TaxTMI 
TaxTMI 
2013 (12) TMI 651
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....ted 18.7.2011 of ld CIT(A) on following ground: "On the facts and in the circumstances of the case and in law, ld CIT(A) erred in deleting the penalty levied u/s.271(1)(c) amounting to Rs.40,90,232/- ignoring the fact that the assessee admittedly failed to prove the genuineness of the expenses claimed and its relation with the business which amounts to filing of inaccurate particulars of income.....
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.... However, AO initiated penalty proceedings and by his order dated 29.3.2010 has imposed penalty in respect of addition made by him @ 100% of tax sought to be evaded which works out to Rs.40,90,232. It is relevant to state that said penalty order was passed by the AO before the Tribunal decided the appeal vide which, as mentioned hereinabove, the Tribunal adopted G.P. rate of 8% for the assessment ....
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....4. I find that there is no case for levying penalty u/s 271(1)(c) in the instant case. Otherwise also it is a settled law that penalty u/s 271(1)(c) is not automatic simply because certain expenses are disallowed or additions are upheld. Nevertheless, the rejection of any claim that appears to be bon-a-fide cannot lead to a situation where penalty u/s 271(1)(c) can be imposed in view of many cases....
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....rmendra Textiles Processors 306 ITR 277(SC) was part in Dilip Shroff where it was held that mensrea was an essential requirement for penalty u/s 271(1)(c). Here in the instant case, I find that appellant had not filed any inaccurate particulars of his income within the meaning of section 271(1)(c) and it is a case where bon-a-fide explanations are rejected wholly or partly by different I.T. Author....