Amit Jain, New Delhi V. ACIT, New Delhi

ITA 2874/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86846 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 09-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DASKANUNJNA
• Keywords: Earning of tax free income; Revised return; Ignorance of law

Judgement Text

ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A NEW DELHI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO. 2874/DEL/2010 ASSTT.YEAR: 2005-06 SHRI AMIT JAIN, VS ACIT, 7/33, ANSARI ROAD, CIRCLE-30(1), DARYAGANJ, NEW DELHI. NEW DELHI. (PAN: AAEPJ3715H) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI RAKESH GUPTA, ADV., ASHWANI T ANEJA,ADV., A.ANAND, ADV. RESPONDENT BY: SHRI P. DASKANUNJNA DR DATE OF HEARING: 22.01.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT(A)-XXV, NEW DELHI DATED 20.4.2010 IN APPEAL NO. 22/08-09 FOR AY 2005-06 BY WHICH THE CIT(A) DISMISSING THE FIRST AP PEAL OF THE ASESSEE UPHELD THE PENALTY ORDER DATED 25.04.2008 IMPOSING THE PENALTY U/S 271(1)( C) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL:- ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 2 1. THAT THE LEARNED ASSESSING OFFICER ERRED IN IMPOSING PENALTY U/S 271 (1)(C) OF THE ACT AMOUNTIN G TO RS.5,49,601/-, WITHOUT INITIATING THE SAME IN ACCOR DANCE WITH THE PROVISIONS OF THE LAW, AS THE READING OF T HE ASSESSMENT ORDER DOES NOT PROVE THAT THE ASSESSING OFFICER WAS PRIMA FACIE SATISFIED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS WITH REGARD TO THE ASSESSEE FURNISHED I NACCURATE PARTICULARS OF INCOME OF RS.9,23,180/-, I.E., (RS.1 ,04,72,423/- MINUS RS.95,49,243/-) AND THEREFORE THE ASSESSING O FFICER WAS NOT HAVING JURISDICTION TO IMPOSE PENALTY AS HE LD BY HONORABLE DELHI HIGH COURT IN THE CASE OF MADHUSHRE E GUPTA 317 ITR 107. 2. WITHOUT PREJUDICE TO THE ABOVE GROUND, THE LEARN ED CIT(APPEALS) ERRED IN UPHOLDING PENALTY U/S 271(1)( C) OF THE ACT AMOUNTING TO RS.5,49,601/-, WITHOUT APPRECIATIN G 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 TER M CAPITAL GAIN' ON SALE OF SHARES DUE TO CHANGE IN THE PROVIS ION OF LAW W.E.F. 1ST OCTOBER, 2004 RELEVANT TO THE ASSESSMEN T YEAR UNDER APPEAL. THAT THE LEARNED CIT(APPEALS) FAILED TO APP RECIATE 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 AUTHORI TIES ALSO CONSIDERED THE SAID EXEMPTED INCOME FOR THE PURPOSE OF CALCULATION OF PENALTY. 3. THAT THE ORDERS OF THE ASSESSING OFFICER & CIT(A PPEALS) ARE NOT BASED ON THE FACTS OF THE CASE & AS PER LAW AND HENCE PENALTY SUSTAINED BY THE CIT(APPEALS) IS TOTALLY IL LEGAL AND THE ORDERS OF BOTH THE AUTHORITIES ARE LIABLE TO BE QUA SHED. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE APPELLANT FILED A RETURN OF INCOME ON 31.3.2006 I.E. LAST DAY OF TH E RELEVANT ASSESSMENT YEAR, DECLARING THE INCOME OF RS.95,49,243/- ON ACCOUNT O F SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN AT RS.38,55,115/-. THE SHOR T TERM CAPITAL GAIN WAS ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 3 CHARGEABLE TO TAX AT 10% AND LONG TERM CAPITAL GAIN WAS CLAIMED AS EXEMPT INCOME OF THE ASSESSEE. DURING THE COURSE OF THE A SSESSMENT PROCEEDINGS WHEN THE AO SOUGHT THE DETAILS OF PURCHASE AND SALE OF S HARES ON WHICH SAID CAPITAL GAIN HAD BEEN CLAIMED, THE ASSESSEE FILED REVISED R ETURN ON 27.2.2007 