COMMISSIONER OF INCOME TAX Vs. DEEPAK KUMAR

JUDGEMENT

(1.) THE Revenue is in appeal under s. 260A of the IT Act, 1961 (for brevity, 'the Act') against order dt. 30th March, 2007 (A -6), passed by the Income -tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (for brevity, 'the Tribunal'), in ITA No. 594/Chd/2006, in respect of the asst. yr. 2004 -05. The Tribunal has affirmed the order of the CIT(A),.Karnal, passed on 24th May, 2006. It is common case of both the parties that facts of the instant appeal were identical to the facts in the case of Asstt. CIT v. Amar Nath in ITA No. 592/Chd/2006 (for the asst. yr. 2004 -05). The Tribunal recorded the finding holding that the facts are identical and the contention raised by the parties were also similar. It is appropriate to mention that the assessee -respondent disclosed all the particulars in his return filed under s. 143(1) of the Act. He had disclosed purchasing of 1,15,000 shares of UBI for an amount of Rs. 18,40,000 on 6th Sept., 2002. He sold these shares on 8th Sept., 2003 for a sum of Rs. 50,81,565. In another transaction he had purchased 2,100 shares of Maruti for an amount of Rs. 2,62,500 on 4th July, 2003. Out of those shares, he sold 1,950 shares on 5th Sept., 2003 for an amount of Rs. 5,16,153. In the first transaction there was long -term capital gain and in the second transaction there was short -term capital gain. In the return filed by the assessee -respondent, he claimed that the profit on the sale of shares was exempt under s. 10(36) of the Act. The AO completed the assessment under s. 143(3) of the Act and it was held that the assessee -respondent had wrongly claimed the profit on sale of shares under s. 10(36) of the Act. The allegation was that he had concealed income to the extent of Rs. 35,21,650. While finalising the assessment, penalty proceedings under s. 271(1)(c) of the Act were also initiated and penalty @ 100 per cent, amounting to Rs. 4,10,440 was imposed.

(2.) ON appeal, the CIT(A) came to the conclusion that the provisions of s. 271(1)(c) of the Act would not be attracted to the facts of the present case. The reason given for the aforesaid finding by the CIT(A) is that the return was filed by the assessee -respondent on the advise tendered by his counsel. In any case, all detailed facts along with the dates were disclosed in the order of the CIT(A). In support of the aforesaid view, the CIT(A) placed reliance on the view taken by this Court in the case of CIT v. Ajaib Singh & Co. : [2001] 170 CTR (P&H) 489 : [2002] 253 ITR 630 (P&H), and similar view taken by the Bombay and Madhya Pradesh High Court. It was found that the counsel for the assessee -respondent had admitted his mistake in advising the assessee and the affidavit by the learned counsel was accepted by the CIT(A). Accordingly, it has been held that no litigant should suffer on account of the mistake committed by the counsel because the advise tendered by the counsel is accepted by the litigant, which is based on bona fide belief of being correct.

(3.) HAVING heard learned counsel, we are of the view that the question concerning bona fide mistake or belief is more or less a question of fact, which has been decided by the CIT(A) on the basis of the affidavit filed by the counsel. There is no finding of intentional and motivated mistake which might have been resorted to by the assessee -respondent. We are not impressed with the argument of Mr. Sukant Gupta, learned counsel for the appellant -Revenue, that the issue of bona fide belief based on the advise of the counsel should have been raised before the AO and there was no scope for raising such an issue before the CIT(A) because it is an afterthought. However, we do not find any merit in the aforesaid submission. It is not unknown that IT returns are filed through the experts in the IT laws and, therefore, the advise given by the learned counsel can be acted upon with bona fide belief to be correct. There is no rule of law that the aforesaid issue should have been pressed only before the AO or there was any bar on the assessee -respondent not to raise this issue before the appellate authority. The affidavit filed by the counsel of the assessee, has been readily accepted by the CIT(A) as well as by the Tribunal. It is well settled that if on the evidence adduced before the AO or the appellate forum, a possible view has been taken then under s. 260A of the Act, no substantive question of law could be framed merely because another view is possible. The appeal is, thus, without merit and accordingly the same is dismissed.