TaxTMI 
TaxTMI 
2020 (3) TMI 174
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....n confirming the action of the AO in imposing the penalty u/s 271(1)( c) of the I.T. Act, 1961 which was levied by the AO without striking of the irrelevant portion of the printed show cause notice dated 3-11-2017 vis. ''furnished inaccurate particulars of income'' or concealed particulars of such income'' bad in law.'' 2. Under the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming the penalty of Rs. 23,48,470/- imposed by AO u/s 271(1)( c) of the Act is against the principles of judicial consistency and therefore, bad in law.'' 2.1 The assessee is an individual and filed her return of income on 21-08-2015 declaring total income of Rs. 2,23,54,740/- inclusive of Long Term Capital Gain arising ....
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....and bona fide mistake on the part of the Tax 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....
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....ime of assessment proceeding or at the time of issuing show cause notice as well as at the time of passing the penalty order which is the incorrect charge as the assessee has disclosed the transactions in the return of income. Therefore, the assessee does not fall in the ambit of concealment of income. Thus the ld.AR of the assessee submitted that when the AO was not sure about the charge at the time of initiation of the penalty proceedings and finally levied the penalty on wrong default then the order passed by the AO is not sustainable in law and liable to be quashed. In support of this contentions the ld.AR of the assessee relied on the decision of Hon'ble Karnataka High Court in the case of CIT vs Manjunath Cotton and Ginning Factor....
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....g 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 duly disclosed in the return of income and accepted by the AO as correct. The AO initiated the penalty proceedings u/s 271(1)(c) of the Act only in respect of additional tax paid by the assessee during the course of assessment proceeding based on revised computation of income and correctly classifying the shares as unlisted securities. Therefore, in the return of income, the assessee has wrongly shown the sh....
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....of misclassification of the capital asset sold by the assessee which has resulted into short payment of tax. Therefore, in the facts and circumstances of the case, we find that it is a case of inadvertent and bona fide mistake of wrong classification of the securities yielding Long Term Capital Gain and consequently the assessee had paid the tax @ 10% instead of 20%. Except the classification of securities, all other necessary and relevant particulars/ details furnished by the assessee 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....
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....e 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 all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a ca....