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2017 (8) TMI 929 - HC - Income TaxPenalty u/s 271(1)(c) - Exemption claimed u/s 54B - proof of sale of agricultural land at Neelankarai and re-investment in agricultural land at Mahabalipuram - Bonafide belief - Held that:- The Explanation to Section 271 makes it clear that, if in cases of concealment of particulars of income or furnishing of inaccurate particulars of income, the Assessee fails to offer an explanation or offers an explanation which is found by the ITO or the AAC to be false or offers an explanation which he is not able to substantiate, the amount added or disallowed in computing the total income of such person shall for the purpose of clause (c) i.e., for the purpose of concealment, be deemed to represent the income in respect of which particulars have been concealed. Penal proceedings are not automatic and the levy depends upon the facts and circumstances of each case. In the case on hand, having regard to the particular facts and circumstances of this case, the learned Tribunal has allowed the appeal and deleted the penalty. The proposition of law that emerges from the judgments referred to above is that in view of the explanation added, it cannot be said that the onus lies on the Revenue to establish mens rea in cases of concealment and/or short payment of tax. There is an onus on the Assessee. Whether the Assessee has been able to discharge the onus would depend on the facts and circumstances of the case. In the instant case, the learned Tribunal, in effect, arrived at a clear finding that imposition of penalty was not justified having regard to the facts and circumstances of the case that it was not the case of the Assessing Officer that the Assessee's claim was false or bogus. Neither the Assessing Officer nor the Commissioner of Income Tax (Appeals) had examined the claim of the Assessee that the Assessee had given money to M/s.Alpha Commercials for the purpose of investment in residential property. The Assessee's remittance of demand raised by the department cannot be a reason for levy of penalty. Assessee had bona fide believed that M/s.Alpha Commercials had, as per mutual agreement, invested the money in residential property to enable the Assessee to claim the benefit of Section 54F/54B of the Act. - Decided in favour of assessee.
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