Appeal granted, penalty under Income Tax Act canceled due to inadvertent omission by technical person.

The Tribunal allowed the appeal, canceling the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act. The Tribunal found the assessee, a technical person, inadvertently omitted short term capital gains from the return, citing lack of awareness on tax implications. It noted the assessee's compliance post-detection and inconsistency in the AO's satisfaction between assessment and penalty stages. Emphasizing the inadvertent nature of the omission and legal precedents, the Tribunal held the penalty order unsustainable, setting it aside.

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Issues:
Imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 on short term capital gains not included in the return of income.

Analysis:

1. Imposition of Penalty by Assessing Officer (AO):
The AO imposed a penalty under section 271(1)(c) of the Act on the assessee for not including short term capital gains in the return of income. The AO alleged that the assessee furnished inaccurate particulars of income to conceal the actual income. The AO rejected the assessee's plea of inadvertent omission and imposed a penalty of Rs. 22,08,500 along with interest income that was also not disclosed.

2. Challenge before CIT(A):
The assessee challenged the penalty order before the CIT(A) reiterating that the short term capital gains were offered for taxation before detection by the AO. The CIT(A) upheld the penalty citing the difference between the return filed and the assessed income, placing the onus on the assessee to rebut the inference of concealment.

3. Appeal before Tribunal:
The assessee appealed before the Tribunal, arguing that the inadvertent error should not attract penalty provisions. The legal plea was raised regarding the inconsistency in the nature of default specified in the penalty notice and the satisfaction formed by the AO during assessment.

4. Tribunal's Decision:
The Tribunal considered the circumstances and conduct of the assessee. It noted that the assessee, being a technical person, may not have been aware of the tax implications regarding the sale of agricultural land. The Tribunal found that the onus of bonafide was broadly discharged by the assessee. Additionally, it highlighted the inconsistency in the satisfaction of the AO between the assessment and penalty stages. Citing legal precedents, the Tribunal held that the penalty order was not sustainable in law and set it aside, canceling the penalty imposed by the AO.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the inadvertent nature of the omission, the assessee's compliance post-detection, and the ambiguity in the penalty imposition process.

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