Facts of the case: the assessee company had e-filed its return of income for A.Y 2013-14 on 27.09.2013 and declared its total income at Rs.80,19,650.
Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act.
During the assessment proceedings, Assessing officer observed that assessee disclosed the deduction pertaining to ‘building premises’ under the head ‘block of assets’.
On inquiry, assesse said that there are certain properties which were sold during the year under consideration and realized the omission in not offering the LTCG on the sale.
The aforesaid sale had worked out its income under the said head and offered the same for tax.
Issue involved: The A.O called upon the assessee to explain as to why it had not offered the income from the sale under the head income LTCG and initiated penalty against the assessee under section 271(1)(c) of the Act.
Points to be considered:
- The Tribunal observed that when the assessee had disclosed the deduction related to sale from the ‘block of assets’ in its balance sheet.
- The failure to offer LTCG on the sale had mistakenly remained omitted to be shown in the return of income under consideration.
- Hence, there is substantial force in its claim.
Further, As per section 271(1)(c) of the Income Tax Act, 1961, for imposing penalty there should be a ground of either concealment of income or furnish inaccurate particulars.
In the above case, assessee had committed an inadvertent and a bonafide error and there was no intention conceal its income or furnish inaccurate particulars.
Conclusion: While considering all the facts of the case, Tribunal said that there is a strong conviction that imposition of penalty under Sec. 271(1)(c) would be unwarranted.
And the penalty imposed by the A.O under Sec. 271(1)(c) was deleted by Tribunal (Mumbai bench of the Income Tax Appellate Tribunal (ITAT)).