2023 (1) TMI 172 - AT - Income Tax
Levy of penalty u/s 271(1)(c) - assessee had claimed excess long-term capital loss in the original return and thus wilfully attempt to defraud the Revenue by not disclosing the true and correct income - HELD THAT:- As is evident from the record, the assessee initially claimed long-term capital loss on the sale of residential property, wherein she is holding a 50% share. On pointing out the discrepancy during the assessment proceedings, the assessee filed a revised statement of income wherein the long-term capital loss was re-computed. It is not a case wherein due to incorrect computation of capital loss there was any impact on the taxable income for the year under consideration. However, only the loss claimed in the return, which was carried forward to future years for set-off was reduced. Further, it is also not a case wherein the assessee has disputed the computation of long-term capital loss without any substantial basis.
Thus, once the discrepancy was pointed out, the assessee readily revised the statement of income and recomputed the long-term capital loss which has also been accepted by the Revenue without any variation in the assessment order. Therefore we are of the considered opinion that the assessee made a bona fide mistake in the computation of a long-term capital loss in its original return of income, which was corrected by the assessee by filing the revised computation during the assessment proceedings.
We are of the considered view that this is not a fit case for the levy of penalty under section 271(1)(c) - Accordingly, the grounds raised in the present appeal are allowed and the AO is directed to delete the penalty, as affirmed by the learned CIT(A). Appeal by the assessee is allowed.