Maxwell Pereira Kamath, Gurgaon v. ACIT, New Delhi

ITA 2739/DEL/2011 | 2006-2007
Pronouncement Date: 23-09-2011 | Result: Allowed

Appeal Details

RSA Number 273920114 RSA 2011
Assessee PAN AAJPP3937E
Bench Delhi
Appeal Number ITA 2739/DEL/2011
Duration Of Justice 3 month(s) 27 day(s)
Appellant Maxwell Pereira Kamath, Gurgaon
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 23-09-2011
Date Of Final Hearing 04-08-2011
Next Hearing Date 04-08-2011
Assessment Year 2006-2007
Appeal Filed On 27-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH E DELHI ] BEFORE SHRI RAJPAL YADAV JM AND SHRI K. D. RAN JAN AM I. T. APPEAL NO. 2739 (DEL) OF 2011. ASSESSMENT YEAR : 2006-07. SHRI MAXWELL PEREIRA KAMATH ASSTT. COMMISS IONER OF INCOME-TAX 3725 SECTOR 23 VS. C I R C L E : 41 (1) G U R G A O N [HARYANA]. N E W D E L H I. PAN / GIR NO. AAJ PP 3937 E. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI K. SAMPATH ADV.; DEPARTMENT BY : SHRI R. S. NEGI SR. D. R. O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 06-07 ARISES OUT OF THE ORDER OF THE LD. CIT (APPEALS)XXVII NEW DELHI. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO CONF IRMING THE PENALTY OF RS.48 499/- UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 [HERE INAFTER REFERRED TO AS THE ACT]. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE FILE D RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 DECLARING INCOME OF RS.27 61 760/-. THE CASE WAS SE LECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AT AN INCOME OF RS.3 1 44 188/-. WHILE COMPLETING ASSESSMENT THE ASSESSING OFFICER MADE ADDITION OF RS.2 82 428/ - COMPRISED OF INCOME FROM HOUSE PROPERTY AT RS.23 752/-; INCOME FROM BUSINESS RS.1 418/-; SHORT TERM CAPITAL GAINS RS.3 55 290/- AND INCOME FROM OTHER SOURCES RS.1 968/-. THE ASSESSING OFFICE R INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 2 I. T. APPEAL NO. 2739 (DEL) OF 2011. 3. DURING THE COURSE OF PENALTY PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT ASSESSEE HAD DECLARED A SUM OF RS.23 09 770/- AS SHORT TERM CAPITAL GAINS IN THE RETURN OF INCOME BUT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE REAL IZED THAT THE SHORT TERM CAPITAL GAIN HAD BEEN WRONGLY CALCULATED DUE TO MISUNDERSTANDING THE EFFE CT OF SWITCH IN AND SWITCH OUT SCHEME OF THE MUTUAL FUND. THE ASSESSEE FILED REVISED COMPUTATIO N OF INCOME DECLARING SHORT TERM CAPITAL GAIN OF RS.26 61 593/-. IT WAS SUBMITTED THAT THE MISTA KE COMMITTED WAS DUE TO CALCULATION MISTAKE AND THERE WAS NO INTENTION OF THE ASSESSEE TO CONCE AL THE INCOME. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT I T WAS THE DUTY OF THE ASSESSEE TO FURNISH CORRECT PARTICULARS OF HIS TAXABLE INCOME AT THE TIME OF FU RNISHING OF HIS ORIGINAL RETURN OF INCOME. THE LAW FURTHER ALLOWS OPPORTUNITY OF FURNISHING A REVI SED RETURN AS PER PROVISIONS OF SECTION 139(5) OF THE ACT IF AT ALL THERE WAS ANY OMISSION WHILE FURNISHING THE ORIGINAL RETURN. BUT THE ASSESSEE HAD NOT FILED REVISED RETURN WITHIN THE TIME ALLOWE D UNDER SECTION 139(5) OF THE ACT. