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TMI Blog2018 (10) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... to them within mandate of the 1961 Act. No bonafide of committing such glaring mistakes are brought on record and these bald pleas cannot be accepted. No hesitation in confirming the penalty levied by the AO u/s 271(1)(c) which was later confirmed by learned CIT(A). The assessee fails in this appeal. - Decided against assessee. - I.T.A. No.260/Mum/2017 - - - Dated:- 22-10-2018 - Shri Joginder Singh, Vice President And Shri Ramit Kochar, Accountant Member For the Assessee : Shri. Rajeev Khandelwal For the Revenue : Shri. Chaudhary Arun Kumar Singh ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No. 260/Mum/2017, is directed against appellate order dated 07.10.2016 passed by learned Commissioner of Income Tax (Appeals)-44, Mumbai (hereinafter called the CIT(A) ), for assessment year 2008-09, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 22.12.2010 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2008-09. 2. The grounds of appeal raised by the Assessee in the memo of appeal filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness income at normal rates of income-tax, clearly causing prejudice to Revenue by way of short payment of income-tax. While framing assessment, another peculiar fact was noted by the AO that the assessee treated short term capital gain on sale of shares to the tune of ₹ 16,24,981/- as an exempt long term capital gains by wrongly declaring holding period of shares, which was claimed as an exempt from income-tax within provisions of Section 10(38) of the 1961 Act. The said short term capital gains to the tune of ₹ 16,24,981/- was clearly taxable within provisions of Section 111A of the 1961 Act at concessional rate but the assessee declared it as an exempt long term capital gains by wrongly declaring holding period of shares and sought complete exemption from income-tax u/s 10(38) of the 1961 Act, in the return of income filed with the Revenue which clearly caused prejudice to Revenue as no taxes stood paid to Revenue on these gains. Thus, the assessee who was required to pay income-tax on short term capital gains earned on sale of shares to the tune of ₹ 16,24,981/- u/s 111A of the 1961 Act did not paid any income-tax by declaring the same as an exempt long t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 12,83,843/- on wrong trades executed on behalf of the client which ought to have been offered to tax as business income and taxes at normal rates should have been paid but the chartered accountant while filing return of income claimed it as short term capital gains and concessional income-tax was paid as against normal income-tax payable on business income. It was admitted that it definitely caused prejudice to Revenue but it was mistake of the Chartered Accountant and the assessee should not be punished for the same. The Ld. Counsel for the assessee reiterated the submissions as were made before the authorities below. The learned counsel for the assessee relied upon decision of Hon ble Supreme Court in the case of Price Waterhouse Coopers Private Limited v. CIT reported in (2012) 348 ITR 306(SC) to contend that no penalty is exigible on the factual matrix of the case. The learned DR strongly submitted that penalty levied u/s 271(1)(c) be confirmed. 5. We have considered rival contentions and perused the material on record including orders of authorities below and cited case laws. The assessee is an individual who has undertaken transactions of sale and purchase of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly caused prejudice to Revenue by way of no payment of income-tax on these short term capital gains shown as an exempt long term capital gains on sale of shares. Thus, the assessee who was required to pay income-tax on short term capital gains earned on sale of shares to the tune of ₹ 16,24,981/- u/s 111A of the 1961 Act did not pay any income-tax by wrongly declaring the same as an exempt long term capital gains which were claimed as an exempt from income-tax u/s 10(38) of the 1961 Act, causing prejudice to Revenue by depriving Revenue of legitimate income-tax due to Revenue. This led to levy of penalty u/s 271(1)(c) by the AO which was later confirmed by learned CIT(A). The learned counsel of assessee admitted that these wrong declarations were in-fact made in the return of income filed with Revenue but it was due to mistake committed by the Chartered Accountant who filed return of income and the assessee cannot be penalised for the same. The learned counsel for the assessee has made this bald statement before us but no details of the chartered accountant who made these mistakes and under what circumstances these glaring mistakes were committed by chartered accountant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Notwithstanding this, it is possible that even the assessee could make a silly mistake and, indeed this has been acknowledged both by the Tribunal as well as by the High Court 18. The fact that the Tax Audit Report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable under section 40A(7) of the Act indicates that the assessee made a computation error in its return of income. Apart from the fact that the assessee did not notice the error, it was not even noticed even by the Assessing Officer who framed the assessment order. In that sense, even the Assessing Officer seems to have made a mistake in overlooking the contents of the Tax Audit Report. 19. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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