Tribunal rules in favor of assessee, cancels penalty citing inadvertent mistake

The Tribunal ruled in favor of the assessee, emphasizing the inadvertent nature of the mistake and the absence of deliberate intent to conceal income. Citing the Price Water Coopers Pvt Ltd case, the Tribunal concluded that no penalty was warranted. The AO was directed to delete the entire penalty, and the assessee's appeal was allowed.

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Issues:
1. Penalty under section 271(l)(c) of the Income Tax Act, 1961.

Analysis:
The appeal was against the order of CIT(A)-47, Mumbai for AY 2012-13. The assessee contended that no penalty should be levied under section 271(l)(c) as full and correct particulars of income were furnished, and there was no intention to conceal income or provide inaccurate particulars. The AO disallowed the claimed loss on the sale of a fixed asset (motor car) and prior period expenses, initiating penalty proceedings. The AO imposed a penalty of Rs. 78,100. The CIT(A) upheld the AO's action, leading to the appeal.

During the proceedings, the assessee explained that the debited amount on the sale of the fixed asset was due to an inadvertent mistake, and the assessee voluntarily offered it for assessment. The assessee also agreed to disallow the prior period expenses. The assessee contended that there was no deliberate action to conceal income. The assessee cited the Price Water Coopers Pvt Ltd case to support their argument.

The revenue supported the lower authorities' orders, stating that had the return not been scrutinized, the income would have escaped assessment. The Tribunal noted that the assessee voluntarily accepted the additions during assessment and explained in response to the show-cause notice that there was no mala fide intention. Citing the Price Water Coopers Pvt Ltd case, the Tribunal held that the absence of due care did not imply an attempt to conceal income or furnish inaccurate particulars.

Based on the facts and the Price Water Coopers Pvt Ltd case, the Tribunal concluded that no penalty was warranted in this case. The AO was directed to delete the entire penalty, and the appeal of the assessee was allowed.

In conclusion, the Tribunal ruled in favor of the assessee, emphasizing the inadvertent nature of the mistake and the absence of deliberate intent to conceal income. The decision was based on the Price Water Coopers Pvt Ltd case, where a similar inadvertent error did not lead to penalty imposition.

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