PRICEWATERHOUSECOOPERS PVT.LTD. vs C.I.T-KOLKATA-I

The Supreme Court held that the imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961 was not justified as the assessee's claim for deduction of gratuity was made inadvertently and was disclosed in the tax audit report. The Court emphasized that the assessee had complied with statutory requirements under Sections 139(6) and 44AB, and the reopening of assessment under Section 148 was based on a misunderstanding of the claim. Consequently, the penalty was set aside, affirming the principle that inadvertent errors should not attract penal consequences.