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TMI Blog2020 (3) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and accordingly the same falls in the ambit of reasonable and bona fide explanations/ reasons for the default/ failure on the part of the assessee. Once the assessee has explained the reasons for wrong classification of the securities and the said explanation of the assessee is bona fide being inadvertent mistake on the part of the Tax Advisor then this case would not fall in clause B of Explanation 1 to Section 271(1)(C) of the Act. Thus no penalty shall be levied u/s 271(1)( c) of the Act in view of the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd vs CIT [ 2012 (9) TMI 775 - SUPREME COURT] - Decided in favour of assessee. - ITA No. 1326/JP/2019 - - - Dated:- 25-2-2020 - Shri Ramesh C.Sharma, AM And Shri Vijay Pal Rao, JM For the Assessee : Shri S.L.Poddar, Advocate For the Revenue : Shri K.C. Gupta, JCIT-DR ORDER PER VIJAY PAL RAO, JM This appeal by the assessee is directed against the order of ld. CIT(A) -2, Jaipur dated 29-11-2019 arising from the penalty order passed u/s 271(1)( c) of the Act for the Assessment Year 2015-16. The assessee has raised the following grounds. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consultant of the assessee. The assessee has duly disclosed the transactions of sale of shares/ securities and also offered Long Term Capital Gain to tax, though due to some confusion, the shares were classified as listed securities in the return of income instead of unlisted securities. Thus the ld.AR of the assessee submitted that it cannot be held that the assessee has either furnished inaccurate particulars of income or concealed the particulars of income when all the necessary particulars being the names of the securities as well as other details were furnished only because the shares sold by the assessee are classified as listed securities which would not amount to furnishing the inaccurate particulars of income or concealment of particulars of income. The ld.AR of the assessee relied on the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt Ltd. vs CIT , 348 ITR 306 (SC) and submitted that the Hon'ble Supreme Court has held that the mistake on the part of the Chartered Accountant in not detecting the mistake about the allowability of the provisions towards payment of Gratuity was a bona fide and inadvertent error and thereby the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Mak Data (P) Ltd vs CIT, 358 ITR 593 (SC) and submitted that surrender of income by the assessee only after the issuance of notices u/s 143(2) and 142(1) of the Act by the AO, would not be a voluntary disclosure and therefore, the assessee would not release from mischief of penalty proceedings u/s 271(1)( c) of the Act. Thus the ld. DR relied on the orders of the authorities below. 2.4 We have considered the rival submissions as well as the relevant materials available on record. There is no dispute that returned income was accepted by the AO while passing the scrutiny assessment u/s 143(3) of the Act except the fact that during the course of assessment proceeding the assessee had paid additional tax @ 10% on Long Term Capital Gain by admitting the fact that the shares sold by the assessee are unlisted and therefore, attracting the tax @ 20% instead of 10% as offered by the assessee in the return of income. Thus it is only a case of wrong classification of capital asset sold by the assessee yielding Long Term Capital Gain. The particulars as furnished by the assessee regarding the name of the scrip, proof of shares, sale consideration and indexed cost are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee are not in dispute. Therefore, the said classifications of the asset is nothing but a mistake occurred while filing the return of income by the Tax Consultant of the assessee and accordingly the same falls in the ambit of reasonable and bona fide explanations/ reasons for the default/ failure on the part of the assessee. Once the assessee has explained the reasons for wrong classification of the securities and the said explanation of the assessee is bona fide being inadvertent mistake on the part of the Tax Advisor then this case would not fall in clause B of Explanation 1 to Section 271(1) of the Act. Thus no penalty shall be levied u/s 271(1)( c) of the Act in view of the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd vs CIT (supra) wherein the Hon'ble Supreme Court has held as under:- 17. Having heard learned counsel for the parties, we are of the view that the facts of the case are rather peculiar and somewhat unique. The assessee is undoubtedly a reputed firm and has great expertise available with it. Notwithstanding this, it is possible that even the assessee could make a silly mistake and indeed this has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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