2010 (3) TMI 416

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....earned coun-sel appearing on behalf of the assessee are agreed in stating before the court that basically the following question of law would be sufficient for the purposes of formulation : "Whether on the facts and the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) and Tribunal were justified in deleting the penalty of Rs. 10,08,400 contravening the provisions of Explanation 1 to section 271(1)© of the Income-tax Act, without appreciating the facts brought on record by the Assessing Officer in his order dated March 19, 2003 ?" 2. The assessee is a partner in a real estate firm by the name of Dharti Estate. According to the assessee, the aforesaid firm had advanced a loan to Dharti Builders and....

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....the Income-tax Act, 1961 and in view of this the assessee has committed a bona fide mistake, which cannot be penalised by levy of a penalty under section 271(1)©. There is merit in the submission which has been urged on behalf of the Revenue that the ground that the assessee was not aware of the provisions of section 2(22)(e) can hardly be regarded as sufficient in itself to order the deletion of the penalty in a case such as present, where the assessee is a partner in a partnership firm engaged in the business of real estate and was also a major shareholder of a private limited company. According to the assessee, the partnership firm had advanced a loan of Rs. 3.45 crores to the private limited company and the company had in turn advanced....