2022 (4) TMI 1072

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....f the IT Act was sustainable despite the explanation offered by the assessee was not found to be fault nor bonafide 2. Both the authorities below rejected the reasonable explanation offered by the assessee that the assessee had not concealed any income and had declared the entire income and the addition made was due to mistake committed by the chartered accountant who had been engaged by the assessee and consequently there was no concealment 3. Both the authorities committed an error in failing to appreciate that the mistake committed by the chartered accountant would be sufficient ground for not levy of penalty in view of the law declared by the Honorable Supreme Court in Price Waterhouse Coopers private limited vs CIT (2012) 348 ITR 3....

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....ing to know of the negligence the assessee changed the auditors and prosecution proceedings have been initiated at ICAI against the chartered accountant. 4. The AO did not accept the contention of the assessee on the basis that assessee should be aware of the consequences of inaccurate particulars and concealment. The AO also stated that admitting the mistake merely 23 days before when the limitation period was due to expire to complete assessment cannot be held to be a reasonable cost and hence proceeded to levy penalty u/s.271(1)(c). 5. Aggrieved the assessee preferred an appeal before the CIT(A). Before the CIT(A) the assessee contended that the penalty proceedings u/s. 271(1)(c) is initiated without recording of satisfaction and that ....

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....ntion to the decision of the coordinate bench of the Tribunal in assessee's own case (ITA No.18/Bang/2020) where the penalty u/s.271B is deleted by the Hon'ble Tribunal on the grounds that the bad professional relationship with the auditors resulting in delay in filing the auditor report is a 'reasonable cause'. The Ld AR therefore prayed that the underlying issue in the present case also the same and hence the ratio of the decision of the coordinate bench in assessee's own case should be applied for the issue of levy of penalty u/s.271(1)(c) also. 8. The Ld DR supported the decision of the lower authorities. 9. We have heard the rival submissions and perused the material on record. Under Section 271(1)(c), two faults or omissions exposes....