DECLARING INCOME AT RS.1,04,72,423/- AND PAID ADDITIONAL TAX OF RS. 8 LAKH. THE AO ASSESSED THE INCOME AS PER REVISED RETURN AND ALSO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT AGAINST THE ASSESSEE FOR FURNI SHING OF INACCURATE PARTICULARS OF ITS INCOME. AFTER CONSIDERING THE REPLY OF THE ASSESSEE DATED 2.4.2008, THE AO HELD THAT THE ASSESSEE HAD WILFULLY CONCEALED IT S INCOME BY FILING INACCURATE PARTICULARS IN THE ORIGINAL RETURN OF INCOME. THE AO FURTHER HELD THAT THE ASSESSEE FILED REVISED RETURN WHEN DETAILS WERE CAL LED AND IN THIS SITUATION, THE ASSESSEE WOULD HAVE GOTTEN AWAY WITH SUPPRESSED INC OME AND THE AO FINALLY HELD THAT THE EXPLANATION OFFERED DURING THE PENALT Y PROCEEDINGS WAS NOT BONAFIDE AND, THUS, THE AO LEVIED PENALTY AMOUNTING TO RS.16,48,803 U/S 271(1)( C) OF THE ACT. 4. BEING AGGRIEVED BY THE ABOVE PENALTY ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS ALSO DISMISSED B Y PASSING THE IMPUGNED ORDER. THE CIT(A) HELD THAT THE ASSESSEE HAS MEREL Y CLAIMED CLERICAL, ACCOUNTING/ARITHMETICAL MISTAKE AND FAILED TO PROVI DE ANY EXPLANATION TO SUBSTANTIATE THE SAME. THEREFORE, IN ABSENCE OF SA TISFACTORY, BONAFIDE EXPLANATION FROM THE ASSESSEE IN TERMS OF EXPLANATI ON 1 TO SECTION 271(1)( C) OF ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 4 THE ACT, THE ACTION OF THE AO IN IMPOSING PENALTY F OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS FOUND TO BE JUSTIFIED. N OW, THE EMPTY HANDED ASSESEE IS BEFORE THIS TRIBUNAL WITH THE GROUNDS AS REPRODU CED HEREINABOVE. 5. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RECORD PLACED BEFORE US, INTER ALIA LEGAL PROPOSITI ONS AND CITATIONS AS RELIED BY BOTH THE PARTIES. 6. LD. COUNSEL OF THE ASSESSEE PLACED RELIANCE ON T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPE RS PVT. LTD. VS CIT (2012) 348 ITR 306 (SC) , THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI DATED 7.10.2013 IN ITA 481/2013 CIT VS ARVIND NAGPAL AND DECISION OF ITAT DELHI 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. 5,49,6 01 U/S 271(1)(C) OF THE ACT AS IMPOSED BY THE AO ON THE GROUND THAT THE ASSESSEE F URNISHED INACCURATE PARTICULARS OF ITS INCOME INASMUCH AS INCOME ORIGIN ALLY OFFERED IN THE RETURN WAS TO THE TUNE OF RS.95,49,243/- AS AGAINST THE AS SESSED INCOME OF RS.1,04,72,423. LD. COUNSEL FURTHER SUBMITTED THAT THE AO COMPUTED THE DIFFERENCE BETWEEN THE TAX ON RETURNED INCOME AND T AX 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 INITI ALLY BY ANY PROFESSIONAL ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 5 ADVICE FILED A REVISED RETURN CORRECTING THE TAX PA YABLE ON SHORT TERM CAPITAL GAIN ON SHARES, RECLASSIFYING CERTAIN SHORT TERM CA PITAL GAIN ATTRACTING 30% TAX RATE INSTEAD OF 10% TAX RATE ORIGINALLY CALCULATED AND UPWARD REVISING THE FIGURE OF LONG TERM CAPITAL GAIN AND MAKING SOME OTHER CHA NGES IN THE QUANTUM OF BANK INTEREST AND DIVIDEND INCOME AND DECLARING EXE MPT INCOME ON SALE OF PERSONAL EFFECTS AS TAXABLE. LD. COUNSEL HAS SPECI ALLY DRAWN OUR ATTENTION TOWARDS THIS FACT THAT THE AO FINALISED THE ASSESSM ENT AT THE INCOME DECLARED BY THE ASSESSEE IN THE REVISED RETURN AND THIS FACT HA S ALSO NOT BEEN DISPUTED BY THE LD. DR. