Penalty cannot be levied merely on account of disallowance of certain expenses debited to P&L a/c:

AO levied penalty on disallowances made in respect of Income-tax, FBT and donations which came to be confirmed by Ld. CIT(A). On further appeal, Hon’ble ITAT observed that assessee had debited all the said expenses to P&L a/c under the head “Financial charges”. However, due to inadvertent mistake of the audit staff of CA who was entrusted with the work of compilation of accounts and preparation of return of income, the said expenses remained to be disallowed while computing the income. Disallowing such expenses skipped the attention of the concerned CA since the said expenses were grouped under the head “Financial charges”. All the necessary facts were furnished before AO and hence, there was neither any concealment of income nor any inaccurate particulars of income were furnished. Thus, the Hon’ble ITAT, while following the decisions in the cases of “Reliance Petro Products – 322 ITR 158 (SC)” and “Pricewater House Coopers Pvt. Ltd. – 348 ITR 306 (SC)”, deleted the penalty.

[Ganpatbhai M. Mistry Furnisher Pvt. Ltd. vs. ACIT – ITA No.1662/Ahd/2012]