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2020 (7) TMI 728 - AT - Income TaxPenalty u/s 271(1)(c) - whether for concealment of particulars of income or furnishing of inaccurate particulars of income? - Long Term Capital Gain earned on sale of agricultural land which was jointly held in equal share with his brother Sunil Sharma - HELD THAT:- AO has not clearly mentioned the limb, on the basis of which, penalty was proposed to be imposed. AO in assessment order or penalty notices did not specify the limb under which the penalty was initiated and simply issued a pre-printed notice without striking off the unnecessary portions of the notice. If the AO was of the view that the assessee has concealed the income or furnishing inaccurate particulars of income then he should have deleted or not mentioned the other limb for imposition of penalty i.e. concealing the particulars of income. The above act of the AO clearly shows that the entire exercise of initiation of penalty proceedings has been done without application of mind. With regard to the merits of the penalty so levied, we find that it was an inadvertent human error while taking the costs of acquisition at the time of computation of capital gain. It was a bonafide and unintentional mistake which was rectified during the course of assessment itself - In case of Price Water House Coopers P. Ltd. [2012 (9) TMI 775 - SUPREME COURT] held that ‘ the assessee should have been careful but in absence of due care in a case did not mean that assessee was guilty of either furnishing inaccurate particulars or attempting to conceal the income. Thus no penalty can be levied for a bona fide/inadvertent/human error’. Hon'ble M.P. High Court in case of CIT vs. SKY Auto Products Pvt. Ltd. [2004 (4) TMI 28 - MADHYA PRADESH HIGH COURT] held that where the assessee, a new businessman claimed depreciation for the full year in the first year of starting production though he was entitled only to fractional depreciation, it was a case of bonafide mistake on the part of the assessee. Such a ground cannot be a good ground for imposition of penalty u/s 271(1)(c). Hon'ble Supreme Court in the case of M/s. K.C. Builders vs. ACIT [2004 (1) TMI 7 - SUPREME COURT] held that mere omission from the return of an item of receipt does neither amount to be concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In the view of the above there was neither concealment nor the assessee furnished the inaccurate particulars of income. - Decided in favour of assessee.
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