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Income Tax Appellate Tribunal, ‘SMC’ ‘B’ BENCH, CHENNAI
Before: Shri A. Mohan Alankamony
आदेश / O R D E R
This appeal is filed by the Revenue and the cross objection is filed by the assessee with respect to the order passed by the Commissioner of Income Tax (Appeals)-3, Coimbatore dated 29.06.2016 in for the assessment year 2010-11 passed u/s. 271(1)(c) of the Act.
The Revenue has filed the appeal with a delay of 26 days. The Ld. DR submitted that the file was misplaced due to which the delay had occurred, he further pleaded that the delay may be condoned and the appeal may be taken up for hearing. The Ld. AR also pleaded that there was a delay of 12 days in filing the appeal due to the lapse of her accountant and the same may be condoned. Considering the prayer of the Ld. DR and the Ld. AR, I hereby condone the delay of in filing the appeal by both the parties.
The Revenue has raised two grounds in its appeal, however the crux of the issue is that the Ld. CIT(A) has erred in deleting the penalty levied by the Ld. AO u/s. 271(1)(c) of the Act. The assessee has also in her cross objection raised a ground that the Ld. AO erroneously levied penalty at 1½ times of the tax sought to be evaded instead of 100% of the tax sought to be evaded.
The brief facts of the case are that the assessee is an individual earning income under the head house property and other sources, filed her return of income on 28.03.2011 admitting total income of Rs.2,18,520/-. Subsequently, the assessment was reopened and thereafter assessment was completed u/s.143 (3) r.w.s. 147/148 of the Act on 10.03.2015 wherein the Ld. AO assessed made addition of Rs.36,34,089/- towards short term capital gain. The assessee had shown the capital gain as exempt u/s.10(38) of the Act in her belated return filed on 28.03.2011. The Ld. AO opined that the assessee had concealed the particulars of her income as well as furnished inaccurate particulars of such income and therefore levied penalty of Rs.16,35,340/- being 1½ times of the amount of tax sought to be evaded by invoking the provisions of Section 271(1)(c) of the Act. On appeal, the Ld. CIT(A) deleted the penalty levied by the Ld. AO, because the assessee had only wrongly claimed the “capital gain” exempt u/s. 10(38) of the Act and therefore there was no concealment of income. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us.
Before us the Ld. DR vehemently argued in support of the order of the Ld. AO by stating that the assessee had willfully concealed the income by furnishing inaccurate particulars of income. It was therefore pleaded that the order of the Ld.AO may be confirmed. The Ld. AR on the other hand, pleaded that the assessee had disclosed her income in the return but had only inadvertently claimed exemption u/s. 10(38) of the Act which was a mistake committed by her accountant. He therefore pleaded that the assessee should not be penalized for the wrong claim of exemption. He further argued by stating that the entire fact with respect to the earning of income was disclosed in the return of income.
I have heard the rival submissions and carefully perused the materials on record. From the facts of the case, it is evident that the assessee had disclosed her income in her return; hence there cannot be concealment of income. Further, all the particulars of income of the assessee is also furnished. However, the assessee had only claimed deduction u/s. 10(38) of the Act by ignorance on her part or it being a mistake committed by her accountant. At this juncture, we are reminded of the case M/s.Price Water House Coopers Pvt. Ltd. vs. CIT & others reported in 348 ITR 306 wherein the Hon’ble Apex court observed the facts and decided the case as follows:
“The facts of the case were peculiar and somewhat unique. All that had happened was that through a bonafide and inadvertent error, the assessee while submitting its return failed to add the provisions for gratuity to its total income. The assessee should have been careful but the absence of due care, in a case such as the present, did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income. On peculiar facts of this case, the imposition of penalty on the assessee was not justified”
The case of the assessee is also somewhat similar to the case decided by the Hon’ble Apex court supra. Therefore, I am of the considered view that the Ld. CIT(A) has rightly deleted the addition made by the Ld. AO.
In the result, appeal filed by the Revenue as well the cross objection filed by the assessee are dismissed.
Order pronounced in the court on 22nd February, 2017.