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Section 271(1)(c) of the Income Tax Act

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Tag: Section 271(1)(c) of the Income Tax Act

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Punishment u/s 271(1) (c) not leviable because an expense was disallowed does not imply that income was not correctly reported

Punishment u/s 271(1) (c) not leviable because an expense was disallowed does not imply that income was not correctly reported

Fact and Issue of the case

This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 18-06-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2013-14 wherein the assessee has raised the following ground of appeal. ‘’Levy of Penalty u/s 271(1)© of Rs.1,01,469/- is bad in law.

Apropos solitary ground of the assessee, the facts as emerges from the order of the ld. CIT(A), NFAC, Delhi are as under:-

The appellant has failed in explaining the delay in filing the appeal and the fact that the said order was passed and available with the appellant as it was visible on online Portal since long shows that there was lack of due care and attention on the part of appellant to file appeal in time. In the instant case, the reasons put forward by the appellant to justify the delay is general, routine and nonchalant as the entire blame for delay has been put on CA who has not even accepted any such responsibility as no such affidavit is on record. I am of the considered opinion that the assessee has failed to prove his bona fides to establish with evidence that he was prevented by unavoidable circumstances from filing the appeal or there was ‘’sufficient cause” for not filing the appeal in time.

Even otherwise on the merits of it, I also do not see any infirmity in the order of AO as no compliance to the notices issued were made before the AO and that by claiming excess deduction under section 80P of the Act. Appellant had in fact concealed the particulars of its income. In view of the foregoing, in the facts and circumstances of this case, it is held that appellant did not have sufficient cause for the delay or nearly eleven months in filing of appeal. Hence, the delay in filing present appeal is not condoned u/s 249(3) within the meaning of Section 249(3) of the Income Tax Act. The appeal is not admitted for adjudication and is dismissed in limine.”

Observation of the court

As per the facts of the present case, the assessee claimed deduction under various sub-section of 80P of the Act. However, the AO after verification of the records restricted the allowance of deduction u/s 80P of the Act and he was of the view that the business activities carried out by the assessee are not falling under the category of eligible activities and thus as per his view the assessee had concealed particulars of income and consequently the AO levied penalty. The Bench noticed that the ld. CIT(A) dismissed the appeal of the assessee primarily on two counts.

(a) That the appeal filed late and reason put forward to justify the delay in appeal is general, routine and nonchalant as the entire blame for delay has been on C.A. and no affidavit was filed by him.

(b) Even on merits: since no compliance made at the level of assessing officer also; hence claim of excess deduction u/s 80P is concealment of facts/income. In this regard, the ld. AR of the assessee submitted that since notices were being sent on e-mail/ Id of C.A. whose services were terminated and bank people were not aware of ‘’E-Assessment Proceedings”. The ld. CIT(A), NFAC has further stated that no affidavit of said C.A was filed whereas it is not feasible for the bank to get an affidavit of C.A. whose services were terminated and who has not even informed bank subsequently to make compliances. The income tax e-site does not change the Id/ e-mail automatically. Thus getting an affidavit of C.A. (terminated) is not an easy task. The ld. CIT(A), NFAC was submitted detailed reasons in writing and it is once again requested to condone the delay and consider the facts in merit. The delay in filing appeal was beyond the control of the assessee.

On the other hand, the ld. DR supported the order of the ld. CIT(A)

After hearing both the parties and perusing the materials available on record, the Bench finds that the assessee could not file the reply to the notice issued u/s 271(1)© of the Act in time to the AO because the e-notices were served to earlier CA Shri Prince Tak. Subsequently, the said CA was removed from service and all the e-notices were kept on serving on his e-mail/id and the bank staff was not aware of proceedings and ex-parte order of levy of penalty on account of concealment of income. From the available records, it appears that the assessee was prevented by sufficient cause and thus the delay so made is condoned. Be that as it may, it is a settled proposition of law in the case of CIT vs Reliance Petroproducts (P) Ltd. (Civil Appeal No. 2463 of 2010 dated 27-03-2010-SC) that disallowance of expenses will not per se amount to furnishing inaccurate particulars of income, merely because the assessee had claimed expenditure which claim was not accepted or was not acceptable to revenue, that by itself would not attract penalty u/s 271(1)© of the Act. In the case of CIT vs Ajaib Singh & Co. (2002) 253 ITR 630 (P & H), it is held that merely because certain expenses claimed by the assessee are disallowed by an authority it cannot mean that the particulars furnished by the assessee are wrong. Disallowance of expenses per se cannot mean that the assessee has furnished incorrect particulars of income. Concealment involves penal action. It has to be proved as a conscious act. Although it is true that direct evidence may not be available in every case yet it must be proved as a necessary corollary from the fact and circumstances established on record. In view of the above deliberation, the appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 08/02/2023.

