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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE
This appeal is filed by the assessee against order dated 30.11.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2014-15.
The assessee has raised the following grounds of appeal :-
“1. The Learned CIT (Appeals) erred in confirming the penalty in respect of following addition made in the assessment order: a) Addition on account of Short Term Capital Gain - Rs.7,21,869 b) Disallowance of Depreciation - Rs.2,99,294 c) Addition on account of Short Credit - Rs.1,83,265
2. The Learned CIT (Appeals) erred in relying on the decision of Dharmendra Textile Processors & Others
The Learned CIT (Appeals) erred in disregarding the submission made during the course of appellate proceedings.
4. The Learned CIT (Appeals) erred in confirming penalty u/s.271(1)(c) of Rs.7,12,568/- as against Rs.3,72,168/- which is correct leviable penalty.”
Assessment Year: 2014-15 Page 2 of 3 3. The assessee Company has filed its original return of income on 27.09.2014 declaring total income of Rs.31,13,990/-. The assessment under Section 143(3) of the Income Tax Act, 1961 was completed on 14.12.2016 on total income of Rs.41,74,230/-. The Assessing Officer made addition on account of Short Term Capital Gain amounting to Rs.7,21,869/-, disallowance of depreciation amounting to Rs.2,99,294/- and addition on account of short credit amounting to Rs.1,83,265/-. Penalty proceedings under Section 271(1)(c) of the Act were initiated vide issuance of notice under Section 274 read with Section 271(1)(c) of the Act on 14.12.2016. The penalty proceedings were initiated for concealing particulars of income in respect of all the three additions/disallowance. After taking cognisance of the reply of the assessee, the Assessing Officer imposed penalty of Rs.7,12,568/-
Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that the CIT(A) has levied excessive and unreasonable penalty and in fact there was bonafide mistake on the part of the assessee regarding the computation of total income which should have been taken into account by the Assessing Officer as well as by the CIT(A). In respect of deemed Short Term Capital Gain/loss, the assessee should have claimed 15% instead of 50% which is a bonafide mistake of a typographical error and, therefore, relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Ltd, 322 ITR 158 (SC) & Price Waterhouse Coopers (P) Ltd. vs. CIT, 348 ITR 306 (SC), the penalty under Section 271(1)(c) of the Act will not be attracted.
The Ld. DR relied upon the Assessment Oder, Penalty Order and the order of the CIT(A).
Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has in fact not concealed any income but in fact there was a bonafide mistake of the particular claim of deemed Short Term Capital Gain/loss and, therefore, this cannot be treated as Assessment Year: 2014-15 Page 3 of 3 concealment of income as in the other details the assessee has revealed 15% of the claim on new Motor Car. In the light of the decision of Hon’ble Supreme Court in case of Price Waterhouse Coopers (P) Limited (supra), the Hon’ble Supreme Court has categorically stated that if there is bonafide mistake of inadvertent error, the assessee is not guilty of either furnishing inaccurate particulars or attempt to conceal its income. Therefore, invocation of penalty in the present case of the assessee will not be appropriate.
In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 3rd June, 2024.