By TIOL News Service

MUMBAI, FEB 25, 2019: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether taxes offered by assessee at erroneous rate, if promptly revised without any opposition on being noticed, shows bonafide and hence attracts no penalty. YES IS THE VERDICT.

Facts of the case:

The Revenue Department preferred the present appeal challenging the action of ITAT in deleting the penalty levied u/s 271(1)(c) without appreciating that the assessee had computed tax at the concessional rate provided u/s 271(1)(c), even though the concessional rate was not applicable to its case and thus had taken undue advantage resulting in loss of Rs. 76,91,773/- to the Revenue.

High Court held:

++ it is seen that the Tribunal has noticed that the assessee had made full disclosure of the storm term capital gain, however, had computed the tax at lower rate which the assessee did not qualify since the said shares did not offer security transaction tax. Upon such error being pointed out, the assessee without any opposition promptly revised the return. Under these circumstances, it can be seen that the Tribunal viewed the lower computation of payable tax as arising from a bonafide error. Additionally, as noted that the Tribunal found that upon said error being pointed, the assessee offered the income to tax through revised return. No question of law therefore arises.

(See 2019-TIOL-458-HC-MUM-IT)