2022 (10) TMI 1052

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....come Tax Appellate Tribunal, Ahmedabad "C" Bench (For short "the Tribunal") in ITA No. 1778/Ahd/2017 for the assessment year 2007-2008 whereby the Tribunal allowed the appeal filed by the respondent assessee deleting the penalty under section 271(1)(c) of the Act amounting to Rs.1,46,48,271/- levied by the Assessing Officer and confirmed by the CIT(Appeals). 2. Following substantial questions of law are proposed: "(a) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is justified in deleting the penalty levied u/s 271(1) (c) of the Income Tax Act against the assessee for furnishing inaccurate particulars of income in respect of the addition made on account of disallowance of interest expe....

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....essment year was filed only on 30.09.2008? (d) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is justified in deleting the penalty levied u/s 271(1) (c) of the Income Tax Act, without appreciating the fact that the assessee had made claim of interest expenses twice in the Profit & Loss Account for the year under consideration but the assessee had neither initiated any remedial action to rectify this error nor submitted any satisfactory explanation for making such wrong claim of interest leading to conclusion that the assessee had made malafide intentions for making wrong claim of interest expenses in the Profit & Loss Account and thus this case is covered by Explanation 1 to Sect....

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....failed to do so, penalty on account of such legally untenable claim was confirmed. 7. The assessee therefore, preferred appeal before the Tribunal with regard to the order sustaining penalty by CIT(Appeals) for interest expenses of Rs. 11.90 crores which was accounted twice. 8. The Tribunal however, considering the fact that the assessee was a public sector undertaking and bona fide mistake of twice accounting the provision for interest expenses was rectified by showing the said interest expenses as prior period income in the subsequent year 2008-2009, allowed the appeal deleting the penalty under section 271(1)(c) of the Act. 9. The Tribunal has arrived at finding of fact that the assessee under bona fide mistake, made provision f....