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आदेश/Order
Per Sudhanshu Srivastava, Judicial Member:
This appeal is preferred by the assessee against the order dated
5.9.2018 passed by the Ld. Commissioner of Income Tax-1, Ludhiana [herein referred to as ‘CIT(A)’] for assessment year 2014-15, wherein, vide the impugned order, the Ld. CIT(A) has upheld the levy of penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') to the tune of Rs. 2,20,797/-.
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana 2 2. At the outset, the Ld. Authorised Representative (AR) submitted
that there was a delay of 09 days in filing the captioned appeal. It has
been submitted in the Delay Condonation Application as well as in the
Affidavit, which has been enclosed along with the Delay Condonation
Application, that the appeal could not be filed within the time as the
impugned order and the related papers had been misplaced by the
assessee. It was prayed that in the interest of justice, the delay may
kindly be condoned and the appeal be admitted for regular hearing.
3.0 Per contra, the Ld. Sr. DR opposed the application for
Condonation of Delay.
4.0 Having heard both the parties on the issue of Condonation of
Delay, in the interest of substantial justice, we condone the delay of 09
days, as it is settled law that no assessee would be benefitted by simply
delaying the filing of the appeal. Accordingly, the delay is condoned
and the appeal is admitted.
5.0 It is seen from the records that assessee is a partner in a firm
engaged in the dyeing and finishing of textile yarn. The return of
income was filed declaring an income of Rs. 8,11,800/-. The assessee’s
case was selected for scrutiny under CASS and during the course of
assessment proceedings, it was noticed that the assessee had claimed
Long Term Capital Loss @ 20% amounting to Rs. 7,14,554/- in respect
of a property situated at 102B, Maharishi Balmiki Nagar, Village
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana 3 Haibowal Khurd, Distt. Ludhiana, which had been gifted by him to his
son Shri Akhilesh Garg on 20.7.2013. The assessee was asked by the
Assessing officer to explain as to why this loss, which had wrongly been
claimed, may not be disallowed and, in response, the assessee accepted
that there was a mistake due to some typographical error and, therefore,
the amount was added to the income of the assessee. Subsequently, the
impugned penalty was imposed on the said addition.
5.1 This levy of penalty was upheld by the Ld. CIT(A) and now the
assessee is before this Tribunal challenging the upholding of levy of
penalty by raising the following grounds of appeal:- 1. That the Ld. Commissioner of Income Tax (Appeals)-1, Ludhiana has erred in confirming the levy of penalty u/s 271(1)(c) to the tune of Rs.2,20,797/- as levied by the Assessing Officer, which is against the facts and circumstances of the case. 2. That the CIT(A) has failed to consider the fact that this is a bonafdie typographical mistake having occurred in the office of Tax Consultant of the assessee and, thus, there is no deliberate attempt on the part of the assessee to furnish inaccurate particulars of income. 3. That the Ld. CIT(A) has failed to consider the fact that as per the binding judgment of Hon'ble Punjab & Haryana High Court in the case of Inspecting Assistant Commissioner Vs Manoj Ahuja 150 ITR 696, wherein, it has been held that no litigant shall sufer on account of the mistake of the counsel. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
6.0. The Ld. Authorised Representative (AR) submitted that no penalty
was imposable as the assessee had only made a wrong claim and not a
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana 4 false claim in as much as all the facts were before the Assessing officer
at the time of assessment proceedings and for the reason that all the
figures were duly reflected in the computation of income. It was also
submitted that the mistake had occurred due to some error at the end of
the Chartered Accountant (C.A.) who had filed the return of income and
that the assessee should not be burdened with the penalty as it was a
genuine mistake.
7.0 Per contra, the Ld. Sr. DR submitted that it was not an incorrect
claim which had been made by the assessee but was actually a false
claim and that there was a definite deliberate collusion between the C.A.
and the assessee, whereby, the assessee had attempted to set off the
capital gains earned during the year against a false claim of capital loss
and, therefore, the penalty had rightly been imposed and upheld. It was
submitted that the assessee cannot escape the rigours of penalty by
shifting the blame to the C.A.
8.0 We have heard the rival submissions and have also perused the
material on record. The facts of the case are not in dispute. During the
year under consideration, the assessee had gifted one plot to his son
which was considered as a transfer and shown under the head ‘capital
gain’ which resulted in the assessee’s claiming Long Term Capital loss
of Rs. 7,14,554/- in the return of income. Since the assessee had also
earned Long Term Capital Gain amounting to Rs. 9,24,839/- during the
year under consideration, as a result of the impugned Long Term
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana 5 Capital Loss, the Long Term Capital Gain came to be reduced by the
amount of capital loss so wrongly claimed. The mistake was noticed by
the Assessing officer during the course of assessment proceedings and
on being confronted on the issue, the assessee surrendered the Long
Term Capital Loss. We have also gone through the computation of
income filed by the assessee and we see that this amount of capital loss
has been duly mentioned in the computation of income. Therefore,
apparently, we find that there is no concealment of any material fact by
the assessee. At best, it can be said that the claim made by the assessee
with respect to the Long Term Capital Loss was an incorrect claim or a
wrong claim but it was not a false claim by any measure in as much as
there was only a mistake in the legal sense that the gift made by the
assessee to the son was considered as a transfer in the computation of
income and the resultant figure was shown as a capital loss. It is also a
fact on record that the assessee had accepted the same at the time of
assessment proceedings.
8.1 Therefore, on the facts of the present case, we are of the
considered opinion that it is not a case where the particulars of income
in relation to which the penalty has been levied were either incorrect or
were concealed. The amount of capital loss has duly been disclosed in
the computation of income and, therefore, it cannot said to be a case of
the assessee attempting to make a false claim. The Hon'ble Apex Court
in the case of CIT Vs. Reliance Petro Products ltd reported in (2010)
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana 6 322 ITR 158 (SC) has clearly held that if all the particulars of income
are duly disclosed, the mere disallowance of claim or non-acceptance of
a claim would not attract levy of penalty u/s 271(1)(c) of the Act.
8.2 Similarly, the Hon'ble Apex Court in the case of Price Waterhouse
Coopers Pvt Ltd Vs. CIT reported in (2012) 25 taxmann.com (SC) has
held that a bonafide mistake on the part of the assessee would not attract
levy of penalty where all the particulars of income are duly disclosed
and where there is just a failure on the part of the assessee to act as per
the provisions of the Act while computing the income. Therefore, guided
by the judgements of the Hon'ble Apex Court, as aforementioned, we
hold that no penalty was legally imposable on the facts of the present
case. Accordingly, we set aside the order of the Ld. CIT(A) and direct
the Assessing officer to delete the impugned addition.
In the final result, the appeal of the assessee stands allowed.
Order pronounced on 17.01.2022.
Sd/- Sd/- ( N.K. SAINI) (SUDHANSHU SRIVASTAVA) Vice President Judicial Member Dated : 17.01.2022 “आर.के.” आदेशक ��त,ल-पअ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु/त/ CIT 4. आयकरआयु/त (अपील)/ The CIT(A) 5. -वभागीय��त�न2ध, आयकरअपील%यआ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File
ITA No. 1498-Chd-2018- Late Sh. Pawan Garg Thru L/h Sh. Akhil Garg, Ludhiana
7 आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar