Sudhanshu Srivastava ORDER
Sudhanshu Srivastava, Member (J)
1. This appeal is preferred by the assessee against the order dated 5.9.2018 passed by the Ld. Commissioner of Income Tax-1, Ludhiana [herein referred to as 'CIT(A)'] for assessment year 2014-15, wherein, vide the impugned order, the Ld. CIT(A) has upheld the levy of penalty imposed u/s. 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') to the tune of Rs. 2,20,797/-.
2. At the outset, the Ld. Authorised Representative (AR) submitted that there was a delay of 09 days in filing the captioned appeal. It has been submitted in the Delay Condonation Application as well as in the Affidavit, which has been enclosed along with the Delay Condonation Application, that the appeal could not be filed within the time as the impugned order and the related papers had been misplaced by the assessee. It was prayed that in the interest of justice, the delay may kindly be condoned and the appeal be admitted for regular hearing.
3. Per contra, the Ld. Sr. DR opposed the application for Condonation of Delay.
4. Having heard both the parties on the issue of Condonation of Delay, in the interest of substantial justice, we condone the delay of 09 days, as it is settled law that no assessee would be benefited by simply delaying the filing of the appeal. Accordingly, the delay is condoned and the appeal is admitted.
5. It is seen from the records that assessee is a partner in a firm engaged in the dyeing and finishing of textile yarn. The return of income was filed declaring an income of Rs. 8,11,800/-. The assessee's case was selected for scrutiny under CASS and during the course of assessment proceedings, it was noticed that the assessee had claimed Long Term Capital Loss @ 20% amounting to Rs. 7,14,554/- in respect of a property situated at 102B, Maharishi Balmiki Nagar, Village Haibowal Khurd, Distt. Ludhiana, which had been gifted by him to his son Shri Akhilesh Garg on 20.7.2013. The assessee was asked by the Assessing officer to explain as to why this loss, which had wrongly been claimed, may not be disallowed and, in response, the assessee accepted that there was a mistake due to some typographical error and, therefore, the amount was added to the income of the assessee. Subsequently, the impugned penalty was imposed on the said addition.
5.1. This levy of penalty was upheld by the Ld. CIT(A) and now the assessee is before this Tribunal challenging the upholding of levy of penalty by raising the following grounds of appeal:-
1. That the Ld. Commissioner of Income Tax (Appeals)-1, Ludhiana has erred in confirming the levy of penalty u/s. 271(1)(c) to the tune of Rs. 2,20,797/- as levied by the Assessing Officer, which is against the facts and circumstances of the case.
2. That the CIT(A) has failed to consider the fact that this is a bonafdie typographical mistake having occurred in the office of Tax Consultant of the assessee and, thus, there is no deliberate attempt on the part of the assessee to furnish inaccurate particulars of income.
3. That the Ld. CIT(A) has failed to consider the fact that as per the binding judgment of Hon'ble Punjab & Haryana High Court in the case of Inspecting Assistant Commissioner Vs. Manoj Ahuja MANU/PH/0300/1984 : 150 ITR 696, wherein, it has been held that no litigant shall suffer on account of the mistake of the counsel.
4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
6. The Ld. Authorised Representative (AR) submitted that no penalty was imposable as the assessee had only made a wrong claim and not a false claim in as much as all the facts were before the Assessing officer at the time of assessment proceedings and for the reason that all the figures were duly reflected in the computation of income. It was also submitted that the mistake had occurred due to some error at the end of the Chartered Accountant (C.A.) who had filed the return of income and that the assessee should not be burdened with the penalty as it was a genuine mistake.
7. Per contra, the Ld. Sr. DR submitted that it was not an incorrect claim which had been made by the assessee but was actually a false claim and that there was a definite deliberate collusion between the C.A. and the assessee, whereby, the assessee had attempted to set off the capital gains earned during the year against a false claim of capital loss and, therefore, the penalty had rightly been imposed and upheld. It was submitted that the assessee cannot escape the rigours of penalty by shifting the blame to the C.A.
8. We have heard the rival submissions and have also perused the material on record. The facts of the case are not in dispute. During the year under consideration, the assessee had gifted one plot to his son which was considered as a transfer and shown under the head 'capital gain' which resulted in the assessee's claiming Long Term Capital loss of Rs. 7,14,554/- in the return of income. Since the assessee had also earned Long Term Capital Gain amounting to Rs. 9,24,839/- during the year under consideration, as a result of the impugned Long Term Capital Loss, the Long Term Capital Gain came to be reduced by the amount of capital loss so wrongly claimed. The mistake was noticed by the Assessing officer during the course of assessment proceedings and on being confronted on the issue, the assessee surrendered the Long Term Capital Loss. We have also gone through the computation of income filed by the assessee and we see that this amount of capital loss has been duly mentioned in the computation of income. Therefore, apparently, we find that there is no concealment of any material fact by the assessee. At best, it can be said that the claim made by the assessee with respect to the Long Term Capital Loss was an incorrect claim or a wrong claim but it was not a false claim by any measure in as much as there was only a mistake in the legal sense that the gift made by the assessee to the son was considered as a transfer in the computation of income and the resultant figure was shown as a capital loss. It is also a fact on record that the assessee had accepted the same at the time of assessment proceedings.
8.1. Therefore, on the facts of the present case, we are of the considered opinion that it is not a case where the particulars of income in relation to which the penalty has been levied were either incorrect or were concealed. The amount of capital loss has duly been disclosed in the computation of income and, therefore, it cannot said to be a case of the assessee attempting to make a false claim. The Hon'ble Apex Court in the case of CIT Vs. Reliance Petro Products Ltd. reported in MANU/SC/0182/2010 : (2010) 322 ITR 158 (SC) has clearly held that if all the particulars of income are duly disclosed, the mere disallowance of claim or non-acceptance of a claim would not attract levy of penalty u/s. 271(1)(c) of the Act.
8.2. Similarly, the Hon'ble Apex Court in the case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT reported in MANU/SC/0799/2012 : (2012) 25 taxmann.com (SC) has held that a bonafide mistake on the part of the assessee would not attract levy of penalty where all the particulars of income are duly disclosed and where there is just a failure on the part of the assessee to act as per the provisions of the Act while computing the income. Therefore, guided by the judgments of the Hon'ble Apex Court, as aforementioned, we hold that no penalty was legally imposable on the facts of the present case. Accordingly, we set aside the order of the Ld. CIT(A) and direct the Assessing officer to delete the impugned addition.
In the final result, the appeal of the assessee stands allowed.
Order pronounced on 17.01.2022.
© Manupatra Information Solutions Pvt. Ltd.