Gopalkrishna Narla Rao Vs ITO (ITAT Mumbai)
Penalty u/s 271(1)(c) Deleted – Bona Fide Computational Errors & Voluntary Disclosure During Assessment
AO levied penalty of ₹6.17 lakh u/s 271(1)(c) alleging furnishing of inaccurate particulars, as assessee offered additional income during assessment. CIT(A) confirmed the penalty.
ITAT held:
• Additional income offered voluntarily during assessment
Assessee filed revised computation upon noticing errors
• Errors were bona fide & computational in nature
- Double claim of housing loan interest
- Incorrect head of income classification
• No variation between revised income & assessed income
AO ultimately accepted the revised computation
• No deliberate concealment or inaccurate particulars
Mere mistake ≠ concealment
• SC rulings applied (Reliance Petroproducts / Price Waterhouse)
Bona fide errors do not attract penalty
Accordingly, penalty u/s 271(1)(c) deleted in full
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal by the assessee against order dated 14.07.2025 passed by National Faceless Appeal Centre (NFAC), Delhi confirming penalty imposed of Rs.6,17,612/- under section (u/s.) 271(1)(c) of the Income Tax Act, 1961 (in short the ‘Act’) for the Assessment Year (AY) 2015-16.
2. At the outset, we observe, present appeal is delayed by 10 days. Seeking condonation of delay, the assessee has filed an application supported by an affidavit. It is the say of the assessee that due to heavy rains on 15th and 16th August, 2025 his office was flooded, resulting in damage to computer systems and records. It is submitted, being a practicing Chartered Accountant, the assessee also had the added responsibility of completing the audit and filing income tax returns of his clients before 31″ October, 2025, which subsequently got extended up to 10th November, 2025. He submitted, due to this reason filing of appeal got delayed by 10 days.
