JAMES KUDAKUTHIYIL CHACKO,KERALA vs. DCIT, INTERNATIONAL TAXATION CIRCLE, TRIVANDRUM

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

These appeals by assessee are directed against order of CIT(A)- 12 Bengaluru dated 22.6.2022 which is with regard to quantum addition in the assessment year 2013-14 passed by CIT(A)-12, Bengaluru dated 22.6.2022 with regard to confirming levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961 (in short “The Act”). 2. At the time of hearing, ld. A.R. filed a letter dated 3.7.2024. The assessee was not interested to press the appeal in ITA No.865/Coch/2022. Accordingly, this appeal is dismissed as not pressed. 3. With regard to ITA No.864/Coch/2022, the facts of the case are that for the assessment year under consideration, assessee sold 4 properties and offered capital gain in respect of 3 properties.

ITA Nos.864 & 865/Coch/2022 James Kudakuthiyil Chacko, Changanacherry Page 2 of 3 However, the assessee missed out the capital gain arised out of Edapally property in the return of income. The assessee pleaded before lower authorities that it was inadvertent mistake done by assessee’s accountant Sri Sinoj. To this effect, assessee filed an affidavit from his staff Sri Sinoj. The ld. AO has not given any credence to the said explanation offered by the assessee. He was of the opinion that assessee has concealed the capital gain to the tune of Rs.52,96,329/- in respect of Edapally property and levied penalty @ 100% tax sought to be evaded worked out at Rs.10,91,040/-. Against this assessee carried the appeal to ld. CIT(A), who has confirmed it. Once again assessee is in appeal before us. 4. We have heard the rival submissions and perused the materials available on record. Before the lower authorities, assessee given explanation that the assessee has made inadvertent error and not offered the capital gain in respect of Edapally property. This mistake was found at later stage and it was the mistake of assessee’s employee Sri Sinoj. He has filed an affidavit affirming his mistake. However, they have not considered the same as bona fide and rejected the claim of the assessee. In our opinion, when the assessee filed an affidavit affirming the facts related to the case, it is duty of the ld. AO to examine the deponent of that affidavit before taking any adverse view on the matter. However, in the present case, the ld. AO not examined the facts where the explanation given by the assessee that it was because of the mistake of the assessee’s staff. The capital gain arising out of transfer of Edapally property was not offered to taxation, though there was sworn affidavit filed by the assessee from the assessee’s side. Since in our opinion, the explanation given by the assessee is bona fide and from this point of view, it cannot be held that assessee has concealed income and or furnished any inaccurate particulars of income. Being so, we are inclined to delete the penalty levied by the ld. AO u/s 271(1)(c) of the Act.

ITA Nos.864 & 865/Coch/2022 James Kudakuthiyil Chacko, Changanacherry Page 3 of 3 5. In the result, appeal of the assessee in ITA No.864/Coch/2022 is allowed and ITA No.865/Coch/2022 is dismissed as not pressed. Order pronounced in the open court on 3rd July, 2024

Sd/- Sd/- (Soundararajan K.) (Chandra Poojari) Judicial Member Accountant Member

Bangalore, Dated 3rd July, 2024. VG/SPS

Copy to:

Asst. Registrar, ITAT, Bangalore.