Director Of Income Tax (It) – 1, Mumbai v. Asia Attractive Dividend Stock Fund, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.355 OF 2013 Director of Income Tax (IT) – 1, Mumbai..Appellant. Versus Asia Attractive Dividend Stock Fund, Mumbai..Respondent. Mr.Tejveer Singh for the appellant.None for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 13[th] March 2013 P.C. : Office objections waived. 2.In this appeal by the Revenue for assessment year 2008-09, although several questions have been formulated in the memo of appeal, the basic dispute is whether the Tribunal was justified in deleting the penalty under Section 271(1)(c) of the Income Tax Act, 1961 levied upon the respondent – assessee by the assessing officer. 3.The respondent – assessee had originally filed its return of itxal355-13 income claiming a refund of Rs.4.32 crores. This was on the basis of computing its tax payable on the short-term capital gain at the rate of 10% under Section 111A of the Income Tax Act, 1961 ('Act' for short). However, the respondent – assessee on its own realized its mistake in claiming refund and by a letter dated 23[rd] November 2010 brought it to the notice of the assessing officer. The respondent – assessee pointed that the tax payable on the capital gains was at the rate of 30% at which rate even the advance tax had been paid. Consequent thereto, the respondent – assessee filed revised computation on the basis of tax being payable at the rate of 30%. The assessing officer completed the assessment without granting the claim for refund. However, penalty under Section 271(1)(c) of the Act was levied upon the respondent – assessee by the assessing officer. The Commissioner of Income Tax (A) upheld the order of the assessing officer levying penalty. 4.On further appeal, the Tribunal deleted the penalty as it found that this was a case of bona fide clerical error while computing the tax liability in the process of filing its return of income. However, as the same was rectified by the respondent – assessee on its own before the assessment was finalized, penalty was not justified. The fact of the clerical error was also fortified by the fact that the advance tax had been paid by the respondent – assessee at the rate of 30% and not at the rate of 10%. 5.In view of the fact that the order of the Tribunal is based on finding of fact, we see no reason to entertain the present appeal. Accordingly, the appeal is dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)