TaxTMI 
TaxTMI 
2015 (4) TMI 790
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....of income of Rs. 9,23,180/-, i.e., (Rs.1 ,04,72,423/- minus Rs. 95,49,243/-) and therefore the Assessing Officer was not having jurisdiction to impose penalty as held by Honorable Delhi High Court in the case of Madhushree Gupta 317 ITR 107. 2. Without prejudice to the above ground, the learned CIT(Appeals) erred in upholding penalty u/s 271(1)(c) of the Act amounting to RS.5,49,601/-, without appreciating the facts of the case in proper perspective. The learned CIT(Appeals) failed to appreciate that the appellant made simply calculation error with respect to the computation of "Short Term Capital Gain" on sale of shares due to change in the provision of law w.e.f. 1st October, 2004 relevant to the Assessment year under appeal. That the learned CIT(Appeals) failed to appreciate that sale of personal effects like furniture is not taxable under the Income Tax Act and due to ignorance of law, the appellant offered the same for tax and both the lower authorities also considered the said exempted income for the purpose of calculation of penalty. 3. That the Orders of the Assessing Officer & CIT(Appeals) are not based on the facts of the case & as per law and hence penalty sustained by....
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.... placed reliance on the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs CIT (2012) 348 ITR 306 (SC), the decision of Hon'ble Jurisdictional High Court of Delhi dated 7.10.2013 in ITA 481/2013 CIT vs Arvind Nagpal and decision of ITAT Delhi Á' Bench dated 31.8.2012 in ITA No. 297/D/2012 for AY 2006-07. Ld. counsel of the assessee submitted that the only effective issue in the present appeal is against the levy of penalty of Rs. 5,49,601 u/s 271(1)(c) of the Act as imposed by the AO on the ground that the assessee furnished inaccurate particulars of its income inasmuch as income originally offered in the return was to the tune of Rs. 95,49,243/- as against the assessed income of Rs. 1,04,72,423. Ld. counsel further submitted that the AO computed the difference between the tax on returned income and tax on assessed income and penalty was accordingly imposed which was confirmed by the CIT(A) by passing the impugned order. Ld. Counsel vehemently contended that the assessee, an individual, who was not assisted initially by any professional advice filed a revised return correcting the tax payable on short term capital gain on shares, reclassif....
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....( c) of the Act to the satisfaction of the AO. Ld. DR further submitted that the CIT(A) was quite justified in holding that the assessee has merely claimed clerical/accounting/arithmetical mistake and failed to provide any explanation to substantiate the same, therefore, in absence of any satisfactory and bonafide explanation, the AO had a point to impose penalty for furnishing of inaccurate particulars of income. 8. On careful consideration of above rival submissions of both the parties, at the outset, we respectfully take cognizance of the decision of Hon'ble Jurisdictional High Court of Delhi in the case of CIT vs Arvind Nagpal(supra) wherein their lordships referring to the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs CIT (supra) have held thus:- "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 t....
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....10% tax rate of Rs. 83,41,776 and long term capital gain on shares at Rs. 43,75,765/- and benefit of indexation in terms of long term capital gain on the plot from the date on which assessee held it without sale of furniture and bank interest, dividend etc. being meted out at different amount and different treatment. 11. From paper book page no. 9 to 13, we observe that the assessee during penalty proceedings submitted reply dated 19.3.08 and submitted a detailed explanation to the situation of inadvertent mistake cropping in the original return of income and its rectification by way of filing a revised return. Ld. Counsel of the assessee has drawn our attention towards para 5 of reply dated 19.3.08 (supra) and submitted that by no stretch of imagination it can be held that explanation offered by the assessee was not bonafide and in this situation, the assessee cannot be held guilty of filing of inaccurate particulars of its income or concealment of income. 12. At this juncture, respectfully following the decision of Hon'ble High Court in the case of Arvind Nagpal (supra), we are inclined to hold that in the present case, the assessee filed its return of income as an individual w....