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED HIS RETURN DECLARING AN AGGREGATE SHORT TERM CAPITAL GAIN OF R S. 95 LAKH AND PAID TAX @10% BUT SUBSEQUENTLY WITH PROFESSIONAL ASSISTANCE AND DETAILED WORKING, THE ASSESSEE HAS RE-CLASSIFIED SHORT TERM CAPITAL GAIN ACCORDING TO WHICH SHORT TERM CAPITAL GAIN ATTRACTING 10% TAX RATE WAS OF RS.83 L AKH AND SHORT TERM CAPITAL GAIN WAS TO BE TAXED @30%. LD. COUNSEL STRENUOUSLY CONTENDED THAT ALL THESE ERRORS IN QUANTUM PROCEEDINGS AND ITS RECLASSIFICAT ION WITH PROFESSIONAL AND SPECIALISED ASSISTANCE WAS BONA FIDE IN VIEW OF CHA NGED REGIME OF CONCESSIONAL TAX INTRODUCED FROM THE MIDDLE OF THE YEAR AND THE BONAFIDE OF THE ASSESSEE IS EVIDENT IN THE ORIGINAL RETURN. LD. COUNSEL HAS FU RTHER DRAWN OUR ATTENTION TOWARDS PAPER BOOK OF THE ASSESSEE AND SUBMITTED TH AT THE ASSESSEE FILED DETAILED SUBMISSIONS BEFORE THE CIT(A) EXPLAINING HIS BONA F IDE. LD. COUNSEL ALSO PLACED ADDITIONAL ARGUMENT THAT THE ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF R S.95 LAKH WHICH WAS OFFERED ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 6 TO TAX IN THE ORIGINAL RETURN OF INCOME AS SHORT TE RM CAPITAL GAIN ON SHARES AND THEREFORE, THERE IS NO QUESTION OF IMPOSING ANY PEN ALTY MERELY FOR THE REASON THAT THE SHORT TERM CAPITAL GAIN DID NOT CONTAIN A PORTION ATTRACTING TAX RATE OF 30%. LD. COUNSEL HAS FURTHER DRAWN OUR ATTENTION T OWARDS FORM NO.2D AND SUBMITTED THAT THERE IS NO PARTICULAR OF INCOME WHI CH CAN BE SAID TO HAVE BEEN FURNISHED INACCURATELY. THUS, THERE IS NO QUESTION OF LEVYING OF PENALTY ON THE ASSESSEE. 7. REPLYING TO THE ABOVE, LD. DR SUPPORTING THE IMP UGNED ORDER AS WELL AS THE PENALTY ORDER SUBMITTED THAT THERE WAS NO MERIT IN THE EXPLANATION OF THE ASSESSEE BECAUSE THE ASSESSEE ESCAPED FROM PENALTY ONLY ON SUBMISSION OF A BONAFIDE EXPLANATION IN TERMS OF EXPLANATION 1 ATTA CHED TO SECTION 271(1)( C) OF THE ACT TO THE SATISFACTION OF THE AO. LD. DR FURT HER SUBMITTED THAT THE CIT(A) WAS QUITE JUSTIFIED IN HOLDING THAT THE ASSESSEE HA S 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 F OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS OF BOTH THE PARTIES, AT THE OUTSET, WE RESPECTFULLY TAKE COGNIZANCE OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT VS ARVIND NAGPAL(SUPRA) ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 7 WHEREIN THEIR LORDSHIPS REFERRING TO THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS C IT (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 FURNISHIN G ANY INACCURATE PARTICULARS. IT APPEARS TO US THAT ALL T HAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING IT S RETURN, FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOT AL INCOME. THIS CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CALIBRE AND EXPERTISE OF THE ASS ESSEE 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 CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHI NG INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. 20. WE ARE OF THE OPINION, GIVEN THE PECULIAR FACTS OF THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE ASSESSEE IS N OT JUSTIFIED. WE ARE SATISFIED THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDE D TO OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNISH I NACCURATE PARTICULARS. 