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2020 (4) TMI 484 - AT - Income TaxPenalty u/s 271(1)(c) - addition invoking provision of Section 50C and Capital Gain was levied - matter was referred to the DVO - revision of belated return seeked - amount was inadvertently shown in unsecured loan - whether assessee cannot be exonerated of its liability by claiming that it had filed an invalid revised return? - HELD THAT - The assessee has submitted that this was an inadvertent mistake on the part of the Accountant of the assessee which has not been accepted by the authorities below In the case of CIT vs Fortune Hotels and Estates (P.) Ltd. 2014 (10) TMI 783 - BOMBAY HIGH COURT had expounded that when in respect of sale of property matter was referred to DVO to determine sale consideration at a higher amount that by itself would not amount to furnishing inaccurate particulars of income so as to levy penalty under Section 271(1)(c) As in the case of Price Waterhouse Coopers (P.) Ltd. vs CIT 2012 (9) TMI 775 - SUPREME COURT had expounded that an inadvertent error cannot lead to rigours of penalty. Furthermore a larger bench of the Honourable Court in the case of Hindustan Steel Ltd. vs State of Orissa 1969 (8) TMI 31 - SUPREME COURT had expounded that when the conduct of the assessee is not contumacious the authority may not levy the penalty. That technical and venial breach may not lead to levy of penalty. Conduct of the assessee in this case is not contumacious to warrant levy of penalty and assessee s plea that there was an inadvertent error on the part of the Accountant deserves to be accepted. - Penalty deleted. - Decided in favour of assessee.
Issues:
Penalty under Section 271(1)(c) of the Income Tax Act, 1961 for filing a belated return and declaring Capital Gains. Analysis: The appeal was against the penalty of ?95,500 levied under Section 271(1)(c) of the Income Tax Act, 1961. The assessee had filed a belated return and subsequently a revised return declaring Capital Gains. The Assessing Officer invoked Section 50C of the Act, and a penalty was imposed on the Capital Gain declared in the revised return. The assessee claimed it was a bona fide mistake, but authorities did not accept that the mistake was on the part of the Accountant. The issue was whether a belated return can be revised and if the penalty under Section 271(1)(c) was justified. The assessee argued that the revised return was filed voluntarily without any query from the Assessing Officer, and there was no contumacious conduct. The amount was inadvertently shown as an unsecured loan. The counsel contended that the penalty was initiated for inaccurate particulars of income but was levied for concealment of income. The Departmental Representative supported the lower authorities' orders. The Tribunal noted that the revised return was filed before any detection by revenue authorities, and at that time, there was no provision for revising a belated return. It was acknowledged that the Act was subsequently amended to allow revision of belated returns. Citing legal precedents, the Tribunal emphasized that inadvertent errors do not warrant penalties. The conduct of the assessee was deemed non-contumacious, and technical breaches may not lead to penalties. Considering the above discussion and legal precedents, the Tribunal concluded that the assessee did not deserve the penalty under Section 271(1)(c) of the Act. The orders of the lower authorities were set aside, and the penalty was deleted. The Tribunal did not address the jurisdictional issue raised by the assessee as it was of academic interest only. Consequently, the appeal filed by the assessee was allowed, and the penalty was revoked. In summary, the Tribunal found that the penalty imposed on the assessee for filing a belated return and declaring Capital Gains was unwarranted due to the non-contumacious conduct and inadvertent error, leading to the deletion of the penalty under Section 271(1)(c) of the Income Tax Act, 1961.
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