2012 (8) TMI 338

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....ealment of income with respect to loss of Rs.27,38,705 to be ignored u/s.94(7) of the I.T.Act relating to exempt dividend received having failed to appreciate that full disclosure was made during assessment proceedings and it was a bonafide mistake which was suo moto rectified by your appellant." 2. The relevant facts giving rise to this appeal are that assessee filed the return of income declaring total income at Rs.Nil. During the course of assessment proceedings, assessee was asked to file the details of loss, if any, arising on account of purchase and sale of securities or unit, referred to in section 94(7) and 94(8) of the Act. In response thereto, assessee vide letter dated 1.10.2009 submitted that while filing of the return of inc....

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....dingly, AO levied penalty of Rs.2,73,870 being 100% of tax sought to be evaded on Rs.27,38,705. Being aggrieved, assessee filed appeal before the first appellate authority. 3. On behalf of assessee, it was contended that assessee promptly and in good faith offered the said amount of dividend stripping of Rs.27,38,705 to tax on detecting the said error. There was no deliberate act on the part of the assessee to furnish inaccurate particulars of income. However, ld CIT(A) did not accept the said contention of assessee and stated that assessee filed the loss only after issue of notice by the AO i.e. after two years of filing of return of income and same cannot be treated as filed suo moto by the assessee. He has stated that if the intention....

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....e of loss u/s.94(7) of the Act at Rs.27,38,705. Hence, assessee is in appeal before the Tribunal. 4. During the course of hearing, ld A.R. reiterated the facts as stated before the authorities below. He further submitted that there is no intention of the assessee to evade tax as returned income was Nil and assessed income even after making disallowance of Rs.27,38,705 on account of dividend stripping as per section 94(7) of the Act is Nil. He submitted that there was a bonafide mistake on the part of the assessee as there is no tax benefit to the assessee. Ld A.R. referred to the decision of ITAT Delhi in the case of Shri Maxwell Pereira Kamath vs ACIT (I.T.A. No.2739/Del/2011, dated 23.9.2011 and submitted that in that case identical fa....

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....nation for the said lapse. Ld A.R. submitted that if there is a mistake bonafide inadvertently, the levy of penalty should be deleted. 5. On the other hand, ld D.R. supported the orders of authorities below. He submitted that assessee offered the said loss on account of dividend stripping when a specific query was made by the AO during the course of assessment proceedings. Therefore, it cannot be considered as voluntary disclosure by the assessee. Ld D.R. relying on the decision of Hon'ble Delhi High Court in the case of Commissioner of Income-tax v. Zoom Communication P. Ltd., 327 ITR 510(Del) submitted that only 3% of the cases are taken up for scrutiny and the assessee had not been taken up scrutiny, the income chargeable to tax had e....