TMI Blog2010 (4) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961, amounting to Rs. 28,082. 2. The assessee had paid appeal fees amounting to Rs. 500. The registry issued a notice to her stating that the fees so paid was short of the requisite amount of fees to be paid by Rs. 9,500. In the course of hearing, the ld. counsel for the assessee relied on the decision of Hon'ble Patna High Court in the case of Dr. Ajith Kumar Pandey v. ITAT [2009] 310 ITR 195 in which it was held that in case of levy of penalty under section 271, fees of Rs. 500 is to be paid and not the fees calculated with reference to the assessed income. The relevant portion of the judgment at placitum 3 and 4 are reproduced below : "3. A look at the sub-section would make it abundantly clear that in the case an appeal is filed on or after 1-10-1998, the appeal must be accompanied by a fee of what has been provided in clauses (a), (b), (c) and (d) of the said sub-section. Clauses (a), (b) and (c) provides that fees as mentioned therein should be determined on the basis of total income of the assessee as mentioned in those clauses. Therefore, in the case of an appeal, where the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was that the adjustment was a mistake made while preparing the return. As soon as the mistake came to notice in the course of assessment proceedings, the claim of adjustment was withdrawn. The Assessing Officer did not find the explanation to be satisfactory. It was mentioned that a long period elapsed between filing the return and receipt of notice under section 143(2) by the assessee. If there was not any mala fide intention in making the claim, it could have been withdrawn before the receipt of the notice. However, the claim was withdrawn after lapse of about 10 months of filing of the return, when notice under section 143(2) had been issued to the assessee. Therefore, it was held that the assessee made herself liable for levy of penalty. Accordingly, minimum penalty of Rs. 28,082 was levied. The matter was agitated in appeal. The submission of the assessee before him was that the assessee had furnished complete details of long-term capital loss and short-term capital gains. Therefore, the case was one of bona fide mistake. Therefore, it was argued that the penalty levied by the Assessing Officer may be deleted. The ld. CIT(Appeals) did not accept this explanation more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and correct particulars regarding computation of losses under the aforesaid heads. The Assessing Officer has also not given any finding of mala fide claim in the assessment order. In such circumstances and looking to the fact that the assessee had declared substantial income of Rs. 15,27,130, her explanation should have been accepted by the ld. CIT(Appeals). 3.2 In order to support the aforesaid contention, reliance was placed on the decision of the Supreme Court in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi [1979] 118 ITR 507, a case dealing with delay in filing special leave petition. It was inter alia submitted that the delay occurred on account of ignorance of law on the part of the counsel of the assessee, a plea rejected by the High Court. It was held that it is a settled law that the mistake of counsel may in certain circumstances be taken into account in condoning the delay. However, there is no general proposition of law in this behalf. The question always is whether the mistake was bona fide or a devise to cover up the latches? Further, reliance was placed on the decision of the Supreme Court in the case of Dilip N. Shroff v. Jt. CIT [2007] 291 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the facts of the case and submissions made before us. The facts of the case are that the assessee incurred long-term capital loss of Rs. 82,844 and earned short-term capital gains of Rs. 17,33,475 in this year. The loss was adjusted against the profits. However, after issue of notice under section 143(2), the claim of the adjustment was withdrawn in the course of hearing. The question is, whether the ld. CIT(Appeals) was right in confirming the penalty of Rs. 28,082 under section 271(1)(c)? The case of the ld. counsel is that the claim was a bona fide mistake. All facts regarding computation of the loss and the gains were furnished along with the return of income. Thus, it is neither a case of concealment of income nor furnishing inaccurate particulars of income. The case of the ld. DR is that the claim of adjustment was withdrawn in the course of hearing after lapse of about one year from the date of filing the return of income. The claim was patently incorrect in law. Therefore, the penalty is leviable. 4.1 In the case of Naresh Kumar Verma (supra), relied upon by the ld. CIT(Appeals), the assessee had furnished wrong facts about two sales in respect of which d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished inaccurate particulars about any part of her income. The orders of authorities below and arguments placed before us by the ld. DR do not in any manner show that there was falsity of facts made by the assessee in computation of long-term capital loss or short-term capital gain. On the contrary computation of the loss and the profit has been accepted by the Assessing Officer. The only issue is regarding setting off of the loss against the gains. It is an admitted fact that the position of law in this behalf is clear. However, it is argued by the ld. counsel that setting off of the loss against the gains was an inadvertent mistake, which should be taken as bona fide mistake. We have considered this argument also. Both species of income are classified under the head "capital gains", one as short-term capital gains and the other as long-term capital loss, depending upon the period of holding the asset. The assessee could be under bona fide belief that one can be set off against the other in the same year. In absence of proving falsity in the details regarding computation of income, we are of the view that she cannot be charged with the penalty. In other words, in such matters o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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