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

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Revision order u/s 263 was duly passed even if AO failed to inspect the currency deposited during demonetization

Revision order u/s 263 was duly passed even if AO failed to inspect the currency deposited during demonetization

Fact and Issue of the case

This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 18-06-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2013-14 wherein the assessee has raised the following ground of appeal. ‘’Levy of Penalty u/s 271(1)© of Rs.1,01,469/- is bad in law.”

Apropos solitary ground of the assessee, the facts as emerges from the order of the ld. CIT(A), NFAC, Delhi are as under:-

The appellant has failed in explaining the delay in filing the appeal and the fact that the said order was passed and available with the appellant as it was visible on online Portal since long shows that there was lack of due care and attention on the part of appellant to file appeal in time. In the instant case, the reasons put forward by the appellant to justify the delay is general, routine and nonchalant as the entire blame for delay has been put on CA who has not even accepted any such responsibility as no such affidavit is on record. I am of the considered opinion that the assessee has failed to prove his bona fides to establish with evidence that he was prevented by unavoidable circumstances from filing the appeal or there was ‘’sufficient cause” for not filing the appeal in time.

Even otherwise on the merits of it, I also do not see any infirmity in the order of AO as no compliance to the notices issued were made before the AO and that by claiming excess deduction under section 80P of the Act. Appellant had in fact concealed the particulars of its income. In view of the foregoing, in the facts and circumstances of this case, it is held that appellant did not have sufficient cause for the delay or nearly eleven months in filing of appeal. Hence, the delay in filing present appeal is not condoned u/s 249(3) within the meaning of Section 249(3) of the Income Tax Act. The appeal is not admitted for adjudication and is dismissed in limine.”

As per the facts of the present case, the assessee claimed deduction under various sub-section of 80P of the Act. However, the AO after verification of the records restricted the allowance of deduction u/s 80P of the Act and he was of the view that the business activities carried out by the assessee are not falling under the category of eligible activities and thus as per his view the assessee had concealed particulars of income and consequently the AO levied penalty. The Bench noticed that the ld. CIT(A) dismissed the appeal of the assessee primarily on two counts.

(a) That the appeal filed late and reason put forward to justify the delay in appeal is general, routine and nonchalant as the entire blame for delay has been on C.A. and no affidavit was filed by him.

(b) Even on merits: since no compliance made at the level of assessing officer also; hence claim of excess deduction u/s 80P is concealment of facts/income.

In this regard, the ld. AR of the assessee submitted that since notices were being sent on e-mail/ Id of C.A. whose services were terminated and bank people were not aware of ‘’E-Assessment Proceedings”. The ld. CIT(A), NFAC has further stated that no affidavit of said C.A was filed whereas it is not feasible for the bank to get an affidavit of C.A. whose services were terminated and who has not even informed bank subsequently to make compliances. The income tax e-site does not change the Id/ e-mail automatically. Thus getting an affidavit of C.A. (terminated) is not an easy task. The ld. CIT(A), NFAC was submitted detailed reasons in writing and it is once again requested to condone the delay and consider the facts in merit. The delay in filing appeal was beyond the control of the assessee.

