Indian Kanoon - Search engine for Indian Law

This is an appeal filed by the assessee. The relevant assessment year is 2012-13. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-5, Mumbai [in short 'CIT(A)'] and arises out of the penalty levied u/s 271(1)(c) the Income Tax Act 1961, (the 'Act').

2. The ground of appeal filed by the assessee reads as under :

The Ld. CIT(A) erred in confirming levy of penalty u/s 271(1)(c) of the Act of Rs.65,64,793/- for furnishing of inaccurate particulars without appreciating that it was inadvertent human error.

Therefore, the assessee's reliance on the above case laws are not correct. In nutshell, levy of penalty of Rs.65,64,625/- under section 271(1)(c) of the IT Act 1961 is fully justified and assessee's appeal is rejected on all grounds of appeal."

6. Before us, the Ld. counsel for the assessee submits that the deferred tax asset written off was reported in the financials, however, the same was inadvertently left to be added back to the net loss before tax while making the tax computation; this was purely due to oversight ; this error was only a computation error made in the return of income; such mistake occurred due to overlooking the contents of the profit & loss account. It is further explained that the contents of the financial statements do not conceal any particulars, the error incurred was a bonafide and an inadvertent human error, purely due to oversight and completely unintentional.

19. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income.