TMI Blog2016 (1) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... important point is that the income returned by the assessee has been accepted by the assessing officer as it is, without making any adjustment. Hence, in view of the judgments referred above, the mistake committed in computation of tax cannot be considered to be a case of concealment of particulars of income or furnishing of inaccurate particulars of income. Even if it is considered for a moment to be a case of furnishing of inaccurate particulars of income, the same has been caused due to a clerical mistake committed by the clerk who fed the details into the computer and hence the decision rendered by the Hon’ble Supreme court in the case of Price waterhouse coopers (P) Ltd (2012 (9) TMI 775 - SUPREME COURT ) supports the case of the assessee. Accordingly, we are of the view that the facts and circumstances of the case does not warrant levy of penalty u/s 271(1)(c) of the Act. Accordingly, we set aside the order of Ld CIT(A) and direct the AO to delete the impugned penalty. - Decided in favour of assessee. - I.T.A. No.5647/Mum/2013 - - - Dated:- 19-11-2015 - SHRI B.R.BASKARAN, AM AND PAWAN SINGH, JM For The Appellant : Shri Vimal Punmiya For The Respondent : Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of tax by oversight while filing the return of income. He further submitted that assessee has furnished all the details relating to STCG arising on sale of shares in the return of income. He further submitted that the assessee has offered proper explanations before the AO during the course of penalty proceedings and explained all the details. Accordingly, he submitted that the assessee cannot be considered to have concealed particulars of income or furnished inaccurate particulars of income. He submitted that the penalty levied on identical reasoning has been deleted by the Co-ordinate Bench of the Tribunal in the following cases: a) Asia Attractive Dividend Stock Fund Mother Fund V/s Dy.Director of Income Tax (International Transaction) in ITA No.3908/Mum/2012 (AY-2008-09); b) ACIT V/s Smt.Cecilia Haresh Chaganlal (2015) 58 taxmann.com 312 (Mum-Trib). He further submitted that the decision rendered by the Tribunal in the case of Asia Attractive Dividend Stock Fund Mother Fund (supra) has since been approved by the Hon ble Bombay High Court in its decision reported in (2013) 35 taxmann.com 265 (Bom). He further submitted that the facts that the assessee did not pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the assessing officer in the penalty proceedings by stating that the calculation error has been committed by the clerk feeding the data. However, the assessee has furnished all the proofs, documents and details relating to the STCG which are material to the computation of total income. Accordingly, it appears that the assessee sought protection as per the Explanation 1 given under sec. 271(1)(c) of the Act. In effect, the assessee s contention is that there is no concealment of particulars of income or there is no furnishing of inaccurate particulars of income and there was a bonafide mistake in working out the tax payable by it. However, the AO has taken the view that the assessee has taken a chance by computing tax at a lower rate and the same was unearthed as a result of scrutiny assessment. Further the assessee did not correct the mistake by filing revised return of income suo moto. Accordingly, the AO held that it was a fit case for levying penalty u/s 271(1)(c) of the Act. It is pertinent to note that the assessing officer did not state, neither in the assessment order nor in the penalty order, about the nature of default, i.e., whether it is a case of concealment of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption is available to the assessee in respect of the Long Term Capital Gain arising from sale of such Listed shares, Bonds, securities etc., either to take the benefit of indexed cost or apply concessional rate of tax at 10% whichever is beneficial to the assessee. Therefore, there is no ambiguity or scope of any misunderstanding about the applicability of section 112 of the Income Tax Act only on the Long Term Capital Gain arising from sale of such Listed Shares, Securities, Bonds etc. In the case in hand, the Long Term Capital Gain arose on sale of paintings, therefore, the income from Long Term Capital Gain from sale of paintings is not allowable for concessional rate of tax as per the proviso to section 112(1) of the Income Tax Act. The assessee has also filed a second revised return of income on 11.7.2011, in which the assessee offered the Long Term Capital Gain to tax at the rate of 20% as it was offered in the original return of income, though the said return of income was treated as invalid being barred by limitation. The Penalty proceedings have been initiated by the AO based on the first revised return filed by the assessee wherein the concessional rate of tax was claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Capital Gain in question which was not claimed by the assessee. In view of the above facts and circumstances of the case, we do not find any error or illegality in the impugned order of CIT(A) in deleting the penalty by following the Judgment of Hon ble High Court in the case of Price Watercoopers (Supra) Thus, it can noticed that the co-ordinate bench of Tribunal has expressed the view that mere application of concessional rate of tax would not ipso facto lead to the conclusion that the assessee has concealed the particulars of income. 