2019 (8) TMI 989 - ITAT DELHI

Penalty u/s. 271(1)(c) - inadvertent omission of not excluding the short term loss u/s. 94(7) though the computation of income - HELD THAT:- AO has issued various notices u/s 143(2)/142(1), but has not made any enquiry for the disallowance in the case of the assessee u/s. 94(7).

AO on the basis of the query for dividend income on 07.12.2017 issued a notice u/s. 142(1) and asked the assessee to file the detail of all dividend / bonus income earned by the assessee in a specified format and filed all the details in the original return of income. In compliance of the same on 13.12.2017 Ld. Counsel for the assessee appeared and took adjournment for 15.12.2017 and examined all details of dividend / bonus income and found that there is an inadvertent clerical error committed by the Chartered Accountant and on the advice of Senior Chartered Accountant, the assessee filed voluntary revised computation of income wherein a Long Term Capital Gain (LTCG) of ₹ 1,43,53,921/- has been increased to ₹ 3,42,05,795/- due to the disallowance of ₹ 1,98,51,874/- u/s. 94(7) at the first opportunity as soon as it came to the notice of the assessee.

Assessee has committed this mistake for furnishing of inaccurate particulars in the return due to the inadvertent bonafide error in the claim due to one entry by the accounts staff posted at wrong date due to huge voluminous transactions and dividend coupons for dividend from same security punched at one voucher i.e. entry of two dividend received on same security (₹ 1,98,51,874/- received on 28.1.2015 and ₹ 3,38,62,717/- received on 25.3.2015 made cumulatively on 26.3.2015 i.e. date of sale of investments (26.3.2015) and receipt date of second dividend.

AO has completed the assessment on the basis of details furnished by the assessee, hence, under the circumstances assessee has not furnished inaccurate particulars of income. Assessee has paid voluntary taxes on disallowance u/s. 94(7) and not filed the appeal against the assessment order passed by the AO.

It is an admitted fact that assessee has not filed any false claim. We further note that the assessee fully disclosed all the information asked for and has nowhere furnished any inaccurate particulars. We find that there is no conclusive proof that the assessee has furnished inaccurate particulars of income. The AO has not brought enough incriminating material for furnishing of inaccurate particulars and there is no material for establishing the same and therefore in the given facts and circumstances of the penalty is not leviable, because all the documents submitted by the assessee were neither rejected by the AO as false or incorrect facts nor AO had clinched any further evidence for furnishing of inaccurate particulars of income.

Section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. On the facts and circumstances of this case the assessee’s conduct cannot be said to be contumacious so as to warrant levy of penalty. Levy of penalty in this case is not justified - Decided in favour of assessee.