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE W AS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.3 31 20 938/- IN VARIOUS MUTUAL FUNDS DURING THE YEAR. WHILE PREPARING A RESPONSE TO THE QUERY THE ASSESSEE HAD DISCLOSED SHORT TERM CAPITAL GAINS ON REDEMPTION / SWITCHING IN AND OUT IN MUTUAL FUNDS. THUS THE SUPPRESSION OF INCOME WOULD HAVE COME TO THE KNOWLEDGE OF THE DEPARTMENT AND THEREFORE THE ASSESSEE THOUGHT IT PRUDENT TO FILE REVISED COMPUTATION OF INCOME. HE FURTHER NOTED THAT AFTER FILING OF REVISED STATE MENT OF INCOME THE AO RAISED A FURTHER QUERY AS TO WHY THE PROVISIONS OF SECTION 94(7) OF THE ACT S HOULD NOT BE APPLIED IN RELATION TO SHORT TERM CAPITAL LOSSES SUFFERED ON ACCOUNT OF DIVIDEND STRI PPING. THE ASSESSEE FILED A SECOND REVISED COMPUTATION OF INCOME ON 12/11/2008 FURTHER ENHANCI NG THE SHORT TERM CAPITAL GAIN OF RS.31 32 880/-. THE ASSESSING OFFICER THUS CAME TO THE CONCLUSION THAT ON EACH AND EVERY TIME WHEN ANY CLARIFICATION WAS SOUGHT THE ASSESSEE FILE D REVISED COMPUTATION OF INCOME. THEREFORE THERE WAS AN ATTEMPT ON THE PART OF THE ASSESSEE BO TH TO CONCEAL AND FURNISH INACCURATE PARTICULARS OF INCOME. HAD THE CASE NOT BEEN TAKEN UNDER SCRUT INY THE ASSESSEE WOULD NOT HAVE COME FORWARD TO FILE THE REVISED COMPUTATION OF INCOME. HE HAD FURTHER OBSERVED THAT THERE WAS NO SANCTITY ATTACHED TO A REVISED STATEMENT OF INCOME BECAUSE THE ONLY REVISION OF INCOME THAT WAS ALLOWED UNDER THE INCOME TAX ACT WAS BY WAY OF FIL ING OF REVISED INCOME UNDER SECTION 139(5) OF THE ACT. SINCE ASSESSEE HAD NOT FILED REVISED R ETURN WITHIN THE STIPULATED TIME OF 31 ST MARCH 2008 THE BENEFIT OF SECTION 139(5) COULD NOT BE GI VEN. THE ASSESSING OFFICER RELYING ON VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. 3 I. T. APPEAL NO. 2739 (DEL) OF 2011. DHARMENDRA TEXTILE PROCESSORS & OTHERS [2008] 306 I TR 277 (SC) IMPOSED THE PENALTY UNDER SECTION 271(1)(C) OF RS.48 490/-. 4. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED TH AT THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER WERE NOT RELEVANT TO THE FACTS OF THE ASSESSEES CASE AS IN THOSE CASES THE REVISED RETURNS WERE FILED AFTER DETECTION OF CONCEALMENT W HILE IN THE CASE OF THE ASSESSEE THE INCOME HAS BEEN OFFERED FOR TAX BEFORE ANY DETECTION BY THE AO . THE LD. AR OF THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CHANDRA PAL BAGGA VS. ITAT 261 ITR 67 (RAJ.) WHEREIN IT HAS BEEN HELD THAT IF THE ASSESSEE HAD CLAIMED ANY EXEMPTION AFTER DISCLOSING THE RELEVANT FACTS AND UNDER IGNORANCE O F PROVISIONS OF THE ACT HAS NOT OFFERED THAT AMOUNT FOR TAX IN SUCH CASES PENALTY SHOULD NOT BE IMPOSED. IN SUCH CASES IT IS THE DUTY OF THE AO TO ASK FOR FURTHER DETAILS AND TAX THE INCOME IF IT IS LIABLE TO TAX. REFERRING TO THE DECISION O F HONBLE SUPREME COURT IN THE CASE DHARMENDRA TEXTI LE PROCESSORS & OTHERS (SUPRA) THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE OBSERVATIONS IN THIS DECISION REEMPHASIZES THE SHIFT OF BURDEN OF PROOF AS BROUGHT ABOUT BY EXPLANATION 1 OF SECTI ON 2712(1)(C). ON NEED FOR THE TAX AUTHORITIES TO ESTABLISH MENS REA BEFORE PENALTY CAN BE IMPOSED WERE CONTRARY TO THIS SCHOOL OF THOUGHT AND TO THAT EXTENT THE LARGER BENCH OVER-RULED DILIP N. SHROFFS CASE. HOWEVER EVEN WHEN LIABILITY UNDER SECTION 271(1)(C) IS VIEWED AS A CIVIL LIABIL ITY WHILE THE ONUS IS CERTAINLY NOT ON THE TAX AUTHORITY TO ESTABLISH MENS REA OF THE ASSESSEE TH E