Itxa/5488/2010 Of Commissioner Of Income Tax -21 v. Yogesh R. Desai

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5488 OF 2010 The Commissioner of Income Tax-21, Mumbai ..Appellant. V/s. Yogesh R. Desai..Respondent. Mr. Vimal Gupta with Ms. Padma Divakar for the appellant.Mr. S.P. Mehta for the respondent. CORAM : J.P. DEVADHAR AND A.R. JOSHI, JJ. DATED : 13TH DECEMBER, 2011 P.C. :- 1.Whether the ITAT was justified in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is the question raised in this appeal. 2.In the assessment year relating to AY 2003-04, the assessee had claimed deduction under Section 80-O of the Income Tax Act, 1961 (‘the Act’ for short) based on the tax audit report. During the course of the assessment proceedings, the assessing officer was of the opinion that the assessee was not entitled to deduction under Section 80-O of the Act and accordingly disallowed the claim under Section 80-O and after initiating penalty proceedings imposed penalty under Section 271(1)(c) of the Income Tax Act, 1961. The penalty levied by the assessing officer was upheld by the CIT (A). 3.On further appeal, ITAT has deleted the penalty on the ground that in view of the tax audit report, the assessee was under the bonafide belief that the assessee was eligible for deduction under Section 80-O of the Act. The Tribunal has held that since all material facts were disclosed by the assessee and the belief formed by the assessee was bonafide, it cannot be said that the assessee has furnished inaccurate particulars or concealed any income. Accordingly, the ITAT deleted the penalty. In the above circumstances, the decision of the ITAT in holding that no case is made out for imposing penalty under Section 271(1)(c) of the Income Tax Act, 1961 cannot be faulted. In the result, the appeal is dismissed with no order as to costs. (A.R. JOSHI, J.) (J.P. DEVADHAR, J.)