TMI Blog2014 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Reliance Petroproducts P. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - Mere making of a claim which was ultimately found to be unsustainable may not by itself amount to furnishing of inaccurate particulars regarding the income - Decided against Revenue. - ITA No. 428 of 2009(O&M) - - - Dated:- 16-8-2013 - MR. AJAY KUMAR MITTAL AND MR. JASPAL SINGH, JJ. For the Appellant : Present:- Mr. Vivek Sethi, Advocate For the Respondent : Mr. Ravish Sood, Advocate Ajay Kumar Mittal J.- 1. This order shall dispose of I. T. A. Nos. 427 and 428 of 2009, as, according to the learned counsel for the parties, the facts and the law point involved in both the appeals are identical. However, the facts are being taken from I. T. A. No. 428 of 2009. 2. I. T. A. No. 428 of 2009 has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (in short, "the Act"), against the order dated February 27, 2009, annexure A. 7 passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal"), in I. T. A. No. 324 (ASR)/2007, for the assessment year 1996-97. Both the appeals were admitted on May 3, 2010, to consider the following substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond 8 kms. from the municipal limits of Sonepat and claimed exemption from capital gains tax. The assessee produced a letter dated June 19, 1996, from SDE, Maintenance Sub Division PWD (B R), Sonepat, in this regard. The Assessing Officer also independently inquired from the Land Acquisition Collector, Haryana, Faridabad, as well as the Divisional and Town Planner, Haryana, regarding the distance of the land of the assessee from the municipal limits of Sonepat. After collecting information regarding the distance from various authorities, the Assessing Officer came to the conclusion that the impugned property was situated within 8 kms. of municipal limits of Sonepat. Thereafter, the Assessing Officer on the basis of this conclusion asked the assessee, vide letter dated October 13, 1998, to show cause as to why the amount of capital gains be not treated as shortterm capital gains liable to capital gains tax under the Act. The assessee submitted its reply dated November 26, 1998, stating that exemption was sought on the basis of certificate obtained from the PWD authorities Sonepat and as such the property could not be treated as capital asset for the purpose of determination of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that an addition of Rs. 17,11,065 was sustained in the income of the assessee on account of capital gains arising from acquisition of agricultural land which was within 8 kms. from the municipal limits of Sonepat. It was urged that the Assessing Officer had rightly levied penalty under section 271(1)(c) of the Act as the assessee had furnished inaccurate particulars inasmuch as certificate furnished by the assessee that the land was beyond 8 kms. from the limits of the Municipal Committee, Sonepat, was not correct. Relying upon the judgment of the apex court in Dharamendra Textile Processors' case (supra), it was submitted that the Commissioner of Income-tax (Appeals) as well as the Tribunal were in error in deleting the penalty. 5. Opposing the prayer made by learned counsel for the Revenue, learned counsel for the assessee, besides supporting the order passed by the Commissioner of Income-tax (Appeals) and the Tribunal, submitted that the assessee had appended photo copy of the cheque received from the Land Acquisition Collector dated November 22, 1995, and the certificate dated June 19, 1996, obtained from the Sub Divisional Engineer, PWD wherein it was shown that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income. 20. We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars." 6. After hearing learned counsel for the parties, we do not find any merit in these appeals. 7. The Tribunal, while upholding deletion of penalty by the Commissioner of Income-tax (Appeals), noticed that the assessee had furnished a certificate dated June 19, 1996, from the Sub Divisional Engineer Maintenance Sub Division, B R wherein it was specified that the distance from the Sonepat Municipal Committee to Village Kamaspur, Tehsil and District So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt, in the original assessment proceedings for computing the tax the evidence with the Assessing Officer may be a good item of evidence but not in the penalty proceedings. Further, it is to be noted that very mere fact the explanation of the assessee was found to be false in the assessment, but for levy of penalty there should be material to establish that the assessee had consciously concealed the particulars of income or had deliberately furnished inaccurate particulars of income. In the present case, penalty has been levied on the basis of rejection of the explanation/certificate given by the assessee regarding distance of the property from the Municipal limits of Sonepat. On the facts set out above, we find that the inference drawn by the Assessing Officer that the assessee has consciously concealed the particulars is not based on the falsity of the explanation given by the assessee. We are saying this because the Assessing Officer though collected the multiple certificates which are sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere continuance of the assessment proceedings and did not bother to make its penalty proceedings as self-contained one, as such penalty order is not sustainable. Mere cross-reference to the compliance to levy penalty and the Assessing Officer is duty bound to consider the entire material at the item or levying the penalty afresh, independently of the assessment proceedings to levy penalty. This has not been done by the Assessing Officer. As such, penalty cannot be sustained. The evidence on record has not spelt out a case of penalty ambiguously and as such penalty cannot be levied. Hence, we confirm the deletion of penalty." 8. Further, this court in Sidhartha Enterprises's case (supra) held as under (page 82 of 322 ITR) : "The judgment of the hon'ble Supreme Court in Dharamendra Textile (supra) cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. What has been laid down is that qualitative difference between criminal liability under section 276C and penalty under section 271(1)(c) had to be kept in mind and approach adopted to the trial of a criminal case need not be adopted while considering the levy of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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