Observation of the court

On the other hand, the ld. DR supported the order of the ld. CIT(A)

After hearing both the parties and perusing the materials available on record, the Bench finds that the assessee could not file the reply to the notice issued u/s 271(1)© of the Act in time to the AO because the e-notices were served to earlier CA Shri Prince Tak. Subsequently, the said CA was removed from service and all the e-notices were kept on serving on his e-mail/id and the bank staff was not aware of proceedings and ex-parte order of levy of penalty on account of concealment of income. From the available records, it appears that the assessee was prevented by sufficient cause and thus the delay so made is condoned. Be that as it may, it is a settled proposition of law in the case of CIT vs Reliance Petroproducts (P) Ltd. (Civil Appeal No. 2463 of 2010 dated 27-03-2010-SC) that disallowance of expenses will not per se amount to furnishing inaccurate particulars of income, merely because the assessee had claimed expenditure which claim was not accepted or was not acceptable to revenue, that by itself would not attract penalty u/s 271(1)© of the Act. In the case of CIT vs Ajaib Singh & Co. (2002) 253 ITR 630 (P & H), it is held that merely because certain expenses claimed by the assessee are disallowed by an authority it cannot mean that the particulars furnished by the assessee are wrong. Disallowance of expenses per se cannot mean that the assessee has furnished incorrect particulars of income. Concealment involves penal action. It has to be proved as a conscious act. Although it is true that direct evidence may not be available in every case yet it must be proved as a necessary corollary from the fact and circumstances established on record. In view of the above deliberation, the appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 08/02/2023.

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

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Penalty under Section 271(1)(c) unsustainable since there would be no adjustment for the transfer pricing issue

Penalty under Section 271(1)(c) unsustainable since there would be no adjustment for the transfer pricing issue

Fact and issue of the case

This appeal filed by the assessee has been directed against the order of the Ld. CIT(A)-28, New Delhi in Appeal No.93/18-19/1121 dated 01.03.2019 relating to the A.Y. 2011-12.

The relevant facts as culled out from the material  on record are as under :

The assessee is a company stated to be engaged in providing marketing and other services to Trip Advisor Ltd., The assessee electronically filed its return of income for A.Y 2011-12 on 29.11.2011 declaring total of income at Rs. 62,04,833/-. A.O. has noted that during the year under consideration, assessee had entered into international transactions with its Associate Enterprises (AE’s) and the A.O. referred the case to Transfer Pricing Officer (TPO) to determining the Arm’s Length Price (ALP) of international transactions. The TPO vide order dated 21.01.2015 recommended an adjustment of Rs. 26,10,163/- u/s. 92CA(3) of the Act. Consequent to the order of the TPO, A.O. in the order passed u/s. 143(3) r.w.s. 144C(3) of the I.T Act 1961 order dated 22.04.20 15 determined the total income of the assesses at Rs. 91,02,630/- inter alia by enhancing the income on account of transfer pricing adjustment as suggested by TPO.

Aggrieved by the order of the A.O. assessee carried the matter before the Ld. CIT(A) who vide order dated 30.12.2016 directed the TPO to re-compute the transfer pricing adjustment after making changes suggested therein. In accordance with the directions of Ld. CIT(A) the adjustment of Rs. 26,10,163/- on account of Transfer Pricing was revised to Rs. 49,45,059/-. On the aforesaid transfer pricing adjustment made, A.O. vide order dated 19.03.2018 passed u/s. 271(1)(c) imposed penalty of Rs. 16,42,625/- u/s. 271(1)(c) of the Act.

Aggrieved by the penalty order of the A.O. assessee carried the matter before the Ld. CIT(A) who vide order dated 01.03.2019 in appeal no. 93/18-19/1121 dismissed the appeal of the assessee.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal and has raised the following grounds:-

That on the facts and circumstances of the case and in law, the Assessing Officer (“AO”) erred in levying and CIT(A) erred in upholding the penalty of INR 16,42,625 under section 271(1)(c) of the Act for concealing income by furnishing inaccurate particulars.

That on the facts and circumstances of the case and in law, the CIT(A) erred in confirming the penalty levied under section 271 (1)(c) of the Act, without appreciating that satisfaction has not been recorded by the AO before initiating penalty proceedings.

