No Penalty If Assessee made Bonafide Mistake in Returns and Revised the same Later: ITAT [Read Order]

Imposing Penalty - ITAT - Taxscan

The Delhi bench of Income Tax Appellate Tribunal has held that penalty under section 271(1)(c) of the Income Tax Act, 1961 would not attract  when the asessee made a bonafide mistakes while the computation of income and the same was revised by the assesee himself.

The assessee, in the instant case, is an individual engaged in the business of retail trading in sports goods and toys. During the assessment year he filed his returns declared the total income of Rs. 22, 44, 872.

During the course of assessment proceedings the AO has found that the assessee has received a sum of Rs. 19,98,488 from the sale of his residential property and also claimed deduction under section 54 of the act by showing  investment made in purchase of new residential house for an amount of ` 25 lakh. And the assessee stated that the investment in new residential house was Rs.20 lakhs as on the date of filing of return of income and accordingly filed a revised computation. The AO has accepted the income shown by the assessee as per the revised computation of income but also imposed a penalty of Rs.1.03 lakhs u/s 271(1)(c) of the Act.

The bench comprising of Judicial Member Saktijit Dey and Accountant Member G.Manjunatha observed that it is clear that the assessee has made a new investment in his residential property for claiming the exemption u/s 54 of the act and also claimed a higher deduction of Rs.25 lakhs instead of the actual investment of Rs.20 lakhs. But he has also filed the revised computation of income offering taxable Long term capital gain at a higher figure of Rs. 24,98,488. The assessee has admitted that he made a bonafide mistake while showing the total income in the books of accounts and also paid the tax due along with interest. It is revealed that the assessee has no intention to conceal the particulars of income. Therefore,  the bench has deleted the penalty imposed u/s 271(1)(c) of the act and the appeal filed by the assessee has allowed.

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