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2019 (9) TMI 900 - AT - Income TaxPenalty u/s 271(1)(c) - voluntary surrender on account of long term capital gain on sale of shares - HELD THAT:- It is evident from the records that all the purchases and sales of share have been clearly shown in the income and expenditure account and also there is no inaccurate particulars furnished by assessee. The assessee, while filing the return of her income, had disclosed all the material and details in respect of long term capital gain, therefore, the AO was not justified in levying the penalty u/s 271(1)(c). In the proceedings under section 271(1)(c) of the Act, the onus is on the AO to prove as to which facts and/or records submitted by assessee are false or incorrect and that the assessee has furnished inaccurate particulars or concealed its income. Assessee, during assessment proceedings, had agreed to the disallowance and made a voluntary surrender on account of long term capital gain on sale of shares, to buy peace and to avoid litigation, which does not prove that it is a case of concealment of income or furnishing of inaccurate particulars of income as contemplated in the provisions of section 271(1)(c). Therefore, the surrender made by the assessee is voluntary, for which only addition can be made and penalty under section 271(1)(c) of the Act cannot be initiated. Coming to the reliance placed by the ld. D.R. on the decision of the Hon'ble Madras High Court in the case of ‘Sundaram Finance Ltd. vs. ACIT’ [2018 (5) TMI 259 - MADRAS HIGH COURT] we find that defect in the notice issued under section 274 read with section 271 of the Act, but in the present case the penalty levied under section 271(1)(c) of the Act has been deleted by the CIT(A), dealing with the issue on merit and not on the basis of defect in the notice issued under section 274 read with section 271 of the Act. No infirmity in the order of the ld. CIT(A), deleting the penalty levied under section 271(1)(c) of the Act. - Decided in favour of assessee.
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