EXPLANATION OF THE ASSESSEE IS STILL TO BE EXAMINED BY THE ADJUDICATING AUTHORITY ON ITS MERIT S. RELIANCE WAS PLACED ON THE DECISION OF ITAT DELHI IN THE CASE OF ACIT VS. PREM CHAND GARG 31 SOT 97 (DEL) [TM] WHEREIN IT HAS BEEN HELD THAT WHERE BY THE TIME THE AO TAKES UP IS SUE AND COME ACROSS INFORMATION IN HIS POSSESSION IF THE ASSESSEE MAKES UP DEFICIENCY AND OFFERS INCOME OR FURNISHES ACCURATE PARTICULARS THEREOF HE CANNOT BE HELD GUILTY OF CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS MADE BEFORE HIM OBSERVED THAT THE FACTS OF THE ASSESSEES CASE WERE DISTINGUISHABLE FROM THE CASE LAWS PUT IN BY THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE HAS AT TEMPTED TO CONCEAL AND FURNISH INACCURATE PARTICULARS OF INCOME WHILE FURNISHING THE ORIGINAL RETURN. IF THE CASE WAS NOT TAKEN UP FOR SCRUTINY AND INVESTIGATION THE ASSESSEE WOULD NOT H AVE COME OUT WITH REVISED COMPUTATION. THE LD. CIT (A ACCORDINGLY UPHELD THE PENALTY IMPOSED B Y THE ASSESSING OFFICER. 4 I. T. APPEAL NO. 2739 (DEL) OF 2011. 5. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE INVESTED MONEY IN MUTUAL FUNDS. THERE WAS AUTOMATIC SWITCH IN AND SWITCH OU T SCHEME INVOLVED IN MUTUAL FUND TRANSACTIONS. EACH OF THEM IS TAX INCIDENCE. THE ASSESSEE WHILE PREPARING THE REPLY DETECTED THE ERROR AND CORRECTED THE INCOME VOLUNTARILY. NO NOT ICE WAS ISSUED BY THE ASSESSING OFFICER CALLING FOR THE EXPLANATION. THE ASSESSING OFFICER RAISED QUERY ON 12 TH NOV. 2008 FOR THE FIRST TIME. BY THIS TIME THE TIME FOR FILING REVISED RETURN UNDER SECTION 139(5) HAD EXPIRED AND THEREFORE BENEFIT OF SECTION 139(5) OF THE ACT WAS NOT AVAILA BLE TO THE ASSESSEE. THE ASSESSEE COMMITTED MISTAKE IN COMPUTATION OF INCOME AS IT INVOLVED COM PLEX EXERCISE. IT WAS ALSO SUBMITTED THAT THE CONCEPT OF SWITCH IN AND SWITCH OUT PROCEDURE IS NO T EASY TO UNDERSTAND AND DEFINITELY IT WAS BEYOND THE UNDERSTANDING OF A LAYMAN. THE ASSESSEE THOUGH OCCUPIED IMPORTANT POSITION IN POLICE DEPARTMENT BUT HE WAS LAYMAN SO FAR AS FINAN CE MATTERS ARE CONCERNED. THE EXERCISE OF COMPUTATION OF INCOME IN SWITCH IN AND SWITCH OUT S CHEME OF MUTUAL FUNDS IS DONE BY BROKER. THUS THE CALCULATION ERRORS COMMITTED BY THE ASSESS EE IN COMPUTATION OF INCOME CANNOT BE TREATED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. ALL MATERIAL FACTS WERE AVAILABLE ON RECORD. THE REPLY SUBMITTED BY THE ASSESSEE HAD NO T BEEN FOUND TO BE FALSE. THEREFORE THE EXPLANATION OFFERED BY THE ASSESSEE IS BONAFIDE. H E PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE INDUSTRIES 32 2 ITR 158 (SC) AND THE DECISIONS IN THE CASES OF PREM CHAND GARG (SUPRA) AND SHRI CHANDRA P AL BAGGA (SUPRA). ON THE OTHER HAND THE LD. SR. DR SUBMITTED THAT WHEN ASSESSEE WAS CONFRON TED HE FILED REVISED COMPUTATION NOT ONCE BUT TWO TIMES. THEREFORE THE ASSESSEE HAD CONCEAL ED THE INCOME. ACCORDINGLY PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS EXIGIBLE. