The Commissioner Of Income Tax – 12 v. Elecmech Corporation

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.661 OF 2011 The Commissioner of Income Tax – 12 ..Appellant. VersusElecmech Corporation..Respondent. Ms.P.S. Cardozo for the appellant.Mr.Jas Sanghvi i/by PDS Legal for the respondent. CORAM : J.P. Devadhar &A.R. Joshi, JJ. P.C. : DATE : 15[th] December 2011 1.Whether the Income Tax Appellate Tribunal 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 present case, the assessee declared rental income and service charges received from the tenants by treating it to be income from business instead of income from house property. The penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 has been deleted on the ground that there was no failure on the part of the assessee to disclose fully and truly all material facts and merely because the assessee has bona fide believed that the income was liable to be assessed under the head business income cannot be a ground to levy penalty. The decision of the Tribunal is based upon the judgment of the Apex Court in the case of Commissioner of Income Tax V/s. Reliance Petroproducts Private Limited reported in (2010) 322 ITR 158 (SC). 3.In our opinion, no fault can be found with the order of the Income Tax Appellate Tribunal. The appeal is accordingly dismissed with no order as to costs. (A.R. Joshi, J.) (J.P. Devadhar, J.)