Merely because a legal claim has been made, and even though the said claim has been found to be inadmissible, penalty under section 271(1)(c) cannot be imposed
ACIT Vs Sumit P. Bhattacharya (ITAT Mumbai)- Assessee was an employee of M/s Procter and Gamble India Ltd., which is a group company of Procter and Gamble of USA. The company had given appreciation rights to the assessee. As regards the judgement of the Apex Court in the case of Union of India Vs. Dharmender Textiles, 306 ITR 307, we find that CIT(A) as well as ITAT have not cancelled penalty on the ground of mens rea, therefore, the judgement of the Apex Court in this case is not applicable to the facts of the case under consideration. Contrary to that, the case under consideration is covered by the judgment of the Apex Court in the case of Reliance Petroproducts P. Ltd. Cited supra. In the light of above discussion, we hereby cancel the penalty levied u/s 271(1)(c) of the Act.
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I”, MUMBAI
BEFORE SHRI D.K. AGARWAL, J.M AND SHRI A.L. GEHLOT, A.M.
ITA No. 2442/M/2009
Assessment Year: 1998- 99
| Asst. Commissioner of Income-tax, 16(1), Matru Mandir, Mumbai – 9. |
Vs. |
Shri Sumit P. Bhattacharya, 3E Ramalayan, 44C, Peddar Road, Mumbai – 26 (PAN – AAGPB6968G) |
|---|---|---|
| Appellant | Respondent |
Appellant by : Mr. Ajay Kumar Srivastava
Respondent by : Ms. Hiral Sejpal
Date of Judgement: 11th day of June, 2010.
O R D E R
PER A.L. GEHLOT, A.M.:
This appeal filed by the Revenue is directed against the order of CIT(A)-XVI, Mumbai, passed on 22.12.2008 for the assessment year 1998-99.
2. The ground raised by the revenue in this appeal is in respect of levy of penalty u/s 271(1)(c) of the Act. It is stated in the ground that the CIT(A) erred in appreciating that wilful attempt or concealment is not an essential ingredient for attracting the penalty which has been duly supported by the decision in the case of Union of India Vs. Dharmender Textile Processor reported in 306 ITR 277.
3. Briefly the facts of the case are that the assessee was an employee of M/s Procter and Gamble India Ltd., which is a group company of Procter and Gamble of USA. The company had given appreciation rights to the assessee, which are as under:-
