(c) of the Act. The Tribunal found the affidavit submitted by the Chartered Accountant to be genuine, confirming that the mistake was unintentional due to work pressure and not a deliberate act.

It was established that the assessee relied on the advice of a qualified professional in claiming the set off of the brought forward business loss. The Tribunal noted that the Chartered Accountant was actively engaged in tax consultancy, and the assessee's reliance on his advice could not be considered as gross negligence. The Tribunal concluded that the assessee acted on a bona fide belief in the advice given by the tax expert, even though it was erroneous. Since all details were accurately disclosed to the Assessing Officer, the penalty under section 271(1)(c) for furnishing inaccurate particulars of income was deleted, and the appeal of the assessee was allowed.

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