Appeal Granted: Penalty Deleted for Providing Reasonable Explanation

The Tribunal allowed the appeal, directing deletion of the penalty under section 271(1)(c) based on the reasonable explanation provided by the assessee and the absence of deliberate evasion or concealment.

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Issues Involved:
Appeal against penalty under section 271(1)(c) of the Income Tax Act for AY 2012-13.

Detailed Analysis:

Issue 1: Confirmation of penalty under section 271(1)(c) for furnishing inaccurate particulars.
- The assessee disputed the penalty of Rs. 2,75,260 levied under section 271(1)(c).
- The Assessing Officer (AO) added Rs. 8,90,808 for irreconcilable sundry creditors, alleging inaccurate particulars.
- The assessee's explanation regarding a discount from a party was not accepted by the AO.
- The Commissioner of Income Tax (Appeals) upheld the penalty, stating the assessee furnished inaccurate particulars.
- The Tribunal found the explanation reasonable and directed deletion of the penalty.

Issue 2: Failure to strike out inappropriate portions in the show-cause notice.
- The assessee argued that the penalty was levied without specific charges being mentioned in the notice.
- The assessing officer did not strike out inappropriate portions in the notice, leading to confusion.
- The Tribunal referred to relevant case laws but ultimately focused on the merit of the case.

Issue 3: Merits of the case and justification for penalty imposition.
- The AO imposed the penalty for furnishing inaccurate particulars and concealing income.
- The assessee contended that the addition was due to an unintentional mistake by the accountant.
- The Tribunal accepted the assessee's explanation, noting no intentional evasion and the absence of tax liability due to losses.
- Various case laws were cited to support the contention that no concealment or inaccurate particulars were intended.

Conclusion:
The Tribunal allowed the appeal, directing the deletion of the penalty under section 271(1)(c) based on the reasonable explanation provided by the assessee and the absence of deliberate evasion or concealment. The decision was announced on 26th July 2021.

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