9. COMING TO THE FACTUAL MATRIX OF THE PRESENT CASE , WE NOTE THAT THE LD. DR HAS NOT DISPUTED THIS FACT THAT ORIGINALLY THE ASSE SSEE FILED HIS RETURN OF INCOME DECLARING SHORT TERM CAPITAL GAIN ON SHARES OF RS.9 5,49,243/- AND LONG TERM CAPITAL GAIN ON SHARES OF RS.38,55,115/- AND SUBSEQ UENTLY, THE ASSESSEE FILED REVISED RETURN DECLARING INCOME OF RS.1,04,72,423 W HICH WAS ACCEPTED BY THE AO FOR THE PURPOSE OF TAXATION. THIS FACT HAS ALSO BEEN NOTED BY THE CIT(A) IN THE IMPUGNED ORDER PARA 3 AT PAGE 2. ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 8 10. WE FURTHER OBSERVE THAT AS PER RATIO OF THE DEC ISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT VS ARVIND NAGPAL (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE CALIBRE AND EXPER TISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR. THEIR LORDSHIPS FURTHER HELD THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL. BUT THE ABSENCE OF DUE CARE IN A CASE SUCH AS THE PRESENT DOES NOT MEAN THAT THE ASSESSEE IS GUIL TY OF EITHER FURNISHING INACCURATE PARTICULARS OF ATTEMPTING TO CONCEAL ITS INCOME. IN THE PRESENT CASE, THE ASSESSEE RE-CLASSIFIED THE INCOME IN THE REVISE D RETURN WHICH WAS FILED UNDER PROFESSIONAL ADVICE. FROM PAPER BOOK PAGE NO. 1 AN D 2 OF THE ASSESSEE, WE OBSERVE THAT THE ORIGINAL RETURN WAS FILED SHOWING SHORT TERM CAPITAL GAIN FROM SHARES AMOUNTING TO RS.95,49,243 AND PAYING TAX AT 10% AND LONG TERM CAPITAL GAIN ON SHARES WAS SHOWN AT RS.38,55,115/- AND ANOT HER LONG TERM CAPITAL GAIN ON THE SALE OF PLOT WAS INITIALLY INDEXED FROM THE DAY WHEN PREVIOUS OWNERS HELD THE OWNERSHIP. SUBSEQUENTLY, THE REVISED RETU RN (PB PAGE 3 TO 5) SHOWING SHORT TERM CAPITAL GAIN ATTRACTING 10% TAX RATE OF RS.83,41,776 AND LONG TERM CAPITAL GAIN ON SHARES AT RS.43,75,765/- AND BENEF IT 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, DIVIDE ND ETC. BEING METED OUT AT DIFFERENT AMOUNT AND DIFFERENT TREATMENT. 11. FROM PAPER BOOK PAGE NO. 9 TO 13, WE OBSERVE TH AT THE ASSESSEE DURING PENALTY PROCEEDINGS SUBMITTED REPLY DATED 19.3.08 A ND SUBMITTED A DETAILED ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 9 EXPLANATION TO THE SITUATION OF INADVERTENT MISTAKE CROPPING IN THE ORIGINAL RETURN OF INCOME AND ITS RECTIFICATION BY WAY OF FI LING A REVISED RETURN. LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOW ARDS 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 BO NAFIDE AND IN THIS SITUATION, THE ASSESSEE CANNOT BE HELD GUILTY OF FILING OF INA CCURATE PARTICULARS OF ITS INCOME OR CONCEALMENT OF INCOME. 12. AT THIS JUNCTURE, RESPECTFULLY FOLLOWING THE DE CISION OF HONBLE 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 INCO ME AS AN INDIVIDUAL WITHOUT ANY PROFESSIONAL ASSISTANCE. SUBSEQUENTLY, THE ASSESSE E FILED A REVISED RETURN RECLASSIFYING THE INCOME AND THE AO ASSESSED THE IN COME OF THE ASSESSEE AT THE INCOME DECLARED IN THE REVISED RETURN FILED ON 27.2 .2007. THE DETAILED EXPLANATION SUBMITTED BY THE ASSESSEE ON 2.4.2008 ( PAPER BOOK PAGE 9 TO 13) CLARIFY ENTIRE FACTS AND CIRCUMSTANCES IN WHICH ORI GINAL RETURN OF INCOME AND REVISED RETURN OF INCOME WERE FILED. WE FURTHER NO TE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED DETA ILED JUSTIFICATION AND REASONS FOR FILING THE REVISED RETURN WHICH WERE PL ACED ON RECORD. WE FURTHER NOTE THAT THE REASONS OFFERED BY THE ASSESSEE DURI NG PENALTY