Assessee's appeal allowed, penalty canceled under Income-tax Act. Mistake deemed inadvertent, not willful evasion.

The Tribunal allowed the assessee's appeal, canceling the penalty imposed under Section 271(1)(c) of the Income-tax Act. The decision was based on the finding that the mistake in not adding back the loss on sale of assets was inadvertent and not indicative of willful suppression of facts or intent to evade tax, as supported by the details provided by the assessee and the precedent set by the Supreme Court in similar cases.

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Issues:
Penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961 for furnishing inaccurate particulars of income.

Detailed Analysis:

Issue 1: Penalty Imposed by Assessing Officer
The Assessing Officer imposed a penalty of Rs.1,08,853/- on the assessee for not adding back the loss on sale of assets in the computation of income, treating it as furnishing inaccurate particulars of income under Section 271(1)(c) of the Act. The assessee contended that it was an inadvertent mistake and not willful suppression of facts, citing the Tax Audit Report and the nature of the loss as capital expenditure.

Issue 2: Appeal before CIT(A)
The assessee challenged the penalty before the CIT(A), arguing that the penalty was not sustainable as there was no intention to evade tax, and the mistake was genuine without any willful suppression or misrepresentation of facts. The CIT(A) upheld the penalty, stating that the assessee furnished inaccurate particulars of income, and intent to evade tax was not required to be proven.

Issue 3: Tribunal's Decision
The assessee appealed to the Tribunal, reiterating that the mistake was inadvertent and citing the Supreme Court's decision in a similar case. The Departmental Representative argued that the mistake was detected by the Assessing Officer, indicating inaccurate particulars of income. The Tribunal examined the details provided by the assessee, including the profit and loss account and Audit Report, concluding that the mistake was bona fide. Relying on the Supreme Court's precedent, the Tribunal canceled the penalty, emphasizing that the assessee did not conceal income or furnish inaccurate particulars.

In summary, the Tribunal allowed the assessee's appeal, canceling the penalty imposed under Section 271(1)(c) of the Act. The decision was based on the finding that the mistake in not adding back the loss on sale of assets was inadvertent and not indicative of willful suppression of facts or intent to evade tax, as supported by the details provided by the assessee and the precedent set by the Supreme Court in similar cases.

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