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ACIT vs. Cecilia Haresh Chaganlal (ITAT Mumbai)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: November 5, 2014 (Date of pronouncement)
DATE: November 8, 2014 (Date of publication)
AY: 2009-10
FILE: Click here to download the file in pdf format
CITATION:
S. 271(1)(c): Explanation that bona fide mistake was committed on advice of CA is a reasonable one as per Explanation 1B of s. 271(1) and does not attract penalty

When there is no attempt on the part of the assessee to show the Long Term Capital Gain in a different category then merely because a concessional rate of tax was applied in the revised return does not ifso facto lead to the conclusion that the assessee has concealed the particulars of income. Even otherwise, all these facts and circumstances supports the explanation of the assessee that the concessional rate of tax on Long Term Capital Gain was applied on the basis of the advice of the Chartered Accountant, therefore, it was a bona fide mistake. This explanation, in our view is quite reasonable as per the Explanation 1B of section 271(1) of the Income Tax Act particularly in view of the fact that the assessee did not claim the benefit of indexed cost while computing the Capital Gain in question. This is not a case that the Long Term Capital Gain in question is not eligible for benefit of indexed cost. The claim of concessional tax applied on the Long Term Capital Gain, though, is against the provisions of Income Tax Act, however, it is based on the fact that the benefit of indexed cost was available to the Capital Gain in question which was not claimed by the assessee. In view of the above facts and circumstances of the case, we do not find any error or illegality in the impugned order of CIT(A) in deleting the penalty by following the Judgment of Hon’ble Supreme Court in the case of Price Waterhousecoopers 348 ITR 306 (SC).

5 comments on “ACIT vs. Cecilia Haresh Chaganlal (ITAT Mumbai)
  1. people work on advice from professionals like CAs, bonafide errors happen, hon tribunal is indeed right is its verdict.

  2. people work on advice from professionals like CAs, bonafide errors happen, hon tribunal is indeed right is its verdict.

  3. people work on advice from professionals like CAs, bonafide errors do happen, hon tribunal is indeed right is its verdict.

  4. people work on advice from professionals like CAs, bonafide errors do happen, hon tribunal is indeed right is its verdict.

  5. Bonafide errors thanks to CAs or consultants the assesses should not suffer penalties u/s 271(1)(c), after all assesses are not past masters in tax laws as their professions are definitely very different from CAs/consultants. that is even well proved in PwC matter on Satyam computers when matter was heard by hon SC.

    without courts tax payers would just get harassed that means cascading effect is on economy only which economy ought to be jealously guarded and need be helped, as day by day value of rupee is hitting the bottom. people are at receiving end.

    Bonafide errors need be taken into effect that way very sub section says cleatly in crystal clear terms.

    it is a settled law if statutes miss vital things courts can rectify is called natural justice as draftsmen are prone to make mistakes due to over load of work called like drafting, after all he is also just a human being! is it not ?

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