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2024 (4) TMI 203 - HC - Income TaxPenalty imposed by the Settlement Commission u/s 271(1) (c) - Power of Attorney holder executed the sale deed of immovable property but return of income filed by the petitioner did not include the capital gains arising therefrom, to any extent - as submitted no element of mens rea was alleged or established as neither the petitioner was aware of the sale of his property nor he has received any consideration through any mode nor the Revenue has made any allegations in that regard., also there is no evidence whatsoever of any amount having been received in excess of disclosed consideration HELD THAT:- In the first place, the assessee may never have been charged of practising concealment of material particulars of his income qua the proposed revision of Stamp Duty beyond Rs. 24,50,000/-. That liability came to be settled at Rs. 80,43,000/-. Since those facts had not unfolded, they were not known to the petitioner. Consequently, he could not have been saddled with a penalty for non-disclosure of such facts. The petitioner may never have been saddled to perform an impossible duty. A fact that was not know known to the petitioner may never have been disclosed by him. Second, as to imposition of penalty, corresponding to Stamp Duty assessed on value of sale consideration suffice to note that assessee had furnished explanation with respect to the same. According to the assessee, he was not aware of the sale deed executed by his Power of Attorney holder By observing conduct of the petitioner as "contumacious" and that he had clearly furnished inaccurate particulars, the Settlement Commission may never have substituted the requirement of reasoning with adjectives or by recording simple conclusion not supported by reasoning or finding as may lead to such conclusions. It was legally permissible to the Settlement Commission to consider imposition of the penalty under Section 271(1) (c) of the Act, yet in the facts of the present case, element of concealment of income was not established. Merely because addition may be made on the quantum side by invoking Section 50 C of the Act, it did not itself establish that such estimated consideration had actually passed on to the petitioner. Therefore, no conclusion of concealment may have arisen solely occasioned by that estimation of income by way of capital gains made by the Settlement Commission. In absence of any independent evidence to establish receipt of extra consideration and in absence of any finding to reject the fact explanation furnished by the petitioner, both as to ignorance of the sale deed executed by his Power of Attorney and also with respect to the actual consideration received, element of concealment was not established in the present case. Accordingly, the writ petition succeeds in part. The levy of penalty u/s 271(1)(c) of the Act under the order dated 27.10.2010 passed by the Income Tax Settlement Commission, is set aside. Decided in favour of assessee.
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