TaxTMI 
TaxTMI 
2020 (11) TMI 341
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....ds of appeal:- "1. The Commissioner of Income tax (Appeals) erred in confirming the penalty levied u/s.271(1)(c) of the Act by the Assessing Officer. 2. The Commissioner of Income tax (Appeals) ought to have appreciated that omission of inclusion of capital gain on transfer of shares that too arising out of a book adjustment was purely inadvertent and accidental and not deliberate. 3. The Commissioner of Income tax (Appeals) ought to have appreciated that appellant had no intention and no incentive to conceal the capital gain on transfer of shares inasmuch as the appellant had huge carried forward loss and consequently there was no tax impact. 4. The Commissioner of Income tax (Appeals) ought to have considered from the behaviour....
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....of sale of Rs. 27,03,125/-. Subsequently, penalty proceedings u/s.271(1)(c) of the Act was initiated and called upon the assessee to explain as to why penalty shall not be levied for concealment of income. In response, the assessee contended that it has neither concealed particulars of income nor furnished inaccurate particulars of income, but omitted to include long term capital gain in the return of income for the year by inadvertent mistake and hence the same cannot be considered as concealment of income to levy penalty u/s. 271(1)(c) of the Act. The Assessing Officer was not convinced with the explanation of the assessee and according to him, the assessee has concealed the particulars of income in respect of long term capital gain deriv....
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....ther the same has resulted into long term capital gain. Although the assessee is aware of transfer of shares, but failed to report the said transaction in the return of income filed for the relevant year and hence the arguments of the assessee that it had inadvertently omitted to include the long term capital gain derived from transfer of shares cannot be accepted. The learned CIT(A) has also negated another arguments taken by the assessee that when there is no demand of tax consequent to determination of capital gains after adjustment of carried forward loss, penalty u/s.271(1)(c) of the Act cannot be imposed by holding that even if the returned income is in loss, the penalty for concealment of income can be levied and this was supported b....
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....nceal the capital gains inasmuch as the assessee had huge carried forward loss and consequently there was no tax impact, even if the capital gain is reported on transfer of shares. The learned A.R further submitted that the learned CIT(A) ought to have considered the behavior and conduct of the assessee during and after the assessment proceedings that omission was purely inadvertent and not deliberate or by neglect. 6. The learned DR, on the other hand, supporting the order of the learned CIT(A) submitted that mens rea is not essential for civil liability and further penalty proceedings u/s.271(1)(c) of the Act is civil liability and the element of wilful concealment is not required to be looked into for levy of penalty. He further argued ....
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....s investments in shares in pursuant to the directions of the Hon'ble High Court of Madras for amalgamation of M/s. iTheories Business Factory India Pvt. Ltd., with the assessee company to settle the outstanding dues payable to Mr. Arif B.Rehman for Rs. 50,94,386/-. The said transaction is a book adjustment without there being any monetary consideration for transfer of equity shares. From the above, one can infer that explanation furnished by the assessee that by inadvertent mistake and human error, the capital gain derived from transfer of equity shares has not been reported in the return of income filed for the relevant year appears to be bonafide. Had it been the case of the Assessing Officer that the assessee has received considerati....