TaxTMI 
TaxTMI 
2013 (6) TMI 464
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (A) is correct in holding that the Assessing Officer has not found any mistake or concealment of income either in the return of income or in the books of account of the assessee whereas the pointed additions have been made by the Assessing Officer after of income was discussing as to how the income disclosed by the assessee in its return of income was not correct. 2. Whether the Ld. Commissioner of Income Tax (A) is correct in not appreciating the mistake of section 271(1B) of the I.T. Act, 1961 in holding that the initiation of penalty u/s. 271(1)(c) was only in respect of disallowance of expenditure relatable to the exempt income. 3. Whether the Ld. Commissioner of Income Tax (A) is correct in holding that the additions to the retu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce under Rule 2(ii) Rs 742315/- Disallowance under Rule 2(iii) being One half per cent of average value of Investment which does not formed part Of total income as appearing in the Balance sheet of the assessee on the First and last day of the previous year Rs 79375/- Rs 821690/-" 4. On this addition of Rs. 821690/-, Assessing Officer held that proceedings u/s. 271(1)(c) have been initiated separately for furnishing of inaccurate particulars of income in this regard. Apart from the above addition of Rs. 821690/- there were some other disallowances also which were not subjected to penalty proceedings by the Assessing Officer u/s. 271(1)(c). The total of the disallowance in this regard (including disallowance under Rule 8D) came to Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of income to attract the penalty u/s. 271(1)(c). 6. Considering the above, Ld. Commissioner of Income Tax (A) deleted the penalty. Ld. Commissioner of Income Tax (A) concluded as under:- "I have considered the order of the Assessing Officer and the submission of the assessee and I find considerable merit in the appeal / submission of the assessee that the Assessing Officer has not found any mistake or concealment of income either in the return of income or in the books of accounts of the assessee. It is also apparent from the order of the Assessing Officer that the Assessing Officer has initiated penalty only in respect of the income disallowed u/s. 14A whereas the penalty has been levied on the entire addition which includes general ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enalty was imposed on the total disallowance amounting to Rs. 10,38,677/-. Thus, the penalty levied was arrived at Rs. 3,53,047/-. However, if the penalty is levied correctly on the actual disallowance by the Assessing Officer, the penalty will fall under a sum of Rs. 3 lacs being the limit fixed by the CBDT for filing the Appeal before the Tribunal. In this view of the matter, the total tax effect of the deletion made by the Ld. Commissioner of Income Tax (A), will fall under the sum of Rs. 3 lacs. In that situation, the Appeal by the Revenue before the Tribunal cannot be made, as per necessary CBDT Circular in this regard. 9. Even on merits, we find that Ld. Commissioner of Income Tax (A) has passed a reasonable order. The penalty in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute." 11. We further place reliance upon the Hon'ble Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010. In this case vide order dated 17.3.2010 it has been held that the law laid down in the Dilip Sheroff case 291 ITR 519 (SC) a....