Penalty under s 271(1)(c)

 No penalty can be levied under s 271(1)(c) when there was only the CBDT Circular on the taxation of ESOP shares and where the assessee offered certain income in a particular year and paid taxes bona fidely and the AO taxed the same in another year, as held by DelTrib in ACIT v Vijay Kumar Jindal — In favour of: The assessee; ITA No 4237/Del/2009: (AY 2000–2001).

The penalty imposed under s 271(1)(c) is unsustainable if a bona fide explanation is given by the assessee.

Decided on: 27 May 2011.