2014 (2) TMI 457

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....of the assessee to evade tax or hide income in which event provisions of section 271(1)(c) ought not have been invoked by the AO. The Revenue is aggrieved by the said order and contended before us that the learned CIT(A) erred in relying upon the order of the Apex Court in the case of Reliance Petroproducts P. Ltd 322 ITR 158 (SC) ignoring the fact that the ratio as laid down by the Apex Court is not fully applicable in the instant case. 3. We have heard the learned D.R. as well as the learned counsel for the assessee in this regard and carefully perused the record. The facts necessary for disposal of the appeal are stated in brief. The assessee is engaged in the business of manufacture and export of forged hand tools. For the year under c....

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....ticulars of income which, in other words, would amount to concealment of income to the extent of claim of expenditure on account of loss on sale of assets. Therefore, the claim that the assessee admitted the error on its part is not acceptable. By applying the decision of the Apex Court in the case of Dharmendra Textiles Processors 306 ITR 277 the AO imposed penalty under section 271(1)(c) of the Act. 4. Aggrieved, assessee contended before the CIT(A) that it was an honest and bonafide mistake on the part of the assessee in debiting the impugned amount to the P & L Account and the P & L Account having reflected this figure, which was part of the record of AO, it cannot be stated that the assessee furnished inaccurate particulars. It was al....

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....llful default attracting the provisions of section 271(1)(c) of the Act. Reliance was placed upon the decision of the Hon'ble Supreme Court in the case of Reliance Petroproducts P. Ltd 322 ITR 158 (SC) as well as several other decisions in support of its contention that the AO having levied penalty on the ground that the assessee furnished inaccurate particulars, once it is proved that there was no malafide omission on the part of the assessee, penalty cannot be levied. 5. The learned CIT(A) analysed the facts and circumstances of the case while arriving at the conclusion that it was not a fit case for levy of penalty. The operative part of the order is extracted for immediate reference: - "5.1 However, appellant argued that during the co....

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.... already available before the AO. It appears, there was no malafide intention on the part of the appellant to furnish inaccurate particulars of income. Further, there is no willful act on the part of the appellant to evade taxes by hiding any income. 5.3 Respectfully following the ratio of recent decision of Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158, I am of the view that the circumstances and the facts of the case as discussed above, the penalty levied u/s. 271(1)(c) of the IT Act is not sustainable. Therefore, the penalty levied by the AO is not justified, hence, the same is deleted." 6. Aggrieved, Revenue is in appeal before us. At the time of hearing the learned counsel for the assessee ....