https://www.taxtmi.com/caselaws?id=470280 Penalty for under-reporting of income cannot be imposed merely because a leave-encashment expenditure claim is disallowed where its allowability on provision versus actual payment is debatable. The notes state that, despite the tax auditor's reporting and disallowance of the claim, penal liability requires proof of mens rea. As the Revenue did not establish mens rea attributable to the assessee in making the claim, the penalty order for under-reporting of income was quashed. en-us Wed, 10 Jun 2026 00:00:00 +0530 Tue, 21 Jul 2026 19:10:36 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=470280 Penalty for under-reporting of income cannot be imposed merely because a leave-encashment expenditure claim is disallowed where its allowability on provision versus actual payment is debatable. The notes state that, despite the tax auditor's reporting and disallowance of the claim, penal liability requires proof of mens rea. As the Revenue did not establish mens rea attributable to the assessee in making the claim, the penalty order for under-reporting of income was quashed. Case-Laws Income Tax Wed, 10 Jun 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=470280