TILOK TIRATH VIDYAWATI CHUTTANI CHARITABLE TRUST,CHANDIGARH vs. ITO (E), CHANDIGARH

PER DIVA SINGH

The present appeal has been filed by the assessee assailing the correctness of the order dated 27.11.2017 of CIT(A)-2 Chandigarh pertaining to 2013-14 assessment year on the following ground : “1)That Learned Commissioner of Income Tax (Appeals)-2, Chandigarh has failed to appreciate the facts and circumstances of the case and has thereby erred in sustaining penalty u/s 271(l)(c) of Income Tax Act, 1961 on account of non-disclosure of interest on Income Tax Refund. The appellant is a Trust and the income is exempt. The default was unintentional as the refund was credited to the bank and the appellant was unaware of the interest component. In view of the above it is prayed that order of Learned Commissioner of Income Tax (Appeals)-2 may kindly be cancelled.” 2. Both the parties have been heard. Relevant facts of the case are that the assessee Trust registered u/s 12A(A) of the Income Tax Act,1961 returned ‘nil’ income. In the assessment proceedings, it was noticed that the assessee had received Rs. 71,963/- as interest u/s 244A on refund which had not been taken into Income & Expenditure Account. A perusal of para 4 of the assessment order shows that on behalf of the assessee, it was stated by the counsel that “Interest amount was not taken into account inadvertently” and further submitted that “amount was not utilized other than for the objects of the Trust”. The addition was made by the AO holding; “However, after discussion, counsel of the assessee agreed

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for addition of Rs. 71,963/- to the returned income for taxation purposes”. In view of this fact, penalty proceedings u/s 271(1)(c) were initiated. The assessee reiterated that it was an inadvertent mistake. The submissions made before the AO were reiterated before the CIT(A) and on failing to get relief, were repeated before the ITAT. The ld. AR relying upon the orders submitted that consistently the assessee has made a claim of inadvertent mistake. The omission was inadvertent. It was also his submission that the assessee is not a habitual defaulter. In the circumstances, it was his prayer that penalty may be quashed. 5. The ld. Sr.DR relies upon the impugned order. 6. We have heard the rival submissions and perused the material on record. Taking note of the fact that assessee is not habitual defaulter, and noting the consistent claim of inadvertent, unintentional mistake where the assessee pleads that he was unaware of the interest component credited to his bank account, we find no good reason to discard his explanation offered. Accepting the same to be bonafide and true, the penalty order is directed to be quashed and the impugned order, accordingly, is set aside. Said order was pronounced in the Open Court at the time of hearing itself. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 16.07.2018.

Sd/- Sd/- (Dr.B.R.R.KUMAR) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR

Asstt. Registrar ITAT,Chandigarh.