TMI Blog2013 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... a case attracting penalty u/s 271(1)(c) – In favour of assessee - ITA No.997 & 998/Mds/2012 - - - Dated:- 12-10-2012 - N.S. Saini and S.S. Godara, JJ. Appellant Rep by: Shri Raghavan Ramabhadran, Adv. Respondent Rep by: Shri Guru Bashyam, JCIT ORDER Per: Bench: These two appeals filed by different assessees have been preferred against different orders of the Commissioner of Income Tax (Appeals), Tiruchirapalli dated 21.03.2012 passed in ITA No. 119/2010-11 and ITA No. 119/2010-11 respectively; for the assessment year 2007-08, confirming penalty under section 271(1)(c) of the Income Tax Act 1961 [in short the Act ]. For convenience and brevity, we take up I.T.A.No. 997/Mds/2012 as the lead case. I.T.A.No. 997/Mds/2012 : 2. Brief facts of the case are that the assessee had filed return for the impugned assessment year on 03.12.2007 and admitted income of Rs.12,79,230/- along with agricultural income of Rs.60,000/-. Thereafter the assessee filed a revised return on 04.06.2008. It is noticed from the assessment order that this time as well, the total income and agricultural income remained same. In scrutiny proceedings, the Assessing Officer took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer held that impugned penalty is a civil liability and willful concealment is not an essential ingredient. Accordingly, penalty on a sum of Rs.11,25,220/- was imposed by the Assessing Officer vide order dated 16.06.2010. We also find that the CIT(A) has further confirmed the penalty imposed by holding as follows: 6. The Assessing Officer in his penalty order has stated that the appellant has filed original return of income on 03.12.2007 who has not disclosed the capital gain earned. The appellant filed a revised return on 04.06.2008 which itself is not a valid revised return as the original return was not filed within the time limit prescribed u/s 139(1). Even in the revised return the appellant has shown capital gains at Rs. 1,82,567 on the basis of the sale consideration stated to be actually received. The assessing officer has made out a clear case against the appellant by stating that he has not declared the capital gains in the original return of income, which itself was not filed within due date. The Assessing Officer has also rejected the appellant's claim that he is innocent or ignorant' of the guideline value on the ground that being a seller the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the revised return of income filed subsequently. The appellant has not voluntarily brought to the notice of the department that the value for stamp duty was higher than the consideration declared in the registered deed. The main issue in this case is that the appellant even in his revised return has not shown the correct value of the property determined under Section 50C and shown only lesser capital gain which tantamounts to furnishing of inaccurate particulars of income. Since the appellant has not availed a great opportunity for showing true and correct value of the property as determined U/S 50C even in the revised return of income filed by him which showed deliberately a lesser short term capital gain at Rs.1,82,567. Since the appellant has missed this opportunity the action of the Assessing Officer in adopting the value of the property sold by the appellant for working out short term capital gain at 133,42,900 U/S 50C of the Income Tax Act, 1961 is judicious and apt and therefore the action of the Assessing Officer in levying penalty u/s 271(1)(c) is confirmed. The objections filed by the appellant are rejected. 9. In the result the appeal is DISMISSED. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides at length and also perused the relevant findings as well as case law referred to. The moot issue before us as it arises for consideration in the instant case is whether the CIT(A) has rightly confirmed the penalty imposed under section 271(1)(c) of the Act by the Assessing Officer merely on the ground that as per the guideline value adopted under section 50C(2) of the Act , the actual sale price of the assessee s property sold turned out to be less than guideline value resulting in addition during assessment proceedings? 7. It emerges from the record that the assessee had filed revised return of income which was processed under section 143(1) of the Act by the Assessing Officer and the assessment was finalized under section 143(3) of the Act vide order dated 21.12.2009 (supra). This whole chronology of the events makes it clear that the assessee s revised return stood duly accepted and finalized by the Assessing Officer. The only addition made by the Assessing Officer was that the consideration as disclosed by the assessee qua the property sold was found to be less than the guideline value, which was Rs.95,40,000/- instead of Rs.28,54,200/- as mentioned by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition on the basis of valuation made by the Stamp Valuation Authority would not be a conclusive proof that the sale consideration as per this agreement was incorrect and wrong. Accordingly the addition because of the deeming provisions does not ipso facto attract the penalty u/s 271(1)(c). Hence in view of the decision of the Hon ble Supreme Court in the case of CIT V/s Reliance Petroproducts Pvt.Ltd (supra), the penalty levied u/s 271(1)(c) is not sustainable. The same is deleted. 9. The appeal of the assessee is allowed. The same law has been reiterated in cases cited by the assessee namely Shri Chimanlal Manilal Patel vs. ACIT and DCIT vs. M/s. Japfa Comfeed India Private Limited (supra). 8. Although not cited by any of the parties, we also deem it appropriate to refer here the case law of the Hon ble Supreme Court as reported in K.P. Varghese vs. ITO (1981) 131 ITR 597, wherein it held that for the purpose of computation of capital gains under section 52 of the Act , it has to be necessarily proved that the assessee had received the amount more than what is declared or disclosed as consideration. Their Lordships had also been pleased to observe that the burden on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate particulars of his income, it is mandatory upon the Assessing Officer to levy penalty under section 271(1)(c) if a claim is made which is held to be unsustainable in law. The Supreme Court merely stated that willful concealment is not an essential ingredient for attracting a civil law liability under section 271(1)(c) read with the explanation thereto. In other words, all that the judgment holds is that the concealment need not be willful to attract penalty. However to attract the provisions of section 271, the assessee must be held to have concealed the material particulars or to have furnished inaccurate particulars. At the cost of repetition in the present case, there was no concealment of any material particulars by the respondent. Nor did the respondent furnish inaccurate particulars. The respondent disclosed all material particulars and on the basis thereof, made certain claims which have been found purely as a question of law to be not sustainable. In the present case, Explanation 1(B) is inapplicable. This is in view of the fact that it is an admitted position that the respondent has neither concealed any particulars of income nor furnished inaccurate particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X
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