That on the facts and circumstances of the case and in law, the penalty levied by the AO in respect of the adjustment enhanced by the CIT(A) is bad in law as no satisfaction, which is a sine qua non for initiating penalty, was recorded by the CIT(A). 3.1 That on the facts and circumstances of the case and in law, the AO exceeded his jurisdiction in levying penalty on the quantum of adjustment enhanced by the CIT(A) in respect of which the CIT(A) only had the jurisdiction to initiate and levy penalty.

That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO to invoke Explanation 7 to section 271 (1)(c) of the Act, alleging that the Appellant had not acted in good faith and with due diligence in computing the arm’s length price (“ALP”) of the international transaction pertaining to provision of marketing support services (“MSS “).

That on the facts and in the circumstances of the case, the CIT(A) erred in upholding the action of the AO levying penalty without appreciating that there was only bonafide difference in computing the ALP pertaining to provision of MSS, which was computed in accordance with the provisions of section 92C of the Act.

Observation of the court

Before us at the outset, Ld.AR submitted that though the assessee has raised various grounds but without arguing on the grounds raised therein he submitted that the addition that has been proposed by the Ld. CIT(A) has been set aside by the Tribunal and therefore the basis of levy of penalty does not survive and therefore the penalty levied by A.O. and upheld by Ld. CIT(A) be deleted. To substantiate his aforesaid contentions, he submitted that against the quantum addition that was proposed by Ld. CIT(A), assessee had carried the matter before the Tribunal, wherein assessee had challenged the inclusion of certain comparables which had resulted into the upward adjustment. He submitted that the Tribunal vide order passed in ITA No. 1422/Del/2017 order dated 01.08.20 19 had directed the inclusion of Goldmine Advertising Ltd, as a comparable company and directed Media Research Users Council (MRUC) to be excluded from the list of comparables. He submitted that if the directions given by Hon’ble ITAT are considered, then there would remain no adjustment on account of transfer pricing issue and in such a situation since the basis of levy of penalty would not survive, therefore penalty would not be leviable. He submitted that the assessee has vide letter dated 05.09.2022 and 07.12.2022 addressed to A.O. had filed the detailed calculation after taking into account the directions of ITAT and submitted that once the directions of Hon’ble Tribunal are carried out, no adjustment would be required. He pointed to the copy of the letter addressed to A.O. dated 05.09.2022 and 07.12.2022 which are placed at page 84 to 90 of the paper book. He pointed to the working given in the table. He further stated that the A.O. has not yet given the appeal effect to the ITAT order. He therefore submitted that once the appeal effect is given by the A.O. there would be no addition and the basis of penalty would not survive. He therefore prayed that the penalty be deleted.

Ld. DR on the other hand did not controvert the factual submissions made by Ld.AR but however supported the order of A.O.

We have heard the rival submissions and perused the materials available on record. The issue in the present ground is with respect to levy of penalty u/s. 271(1) (c) on that transfer pricing adjustment that were initially suggested by TPO but were subsequently enhanced by Ld. CIT(A). We find that the enhancement to transfer pricing adjustments directed by Ld. CIT(A), was challenged by the assessee before the Tribunal. The co-ordinate Bench of Tribunal vide order dated 01.08.2019 had directed the inclusion/exclusion of certain comparables. We further find that the assessee has also made correspondence with the A.O. wherein assessee has inter alia requested him to carry out the appeal effect consequent to the directions of Tribunal, which is yet to be carried out by the A.O. It is the contention of the assessee that if the directions of the Tribunal for inclusion/exclusion of comparables are carried out by the A.O. then there would remain no basis for making any Transfer Pricing adjustments. The aforesaid factual contention of the Ld.AR has not been controverted by the Revenue. In such a situation, considering the totality of the aforesaid facts we find force in the contentions of the Ld.AR that no adjustment on transfer pricing issue would subsist and therefore there is no question of penalty u/s. 271(1)(c) on such addition. We therefore direct the deletion of penalty u/s. 271(1)(c) in the present case. Thus the grounds of assessee are allowed.

Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal.

