2013 (1) TMI 960 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) u/s 271(1)(c) of the I.T. Act, 1961 for assessment year 2008-09.

Summary:

Issue 1: Claiming deduction under wrong provision of law

The assessee sold an industrial plot and claimed deduction u/s 54 instead of u/s 54F due to advice from the Chartered Accountant. The Assessing Officer imposed a penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. The AR argued that the assessee acted in good faith based on CA's advice and the penalty was unjustified.

Issue 2: Bonafide mistake in claiming deduction

The AR contended that the failure to deposit the total amount in the Capital Gains Scheme was not intentional and did not warrant a penalty u/s 271(1)(c). The Revenue supported the CIT(A)'s order citing non-compliance with the Act.

The Tribunal found that the assessee intended to invest in a residential property but deposited an amount equivalent to long term capital gains instead of the total sale consideration as required u/s 54F. Despite the error, the Tribunal held that the assessee acted in good faith and disclosed all income particulars. The penalty u/s 271(1)(c) was deemed unwarranted under section 273B of the Act. Consequently, the penalty was directed to be deleted, and the appeal was allowed.

The appeal of the assessee was allowed, and the penalty u/s 271(1)(c) was directed to be deleted.