Amol Vasant Deshmukh Vs ITO (ITAT Pune)
1918-Day Delay Condoned; Penalty u/s 271(1)(c) Deleted for Inadvertent Excess under section 54F/54B Claim
Pune ITAT “B” Bench condoned an extraordinary delay of 1918 days and deleted penalties levied u/s 271(1)(c) holding that mere excess claim of deduction due to inadvertent mistake does not amount to furnishing inaccurate particulars.
The assessees, co-owners of land under a development agreement, had offered LTCG spread over multiple years and claimed deductions u/s 54F & 54B. For AY 2015-16, while only ₹27.14 lakh of LTCG remained taxable, the assessee erroneously offered higher LTCG of ₹90.95 lakh and claimed excess deduction of ₹63.80 lakh. During assessment itself, on noticing the mistake, the assessee filed a revised computation and paid due taxes, though the return was not formally revised. AO nevertheless levied penalties ranging from ₹14.60 lakh to ₹18.75 lakh, which were confirmed by CIT(A).
ITAT first condoned the long delay, accepting explanations of Covid disruption, serious accident of a key person, and wrong email ID of earlier CA, relying on Collector vs. Mst. Katiji (SC) and Inder Singh vs. State of MP (SC). On merits, Tribunal held that all primary facts were fully disclosed, LTCG was correctly shown, and conditions of sections 54F & 54B were otherwise fulfilled. The excess claim arose from a bona fide computational error, promptly rectified during assessment.
Applying the binding ratio of CIT vs. Reliance Petroproducts (322 ITR 158) (SC), ITAT held that making an unsustainable claim in law, without concealment or false particulars, cannot attract penalty. Accordingly, penalties u/s 271(1)(c) were deleted for all three assessees and appeals allowed in full.
FULL TEXT OF THE ORDER OF ITAT PUNE
