TMI Blog2000 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter was carried before the CIT(A) who confirmed the said penalty. Aggrieved by the same, the assessee is in appeal before us. 3. The Id. counsel for the assessee Sr. Advocate Shri N.M. Ranka submitted that the Department has adopted the value of immovable properties on estimate basis whereas the assessee had returned the value determined by the Land and Building Taxes Department for the purpose of levy of tax. He further submitted that such valuation made by the Land and Building Taxes Department is considered as fair market value of the property under Rajasthan Land and Building Taxes Act, 1964. He also submitted that the Assessing Officer has adopted the value of these properties on the basis of agreement to sale entered into in the year- 1980 and stated that the said agreement was not fully implemented till the relevant valuation date i.e. 31-3-1984. He also explained the different factors affecting the valuation of the inner portion as compared to outer portion of the said property and contended that these factors have not been considered by the Assessing Officer while adopting the values of the said property. He also drew our attention to the penalty notice issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decisions in CIT v. Rajbir Singh [1998] 233 ITR 126 (Punj. Har.) and 232 ITR 450 (sic). He also drew our attention towards the order passed by the Assessing Authority under the Rajasthan Land and Building Tax Act, assessing the value of the said property and submitted that neither the date of valuation nor the basis thereof has been mentioned in the said order. He further submitted that the assessee having entered into an agreement to sale in 1980 was well aware of the market value of the property and contended that non-disclosure of the said value anywhere shows its fraudulent andmala fide intention. He also submitted that the land was subsequently sold at the price mentioned in the agreement and as such contended that the action of the Assessing Officer in adopting this value is fully justified. He further submitted that all the cases cited by the Id. counsel of the assessee are riot applicable in the instant case, as the facts involved in these cases are entirely different from the present case. 5. In the rejoinder, the Id. counsel for the assessee submitted that the Assessing Officer has given the reference of 'Income-tax Act' in the notice instead of 'Wealth-tax Act' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in such cases is issued in the process of giving an opportunity of being heard to the assessee as envisaged in section 18(2) with the inherent object of effectively communicating or putting the assessee in the awareness and knowledge of initiation of penalty proceedings under the relevant section and if this object is accomplished, we are of the view that the notice is not rendered invalid just for non-striking off the irrelevant or inappropriate portions of the same. For this view we get support from the decision of the Hon'ble High Court of Andhra Pradesh in the case of CIT v. Chandulal [1985] 152 ITR 238 relating to notice issued under section 274 read with section 271(1)(c) of the Income-tax Act, 1961 which are analogous to sections 18(2) and 18(1)(c) of the Wealth-tax Act, 1957. The relevant portion of the said decision appearing in the Head-note is reproduced below "It cannot be said that by reason of the ITO not striking out inappropriate portions of the notice issued under section 274, the notice was rendered invalid. In the first place, it has to be borne in mind that the notice issued under section 274 is not prescribed under the rules. It is a notice administrativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to explain as to why it should not be done. Mere mistake in the language used or mere non-striking of the inaccurate portion cannot by itself invalidate the notice." 9. In the case of CIT v. Zeekoo Shoe Factory [1981] 127 ITR 837 (All.), the Hon'ble High Court of Allahabad held that proceedings under section 27 1 (1)(c) and Explanation of the Income-tax Act, 1961 [which is analogous to section 18(1)(c) of the Wealth-tax Act] are not criminal in nature so as to necessitate framing of a precise charge and it is sufficient compliance of section 274, if notice informs the assessee that the penalty proceedings are being initiated because of assessee's concealing of particulars of income or furnishing inaccurate particulars. Explaining further the Hon'ble High Court observed that in the cases covered by the explanation, the Revenue did not have to prove anything other than that the returned income was less than 80% of the assessed income. 9A. The other issue that has been raised by the Ld. counsel of the assessee is about the satisfaction of the Assessing Officer regarding concealment before the initiation of penalty proceedings. It is observed that assessment in this case was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 10. We are, therefore, of the view that there was a clear and valid satisfaction reached by the Assessing Officer in the course of assessment proceedings regarding the default which culminated in the initiation and imposition of penalty under section 18(1)(c). For this view, we also get support from the decision of Their Lordships of the Supreme Court in D.M. Manasvi v. CIT [1972] 86 ITR 557 wherein it has been held that the satisfaction of the ITO in the course of assessment proceedings regarding the concealment of income constitutes the basis or foundation for initiating the proceedings for levy of penalty. 11. It is observed that the decision of the M.P. High Court in Ganesh Prasad Badri Prasad's case, cited by the assessee in support of his contentions, deals with Explanation (1) to section 271(1)(c) of the Income tax Act, 1961 which is materially different from Explanation 4 to section 18(1)(c) involved in this case. Therefore, considering all the facts of the case, the material available on record and the legal position enumerated herein above, we do not find any legal infirmity or an infirmity of that kind which may render either the penalty notice or the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 18(1)(c) and thereafter the assessee is required to prove that the value of the asset as returned by him is the correct value and in case he fails to prove this, he shall liable to penalty under section 18(1)(c) irrespective of the fact that the returned value was on a bonafide basis because no word like "bonafide" has been incorporated in Explanation 4 as they have been incorporated in proviso to Explanation 2 and they could indicate that the Legislature did not intend to exonerate a person who fails within the mischief of Explanation 4 even if his act was bonafide. In the present case, the conduct of the assessee can also not be said to be bona fide inasmuch as he ignored the sale rate of the portion of the same property agreed by itself before the filing of the return and instead adopted the valuation which was substantially on the lower side. 14. The ld. counsel for the assessee has cited the case of Akshay Kumar Sanghi and drawn our attention towards the two judgments Noor Mohd. Co.'s case and Addl CIT v. Gem Palace [1975] 98 ITR 640 (Raj.) referred by the Hon'ble Jurisdictional High Court. However, it is observed that the set of facts involved therein appears ..... X X X X Extracts X X X X X X X X Extracts X X X X
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