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAD EARNED INCOME FROM MUTUAL FUNDS WHEREIN AUTOMATIC SWITCH IN AND SWITCH OUT SCHEME WAS IN OP ERATION. WHEN THE AO HAS ASKED THE SOURCE OF INVESTMENTS THE ASSESSEE FILED REVISED COMPUTAT ION DETECTING CERTAIN INCOME TO BE OMITTED TO BE DECLARED IN THE ORIGINAL RETURN OF INCOME. THE AO HAD NOT ISSUED NOTICE POINTING OUT THAT INCORRECT COMPUTATION OF SHORT TERM CAPITAL GAINS W AS DECLARED BY THE ASSESSEE. THE CHARTERED ACCOUNTANT OF THE ASSESSEE VIDE LETTER DATED 26 TH OCTOBER 2008 HAD STATED THAT SHORT TERM CAPITAL 5 I. T. APPEAL NO. 2739 (DEL) OF 2011. GAIN WAS DECLARED AT RS.23 09 770/- ON MUTUAL FUND INVESTMENTS IGNORING OF SWITCH IN AND SWITCH OUT OF MUTUAL FUND SCHEME THE ACTUAL INCOME AFTER T AKING INTO ACCOUNT SWITCH IN AND SWITCH OUT SCHEME THE SHORT TERM CAPITAL GAINS CAME TO RS.26 1 7 418/- WHICH WAS OFFERED FOR TAX. THE ASSESSEE HAD INVESTED HUGE AMOUNT IN MUTUAL FUNDS A ND INCOME THEREFROM HAS BEEN OFFERED IN THE RETURN OF INCOME AT RS 23 09 770/-. 8. IN CIT VS. RELIANCE PETRO PRODUCTS P. LTD. 230 CTR 320 (SC) HONBLE SUPREME COURT HAS HELD THAT A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WOULD SUGGEST THAT IN ORDER TO BE COVERED THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. AS PER LAW LEXICON THE MEANING OF THE WORD PARTICULAR IS A DETAIL OR DETAILS IN PLURAL SENSE; THE DETAILS OF A CLAIM OR A SEPARATE ITEM OF AN ACCOUNT. THEREFORE THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN TH E RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS ONLY AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED FOUND TO BE FACTUALLY INCORRECT. HENCE AT LEAST PRIMA FACIE THE ASSESS EE CANNOT BE HELD OF A GUILTY OF FURNISHING INACCURATE PARTICULARS. THE WORDS ARE PLAIN AND SI MPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THEREFORE IT I S OBVIOUS THAT IT MUST BE SHOWN THAT CONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE PENALTY I S IMPOSED. THERE CAN BE NO DISPUTE THAT EVERY-THING WOULD DEPEND UPON THE RETURN FILED BECA USE THAT IS ONLY DOCUMENT WHERE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. THE READING WORDS INACCURATE AND PARTICULARS IN CONJECTION THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN WHICH ARE NOT ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS THERE BEING NO FINDING THAT ANY DETAILS S UPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. THERE WOULD BE NO QUESTION OF INVITING PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH CLAIM 6 I. T. APPEAL NO. 2739 (DEL) OF 2011. MADE IN THE RETURN CANNOT AMOUNT TO INACCURATE PART ICULARS. MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF INTEREST EXPENDITURE WHICH HAS NOT BE EN ACCEPTED BY THE REVENUE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT ATTRACTED. MER E MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INA CCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 9. IN CIT VS. ZOOM COMMUNICATION P. LTD. 327 ITR 51 0 (DEL.) HONBLE DELHI HIGH COURT HAS HELD THAT SO LONG AS THE ASSESSEE HAS NOT CONCE ALED ANY MATERIAL FACTS OR THE FACTUAL INFORMATION GIVEN BY HIM HAS NOT BEEN FOUND TO BE I NCORRECT HE WILL NOT BE LIABLE TO IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TA X ACT 1961 EVEN IF THE CLAIM MADE BY HIM IS UN-SUSTAINABLE IN LAW PROVIDED THAT HE EITHER SUBST ANTIATES THE EXPLANATION OFFERED BY HIM OR THE EXPLANATION EVEN IF NOT SUBSTANTIATED IS FOUND TO BE BONAFIDE. IF THE EXPLANATION IS NEITHER SUBSTANTIATED NOR SHOWN TO BE BONAFIDE EXPLANATION (1) TO SECTION 