TMI Blog2013 (8) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn - If the assesse chooses to ignore these important factors while filing return of wealth, he cannot escape from the ensuing results. Non-inclusion of taxable asset was a prima facie proof of furnishing of inaccurate particulars resulting in concealing the particulars of wealth - Assesse was at liberty to rebut said presumption - Explanation filed by the assesse was the deciding factor to arrive at final conclusion - During penal proceedings assesse was issued a notice asking him why penalty should not be levied - After considering the explanation filed by the assesse, AO reached at the conclusion that assesse had not included the taxable wealth in the return - As per the established principles of taxation jurisprudence non- inclusion of taxable wealth resulting in loss to Revenue had to be dealt with as per the provisions of the section 18(1)(c)of the Act. Assesse had claimed that it was under the impression that the assets in question were exempt as per the provisions of the Act. For claiming an exemption assesse had to include the asset in the return - Without including the same in the return filed it cannot claim exemption - Claims of exemption/deduction/rebate were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the submissions of the assessee,the AO finalised the assessment order,u/s.16(3) r.w.s.17 of the Act,on 25.09.2003.He computed the net taxable wealth of the assessee at Rs.20.15 Crores. He also initiated penalty proceedings u/s.18(1)(c) of the Act. 2.1. Aggrieved by the order of the AO,assessee preferred an appeal before the First Appellate Authority (FAA),who vide his order dated 15.12.2004 not only dismissed the assessee's appeal, but also directed the AO to enhance the amount of total rent from Rs. 42.62 lacs to 49.88 lacs. Assessee filed an appeal before the ITAT.Tribunal rejected the assessee's ground relating to the taxability of the asset in Wealth Tax Act and held that property was taxable as per the provisions of the Act,vide its order dated 26.09.2007. 2.2.After the receipt of the tribunal order,AO issued a fresh show cause notice to the assessee on 24.08.2008 and asked it as to why penalty u/s.18(1)(c) of the Act should not be levied for concea -ling the properties of its wealth/furnishing inaccurate particulars of such wealth.After consideri- ng the submissions of the assessee,he held that wealth relatable to the let out property had not been offered for taxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was subject matter of proceedings u/s.17of the Act,that claim made by the assessee about paying huge taxes for not levying penalty was not relevant for deciding the appeal.Finally, he held that AO was justified in imposing the penalty u/s.18(1)(c) of the Act.So, upholding the order of the AO he dismissed the appeal filed by the assessee company. 2.4. Before us,Authorised Representative (AR) submitted that assessee had shown the income from the said property under the head 'business income' in the return filed for income tax purposes,that it had shown properties valued at Rs.15 Crores in the return of wealth, that assessee was held the premises for purpose of business, that it fell within the exception clause mentioned in section 2(ae)(3) of the Act,that the assessee had a bona fide belief about the non-inclusion of the properties in question.He referred to case of Shankar Narayana Industries Plantations Pvt. Ltd.(344ITR613)delivered by the Hon'ble High Court of Karnataka as well as judgments deliver -ed by the Hon'ble Superme Court in the cases of Cement India Ltd.(124 ITR 15) and Reliance Petro Product Pvt.Ltd.(288 ITR 1).Departmental Representative(DR) submitted that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /showing lower value of an taxable asset in the return is a prima facie evidence of concealing particulars of wealth. viii). When a revised return is filed after detection of concealed wealth and such return shows higher wealth,imposition of penalty for concealment or filing inaccurate particulars is considered to be proper. ix). Bona fide belief of an assessee in treating a particular item of wealth has limited role for deciding the issue of penalty to be imposed u/s.18(1)(c) of the Act.Fact of the case decide whether a belief could be treated as bonfide or not.In the matter of V.G. Paaneerdas and Co. P. Ltd.(284ITR444)Hon'ble Madras High Court has discussed the said issue in detail. In that matter assessee was a company in which the public were not substantially interested. It was in possession of assets specified in section 40(3) of the Finance Act,1983,thereby rendering it liable to wealth-tax.In the return of wealth it did not show the value of the assets specified in section 40(3) of the Finance Act,1983.Thererfore,penalty was levied by the AO u/s.18(1)(c) of the Act. Matter travelled up to the Hon'ble High Court.Dismissing the appeal of the assessee,Hon'ble Court held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s we would like to test the facts of the case under consideration.From the facts available on the file,it transpires that during the assessment proceedings AO had made inquiries about the value of taxable assets after considering TDS certi -ficates.He issued a notice u/s. 17 of the Act,as he was of the opinion that taxable wealth had escaped assessment.Thus,it was the result of inquiry made by the AO that resulted in taxing the wealth on which tax was not paid by the assessee.Assessee,before us, is not a small time trader of a muffosil place who can take a plea of ignorance of law or lack of experts in the field of taxation.It has at its disposal services of tax experts and professionals. In our opinion law about the properties-in-question,for the year under consideration,was unambiguous.In spite of clear mandate of provisions of law and available legal tax assistance,if the assessee choose not to include the taxable wealth in the statement of wealth it has to face the consequence of such non- inclusion. Before us,AR had argued that assessee had shown wealth of 15 Crores in its return and there was no mala fide intention in not including the remaining assets.We are of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secondly,the assessee must have furnished inaccurate particulars of his income.The meaning of the word "particulars" used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision,the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee,because that is the only document where the assessee can furnish the particulars of his income.When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct,not according to the truth or erroneous.Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agree that the assessment and penalty proceedings are different.During penal proceedings, assessee was issued a notice asking him why penalty should not be levied.After considering the explanation filed by the assessee,AO reached at the conclusion that assessee had not included the taxable wealth in the return. As per the established principles of taxation jurisprudence non- inclusion of taxable wealth;resulting in loss to Revenue;has to be dealt with as per the provisions of the section 18(1)(c)of the Act.Assessee has claimed that it was under the impression that the assets in question were exempt as per the provisions of the Act.In our opinion,for claiming an exemption assessee has to include the asset in the return.Without including the same in the return filed,it cannot claim exemption. Claims of exemption/deduction/rebate are not to be decided by the assessees-it is the job of the AO to entertain or rejects such claim as per the provisions of the Act.Twin factors essential for levying penalty u/s.18(1)(c) of the Act,as mentioned at paragraph 2.5.iv.,very much exists in the case under consideration. In our opinion non-inclusion of taxable asset is a prima facie proof of furni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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