ASIT KUMAR DUTTA,DURGAPUR vs. ITO, DURGAPUR

The only issue raised by the assessee in various grounds of appeal is against the imposition of penalty of Rs. 1,17,641/- being 100% tax sought to be evaded.

Facts in brief are that the assessee filed return of income on 8.7.2016 disclosing total income of Rs. 10,37,040/-. Thereafter revised the return of income was filed on 23.03.2018 declaring total income of Rs. 4,96,170/- after claiming deductions under Chapter VI-A. The case of the assessee was selected for scrutiny and during the course of assessment proceedings, the AO found that the assessee has claimed deduction u/s 80DDB of the Act and u/s 80E of the Act by mistake and added back the same to the income of the assessee in the assessment framed u/s 143(3) of the Act vide dated 14.12.2018. The AO initiated penalty proceedings by issuing notice u/s 274 read with Section 271(1)(c ) of the Act for furnishing inaccurate particulars of income on 14.12.2018. None appeared in response to the said notice and thus penalty was imposed at Rs. 1,17,641/- in the penalty order passed u/s 27()(c ) of the Act4.

In the appellate proceedings, the Ld. CIT(A) has simply dismissed the appeal of assessee.

The Ld. A.R submitted before the bench that the assessee is a very old person and his return of income was revised claiming deduction by mistake and there was no malafide on the part of the assessee which has been accepted by the AO in the assessment proceedings. The Ld. A.R submitted that all the facts qua the said claim were duly shown/disclosed in the return of income. The Ld. A.R submitted that the said claim was made by mistake by third person for which the assessee cannot be penalized. The Ld. A.R also submitted that the assessee was a salaried employee with SAIL, Durgapur Steel Plant. The ld AR contended that the assessee has not concealed any thing in the return of income and whatever taxes were directed by the AO to be paid in the assessment proceedings were paid. The ld AR submitted that no penalty is leviable where the assesse has disclosed all facts in the return of income or claimed a deduction which according to the revenue is incorrect or wrong. In defense of this arguments the Ld. A.R relied on the decision of Hon’ble Supreme court in the case of CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158wherein it has been held that the assessee has made the claim which may not be acceptable to the revenue, cannot be the ground for making penalty u/s 271(1)(c ) of the Act.

After hearing the rival contentions and perusing the material on record, we find that the assessee has disclosed all the facts qua the said claim in the return of income which has been claimed by mistake as has been stated by the assesse and also accepted by the AO to have happened by mistake. The assessee is a salaried employee who was working with SAIL, Durgapur Steel Plant and income has been subjected to TDS at source. During the year, the assessee has claimed this deduction by mistake however in the scrutiny proceedings the assessee admitted the deduction to be claimed by mistake and paid due tax thereon. Considering these facts and circumstances of the case we are of the view that the assessee cannot be penalized for the mistake qua which the full disclosure has been made in the return of income accordingly we set aside the order of the Ld. CIT(A) and direct the AO to delete the addition.

In the result, the appeal of the assessee is allowed.