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No Penalty can be imposed in Income Tax for making a claim which may be erroneous

No Penalty can be imposed in Income Tax for making a claim which may be erroneous

Introduction

Many a times while filing returns and claiming deduction there are chances that we make errors or claim wrong deduction. Can these be termed as concealment of income and thereby imposition of penalty be justifiable. We will understand the ground for imposition of penalty under section 271 (1)(c), with a very interesting case of Ventura Textiles Ltd. Vs CIT (Bombay High Court).

Provisions of Law

Section 30 to 37 of the Income Tax Act, states the amounts expressively allowed as deduction while computing income under the head “Profits and Gains of Business or Profession”.

According to Section 36(1)(vii), the amount of any Bad Debt or part thereof, which has been written off as irrecoverable in the accounts of the assessee for the previous year, shall be allowed as a deduction.

Section 37(1) states the provisions of general deductions. According to Section 37(1), any expenditure (not being expenditure of the nature described in sections 30 to 36) and not being in the nature of capital expenditure or personal expenditure of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession, shall be allowed as deduction in computing the income chargeable under the Head “Profits and Gains of Business or Profession”

According to Section 271(1)(c), If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, then he may direct that such person shall pay by way of penalty in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed 3 times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits.

Whether the levy of penalty u/s.271(1)(c) is justified in law for making a claim which may be erroneous or wrong?

Let us refer to the case of Ventura Textiles Ltd. Vs CIT (Bombay High Court) where this  issue was taken into consideration.

Facts of the Case

  1.  Respondent is an assessee under the Act having the status of resident company.
  2. Assessee filed its return of income declaring a loss. The case was selected for scrutiny assessment.

Assessment Proceedings

  1.  During the assessment proceedings it was found that assessee had debited an expense under the head ‘selling and distribution expenses’ and claimed it as bad debt in the books of account thus claiming it as a deduction under Section 36(1)(vii).
  2. Subsequently it was found that the aforesaid amount was paid to M/s. JCT Ltd. as compensation for the supply of inferior quality of goods.
  3. Thus Assessing Officer (AO) held that the amount claimed as bad debt was not actually a debt and therefore it was not allowable as a deduction under Section 36(1)(vii).
  4. Also the said claim was also not admissible under Section 37(1) of the Act, with the observation that payment made to M/s. JCT Limited was not wholly and exclusively for business purposes but for extraneous considerations.
  5. In view thereof, assessee’s claim was rejected and the said amount was added back to the total income of the assessee.
  6. Taking the view that assessee had furnished inaccurate particulars of income, AO ordered that penalty proceedings under Section 271(1)(c) of the Act be initiated separately.

Appeal to Commissioner of Income Tax (Appeals) [CIT(A)]

  1. Assessee had challenged the disallowance of bad debt along with other disallowances in the assessment order by filing appeal before the Commissioner of Income Tax (Appeals) who by confirmed the disallowance of bad debt while deleting other disallowances.
  2. In the penalty proceedings, AO took the view that assessee’s claim was not actually bad debt but represented payment made to M/s. JCT Limited which was also not incurred wholly and exclusively for the purposes of business.
  3. Had the case not been selected for scrutiny, income to the said extent would have escaped assessment.
  4. Thus, AO held that by making an improper and unsubstantiated claim of bad debt, the assessee had willfully reduced its incidence of taxation, thereby concealing its income as well as furnishing inaccurate particulars of income.
  5. Therefore, invoking Section 271(1)(c) of the Act, the AO imposed the minimum penalty being 100% of the tax. Aggrieved by such imposition of penalty, assessee preferred appeal before CIT(A).
  6. CIT (A) held that assessee had made a wrong claim by submitting inaccurate particulars of income by claiming bad debt which was not actually a debt and also not an expenditure allowable under Section 37(1) of the Act.
  7. Thus it was held that the assessee had willfully submitted inaccurate particulars of income which had resulted into concealment. Therefore, penalty levied by the AO on the amount of ‘bad debts’ was upheld.