9. In the case of Asia Attractive Dividend Stock Fund (supra) relied upon by the assessee, the co-ordinate bench of Tribunal has considered an identical issue. The assessee in the above said case also worked out the tax payable on Short term capital gain at concessional rate u/s 111A of the Act, whereas it was liable to pay tax on STCG under normal rate. During the course of assessment proceedings, the assessee accepted the said fact and submitted that it was a bonafide clerical error. The assessee had also paid higher advance tax and the same was taken in support of the claim of bonafide mistake. The co-ordinate bench of Tribunal cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions. AO has not disputed that total capital gain as disclosed by the assessee was found to be correct and assessed. We are of the considered view that such a mistake to state lower rate of tax applicable in the return of income cannot constitute furnishing inaccurate particulars of income particularly when assessee has furnished all the relevant materials in the return filed . The Hon'ble Kolkata High Court in the case of Udayan Mukherjee(supra)(291 ITR 318) held that if a mistake is committed in working out indexation, the mistaken indexation would not amount to furnishing of wrong particulars within the purview of section 271(1)(c) of the Act as the same can be corrected by the AO on the basis of particulars furnished. In the case before us also, AO could apply the chargeable rate of tax as applicable to the transaction on the basis of information furnished by the assessee and , therefore, the mistake committed by the assessee to apply lower rate of tax on the disclosed income cannot amount to furnishing inaccurate particulars nor concealment of income and same does not come within the purview of section 271(1)(c) of the Act. The ITAT Mumbai in the case of Hindalco Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The case of the assessec under consideration is squarely covered by the above judgment of the Apex Court. The assessee demonstrated that their claim was bona fide claim. In the light of above discussion, we don't find that the case under consideration is a fit case for levy penalty under section 271(1)(c) of the Act we therefore cancelled the penalty levied. 13. The Hon'ble Apex Court in the case of Reliance Petroproducts Pvt Ltd. (supra)(322 ITR 158) held that there can be no dispute that everything would depend upon the return filed because that is the only document, where assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in the case when it was found that assessee had furnished full details and had not concealed any particulars of income and where there is no finding that any details supplied by the assessee in his return of income are found to be incorrect or erroneo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars of income and that too when assessee rectified the said mistake suo moto before assessment proceedings were completed and stated that said mistake had occurred inadvertently while computing the income. Not only this, the Hon'ble Apex Court by its order dated 25.9.2012 in Civil Appeal No.6924/2012(arising out of S.L.P.(C) No.10700 of 2009) in the case of Price Waterhouse Coopers Pvt Ltd. vs. CIT, has held that when there is a bonafide and inadvertent error to add the provision for gratuity to its total income while submitting its return, this can only be described as a human error which we are all prone to make. In the said case, the regular assessment was completed under section 143(3) of the Act. Subsequently, reassessment proceedings were initiated on the ground that assessee made provision of ₹ 23,70,306 for payment of gratuity. AO stated that in the reasons recorded that the provisions is not allowable under section 40A(7) of the Act and was required to be added back. Soon after the assessee was communicated the said reasons for reopening the assessment, assessee stated that it realized the mistake and, accordingly, by a letter dated 20.1.2005 informed the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and had not intended to or attempted to either conceal its income or furnish inaccurate particulars. Considering above case and facts of the case before us, we are of the considered view that above decision of Hon'ble Apex Court squarely applies to the facts of the case. Therefore, we hold that assessee has committed an inadvertent error in the return of income to charge the tax @ 10% instead of applicable rate of tax @ 30% on short term capital gains shown by the assessee as assessee has not paid STT on share transactions. Hence, assessee has not concealed its income or furnished wrong particulars of facts. Accordingly, provisions of section 271(1)(c) of the Act on the facts and in the circumstances of the case, are not applicable. In view of above facts, we delete the penalty levied by authorities below by allowing ground of appeal taken by assessee. 10. In the above said case, the Tribunal, by following the decision rendered by the Hon ble Kolkatta High Court in the case of Udayan Mukherjee (supra), has expressed the view that the mistake committed by the assessee to apply lower rate of tax on the disclosed income cannot amount to furnishing of inaccurate particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the bonafide mistakes committed by the assessees in the case of M/s Precision Electrical Wiring System P Ltd Vs. ITO (ITA No.2349/Mum/2009 dated 19-01-2011. The above said assessee claimed deduction u/s 80IB of the Act for AY 2005-06, even though its eligibility to claim the said deduction had expired in the immediately preceding year. When the said mistake was pointed out by the AO, the assessee readily accepted its mistake and agreed for disallowance of the claim. The assessing officer levied penalty u/s 271(1)(c) of the Act. The Tribunal deleted the penalty by following the decisions rendered by Hon ble Punjab Haryana High Court in the following cases:- (a) Sidhdharth Enterprises (322 ITR 80)(P H) (b) Arisudana Spinning Mills Ltd (326 ITR 429)(P H) In the case of Sidhdharth Enterprises (supra), the Tribunal had deleted the penalty by holding that the furnishing of inaccurate particulars of income was a silly mistake and not a deliberate attempt to evade tax. The High Court held that the view taken by the Tribunal could not be held to be perverse. 14. In view of the foregoing discussions, we are of the view that the assessee has committed a bonafide mistake in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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