“bona fide mistake”
The decision most relied on for bona fide mistake is Price Waterhouse Coopers Pvt. Ltd. v. CIT (348 ITR 306), cited in 359 judgments on BharatTax.
Leading authorities on bona fide mistake
Penalty under section 271(1)(c) for furnishing inaccurate particulars cannot be imposed for a mere disallowance, bona fide mistake, or inadvertent error, especially when relevant facts are disclosed in the tax audit report. The levy of penalty requires proof of intent to conceal income or furnish false particulars.
When considering an application for condonation of delay, the court must examine whether the mistake causing the delay was bona fide or merely a device to cover an ulterior purpose, guiding the exercise of its discretion.
Sufficient cause for condoning delay means an adequate and non-blameworthy reason that prevented a party from acting within the prescribed time, requiring an explanation that would satisfy a cautious person. It is not an elastic concept covering long, negligent, or stale claims.
Penalty under section 271(1)(c) can be levied even if the assessee voluntarily discloses income after detection by the department or subsequent to a search, especially when the explanation provided is not bona fide or cannot be substantiated.
A litigant should not be made to suffer adverse consequences solely due to the bona fide mistake or negligence of their counsel, and they must be provided a fair and proper opportunity to present their case on its merits.
Where the difference between the returned and assessed income exceeds 20%, Explanation 1 to section 271(1)(c) applies, and the assessee must discharge the onus to rebut the inference of concealment.
An assessee is required to deduct tax at source on reimbursements, even if the assessee acted under a bona fide belief that such reimbursements were exempt.
Penalty under Section 271(1)(c) is not automatically warranted merely because the Assessing Officer reclassifies a business loss as a speculative loss, especially if the assessee did not conceal income or furnish inaccurate particulars. The AO's change in treatment alone does not infer concealment.