Appeal to Income Tax Appellate Tribunal (ITAT)

  1. Aggrieved with the order of CIT(A), assessee carried the matter in further appeal before the Tribunal.
  2. Tribunal upheld the order of CIT (A) and rejected the appeal of the assessee.
  3. According to the Tribunal, it was rightly held by the CIT (A) that the assessee had made a wrong claim by submitting inaccurate particulars of income by claiming a bad debt which was not actually a debt and also not an expenditure allowable under Section 37(1).
  4. Therefore, the finding recorded by the CIT (A) that the assessee had willfully submitted inaccurate particulars of income which had resulted into concealment was affirmed.

Proceedings of High Court

  1. Imposition of penalty is under Section 271(1)(c) of the Act. The two key expressions in Section 271(1)(c) of the Act are “concealment of particulars of his income” and “furnishing inaccurate particulars of such income”. These two expressions comprise of the two limbs for imposition of penalty under Section 271(1)(c) of the Act.
  2. In the assessment order, AO had ordered that since the assessee had furnished inaccurate particulars of income, penalty proceedings under Section 271(1)(c) were also initiated separately. Therefore, it was apparent that penalty proceedings were initiated for furnishing inaccurate particulars of income.
  3. In the instant case, penalty proceedings under Section 271(1)(c) of the Act were initiated on the ground that assessee had furnished inaccurate particulars of income.
  4. Assessee disclosed that it had debited an amount under the head ‘selling and distribution expenses’ and claimed it as bad debt in the books of account.
  5. As per the explanation given by the assessee it was exporting fabrics through M/s. JCT Ltd, a recognized export house for which assessee had an ongoing account with M/s. JCT Ltd.
  6. Assessee clarified during the assessment proceedings that the said amount which was written off was actually not bad debt but in the nature of rebate and discounts given to M/s. JCT Ltd. on account of quality claims made by it from time to time.
  7. This explanation of the assessee was not accepted by the AO by holding that subsequent payment made to M/s. JCT Ltd. would not be covered by Section 36(1)(vii) of the Act since the amount claimed as bad debt was actually not a debt.
  8. Thereafter AO examined as to whether such payment would be covered under Section 37(1) of the Act as per which an expenditure would be allowable as a deduction if it pertains to that particular year and incurred wholly and exclusively for the purpose of business.
  9. AO held that the assessee’s claim was not admissible even under Section 37(1) of the Act as the circumstances indicated that the payments were not made wholly and exclusively for business purpose.
  10. While disallowing the claim of the assessee, AO took the view that since the assessee had furnished inaccurate particulars of income, penalty proceedings under Section 271(1)(c) of the Act was also initiated separately.
  11. In the statutory show cause notice, AO did not indicate as to whether penalty was sought to be imposed for concealment of income or for furnishing inaccurate particulars of income though in the assessment order it was mentioned that penalty proceedings were initiated for furnishing inaccurate particulars of income.
  12. However, in the order of penalty, AO held that assessee had concealed its income as well as furnished inaccurate particulars of income.
  13. Concealment of particulars of income was not the charge against the appellant, the charge being furnishing inaccurate particulars of income.
  14. Penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) while penalty proceedings were initiated for breach of the other limb of Section 271(1)(c).
  15. In appeal, CIT (A) took a curious view that submission of inaccurate particulars of income resulted into concealment, thus upholding the order of penalty. This blurred view of the CIT (A) was affirmed by ITAT.
  16. While the charge against the assessee was of furnishing inaccurate particulars of income whereas the penalty was imposed additionally for concealment of income, the order of penalty as upheld by the lower appellate authorities could be justifiably interfered with.
  17. However, the HC wanted to examine whether there was furnishing of inaccurate particulars of income by the assessee in the first place because that was the core charge against the assessee.
  18. It is quite evident that assessee had declared the full facts. The complete facts were before the AO while passing the assessment order. It is another matter that the claim based on such facts was found to be inadmissible. This is not the same thing as furnishing inaccurate particulars of income as contemplated under Section 271(1) (c) of the Act.

Thus, on a careful examination of the entire matter, the appeal was allowed and the order of penalty as affirmed by the two lower appellate authorities was set aside as the claim made for imposing the penalty was erroneous.

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