PROCEEDINGS ON THE SAME LINE CANNOT BE HELD AS AN AFTERTHOUGHT AND THE SE SUBMISSIONS SUPPORT THE EXISTENCE OF BONA FIDE REASONS AND CAUSE FOR FILING THE REVISED RETURN. WE ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 10 FURTHER NOTE THAT THE ASSESSMENT STOOD FRAMED ON TH E REVISED RETURN FIGURE ITSELF WHICH ALSO SUPPORT THE BONA FIDE INTENTION OF THE A SSESSEE. UNDER THE FACTS AND CIRCUMSTANCES AS NOTED ABOVE, IT CANNOT BE VALIDLY HELD THAT EITHER THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME OR T HE ASSESSEE HAS CONCEALED PARTICULARS OF ITS INCOME AND THUS, PENALTY U/S 271 (1)( C) CANNOT BE IMPOSED. 13. IN THE INSTANT CASE, THE AO ERRED IN IMPOSING P ENALTY U/S 271(1)(C) OF THE ACT. WE FURTHER OBSERVE THAT THE CIT(A) ALSO ERRED IN UPHOLDING THE PENALTY BECAUSE THE CIT(A) IGNORED THIS FACT THAT THE ASSES SEE SIMPLY MADE RECLASSIFICATION WIHTOUT AID OF PROFESSIONAL IN RES PECT OF COMPUTATION OF SHORT TERM CAPITAL GAIN ON SALE OF SHARES. WE ALSO NOTE THAT THERE WAS A CHANGE IN THE TAXATION PROVISIONS W.E.F. 1.10.2004 RELEVANT TO TH E ASSESSMENT YEAR UNDER CONSIDERATION AND HENCE, IN THIS SITUATION, RETURN ORIGINALLY FILED BY THE ASSESSEE WITHOUT PROFESSIONAL AND EXPERT CONSULTATION WHICH WAS SUBSEQUENTLY SUBSTITUTED BY FILING REVISED RETURN AND THE AO COM PLETED THE ASSESSMENT ON THE SAME FIGURE AS PER REVISED RETURN OF INCOME, THEREF ORE, PENALTY IMPOSED BY THE AO AND UPHELD BY THE CIT(A) IS NOT SUSTAINABLE IN V IEW OF EXPLANATION 1 ATTACHED TO SECTION 271(1)( C) OF THE ACT. 14. ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A LOGICAL CONCLUSION THAT THE ASSESSEE FILED DETAILED SUBMISSIONS DURING ASSESSMENT PROCEEDINGS WHICH PROMPTED HIM TO FILE A REVISED RETURN WITH TH E ASSIGNMENT OF EXPERT AND PROFESSIONAL. THE ASSESSEE ALSO REITERATED THIS EX PLANATION AND SUBMISSION ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 11 DURING PENALTY PROCEEDINGS WHICH CANNOT BE HELD AS AFTERTHOUGHT AND ON THE OTHER HAND, THE SAME SUPPORTS THE BONA FIDE OF THE ASSESSEE. IN THIS SITUATION, IT CANNOT BE HELD THAT THE ASSESSEE HAS CONCEALED PART ICULARS OF HIS INCOME OR FURNISHED PARTICULARS OF SUCH INCOME AND EXPLANATI ON 1 TO SECTION 271(1)(C) OF THE ACT DOES NOT SUPPORT THE ACTION OF THE REVENUE AUTHORITIES FOR IMPOSING PENALTY ON THE ASSESSEE. FINALLY, WE HOLD THAT THE AO IMPOSED PENALTY ON THE WRONG PREMISE WHICH WAS UPHELD BY THE CIT(A) IN IGN ORING THE DETAILED EXPLANATION AND SUBMISSIONS OF THE ASSESSEE FILED D URING QUANTUM PROCEEDINGS. THE REVENUE AUTHORITIES ALSO IGNORED THIS IMPORTANT FACT THAT THE AO COMPLETED ASSESSMENT PROCEEDINGS AT THE SAME INCOME WHICH WAS FILED BY THE ASSESSEE IN THE REVISED RETURN AND THE AO HAS NOT BROUGHT OUT A NY FACT TO SUPPORT THIS ALLEGATION THAT EITHER THE ASSESSEE HAS CONCEALED T HE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . ACCORDINGLY, GROUND NO. 1, 2 AND 3 OF THE ASSESSEE ARE ALLOWED AND PENALTY IS HEREBY CANCELLED AND THE AO IS DIRECTED TO DELETE THE PENALTY. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.2.2015. SD/- SD/- (PRAMOD KUMAR) (CHANDRAMOHAN GAR G) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 23RD FEBRUARY, 2015 GS ITA NO.2874/DEL/2010 ASSTT.YEAR: 2005-06 12 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER AS STT. REGISTRAR