TMI Blog2003 (1) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... UDGMENT The appeal was admitted in terms of the following question: "Whether the mistake committed by counsel in advising the assessee and the assessee on such advice submitted return omitting a particular item to be shown in the return can be said to be an act committed by the assessee in concealing deliberately the item of income and thus is liable for penalty under section 271(1)(c) of the Income-tax Act, 1961?" The relevant assessment year is 1992-93. The assessee-appellant is an individual and is carrying on the business of transport. In the preceding year, the assessee was a partner in Gautam Roadways but became a proprietor from the assessment year 1991-92. He filed the return on September 21, 1992. The appellant has sold his i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on April 26, 1991, and in the revised return the assessee has annexed a note along with the revised return that as assessee has purchased new residential properties against the consideration received on the sale of his house property on April 26, 1991, the assessee is not liable to pay any tax on such capital gain. That capital gain was calculated to Rs. 1,41,000 and penalty has been imposed but learned counsel Mr. Ranka, submits that when the transaction regarding sale and purchase of the properties in question has been disclosed in the return, no penalty is attracted. Mr. Mathur, learned counsel for the respondents, submits that in the original return he has not shown any capital gain tax. In the revised return though he has submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in accordance with my advice. I am working individually. I do not form part of any firm. My view was found mistaken. I was unaware of the view adopted by the Assessing Officer. The mistake was bona fide and was committed after due diligence." When the assessee has disclosed the transaction which is the basis for capital gains tax and though wrongly claimed exemption from the capital gains tax, but that cannot be a case of penalty under section 271(1)(c) of the Income-tax Act, 1961. If it has claimed any exemption after disclosing the relevant basic facts and under ignorance of the provisions of the Act of 1961, and not offered that amount for tax, in such cases, penalty should not be imposed. In such cases rather it is the duty of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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