271(1)(C) WOULD COME INTO PLAY AND THE ASSESSEE WILL BE LIABLE TO FRESH PENAL TY. 10. IN THE CASE OF PREM CHAND GARG (SUPRA) IT HAS B EEN HELD THAT WHERE BY THE TIME ASSESSING OFFICER TAKES UP ISSUE AND COMES ACROSS INFORMATION IN HIS POSSESSION IF ASSESSEE MAKES UP DEFICIENCY AND OFFERS INCOME OR FURNISHES ACCURATE PARTICULARS THEREOF HE CANNOT BE HELD GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. IN THE CASE OF ASSESSEE THE ASSESSING OFFICER HAD NOT ISSUED SHOW CAUSE NOTICE DETECTING CONCEALMENT OF INCOME AND HENCE THE INCOME OFFERED BY THE ASSESSEE CANNO T BE TREATED AS CONCEALED INCOME. 11. NOW LET US EXAMINE THE FACTS OF PRESENT CASE IN THE LIGHT OF ABOVE JUDICIAL PRONOUNCEMENT. THE ASSESSEE HAD EXPLAINED THE COMPU TATION OF INCOME AFTER CONSIDERING SWITCH IN AND SWITCH OUT SCHEME AS UNDER: RECONCILIATION OF SHORT TERM CAPITAL GAIN AMOUNT [RS.] SHORT TERM CAPITAL GAIN AS PER ANNEXURE ENCLOSED WI TH RETURN : 23 09 716.51 7 I. T. APPEAL NO. 2739 (DEL) OF 2011. ADD : SECURITY TRANSACTION TAX REDUCE FROM CAPITAL GAIN 52 656.67 ADD : FRANKLIN INDIA PRIMA FUND 1 557.64 HSBC EQUITY FUND 19 254.25 KOTAK MID CAP FUND 145.98 MAGNUM SECTOR 2 03 257.33 PRINCIPAL FOCUSED ADVANTAGE FUND 489.0 0 TEMPLETON FLEXI CAP 40 314.47 ABN AMRO OPPORTUNITY FUND 17 603.92 RELIANCE GROWTH FUND 88 720.50 TEMPLETON FLEXI FUND 32 7.91 TEMPLETON FLEXI CAP LOSS [8 226.12] FRANKLIN INDIA PRIMA FUND LOSS [0.78] SUNDARAM SMILE DIVIDEND FUND LOSS [1 08 399.24] 3 07 701.53 AMOUNT AS PER CALCULATION SHEET FOR STCG FILED ON 2 6/10/2008 26 17 418.04 ADD : HSBC EQUITY FUND 44 175.15 [LOSS DISALLOWED U/S. 94(7) OF I. T. ACT] 12. WE HAVE GONE THROUGH THE RECONCILIATION OF SHOR T TERM CAPITAL GAINS REPRODUCED AS ABOVE. THERE ARE 9 PROFIT AND THREE LOSS FIGURES THAT WERE NOT TAKEN INTO ACCOUNT IN ORIGINAL RETURN. THE ASSESSEE HAS PAID SECURITY TRANSACTION TAX OF RS.52 656.67 WHICH WAS ALSO TO BE TAKEN INTO ACCOUNT AT THE TIME OF FILING OF THE ORIGINAL RETUR N OF INCOME. THE MISTAKE COMMUTATION OF PROFIT HAS BEEN OCCURRED BECAUSE OF SWITCH IN AND SWITCH O UT OF MUTUAL FUND SCHEME. IT IS NOT ONLY THE PROFITS THAT HAVE NOT BEEN TAKEN INTO ACCOUNT BUT L OSS FIGURES HAVE ALSO BEEN OMITTED. THEREFORE THE MISTAKE COMMITTED BY THE ASSESSEE IS BONAFIDE M ISTAKE. THE ASSESSEE HAD GIVEN EXPLANATION FOR LOWER RETURNED INCOME FROM SHORT TERM CAPITAL G AINS. THE EXPLANATION OFFERED BY THE ASSESSEE HAS NOT FOUND TO BE FALSE OR INCORRECT. THEREFORE IT IS NOT A CASE WHERE INCOME HAS BEEN CONCEALED BUT CORRECT INCOME WAS NOT RETURNED AS T HE ASSESSEE COULD NOT IDENTIFY THE INCOME CORRECTLY BECAUSE OF SWITCH IN AND SWITCH OUT OF MU TUAL FUND SCHEME. THEREFORE IN OUR 8 I. T. APPEAL NO. 2739 (DEL) OF 2011. CONSIDERED OPINION IT IS NOT A CASE OF LEVY OF PEN ALTY UNDER SECTION 2712(1)(C). IN VIEW OF THE ABOVE IT IS HELD THAT THE LD. CIT (A) WAS NOT JUST IFIED IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C). WE THEREFORE CANCEL THE PENALTY IMPOS ED UNDER SECTION 271(1)(C) OF THE ACT. 13. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 23 RD SEPTEMBER 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJA N ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD SEPTEMBER 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT.