The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that the standard belief or mistake in computing income tax cannot be termed as furnishing of inaccurate particulars or concealment of income and thus deleted the penalty under Section 271(1)(c) of the Income Tax Act.
The assessee Sanjay Chandulal Upadhyay filed its return of income declaring total income of Rs.5,60,737/-. Thereafter, the assessee has filed his revised return of income declaring total income at Rs.9,93,733/-. The assessment was completed under Section 143(3) of the Income Tax Act, 1961 determining total income of Rs.11,80,970/-.
During the assessment proceedings the Assessing Officer (AO) noticed that the assessee had claimed expenses relating to AUDA to the tune of Rs.2,08,037/- which was related to the entire land and, therefore, the AO made addition of Rs.6,20,210/- under the head of “Capital Gain” and imposed penalty of Rs.1,92,000/- under Section 271(1)(c) of the Income Tax Act.
Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (appeals) [CIT(A)], which dismissed the appeal of the assessee.
Further aggrieved the assessee filed an appeal before the Tribunal.
At the time of hearing none appeared on behalf of the assessee, therefore, the submissions made by the assessee before the CIT(A) are taken as contentions of the assessee for the present appeal before the Tribunal.
The Departmental Representative (DR) N.J. Vyas, relied upon the Assessment Order, Penalty Order and the order of the CIT(A).
The Single Member Bench comprising of Ms. Suchitra Kamble, Judicial Member observed that the assessee while computing the income and filing revised income was under bonafide mistake/bonafide belief that the assessee can claim the entire charges of amount paid to the AUDA as Capital Gain as deduction under Capital Gain.
It was held that the standard belief or mistake cannot be termed as furnishing of inaccurate particulars or concealment of income. The Tribunal relied on the Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Limited and therefore held that the penalty does not survive.
Hence, appeal filed by the assessee was allowed.
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