TMI Blog2015 (11) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... of income under which the income is offered to tax. The taxation of the receipt is changed to the head of income 'other sources' from the head of income 'capital gain'. We are of the considered opinion that the explanation filed by the assessee is bona fide. This is a case of a bona fide mistake on part of the assessee. All the information has been disclosed in the income tax return filed by the assessee. Income had been offered under the head 'capital gain' T.D.S. Under these circumstances, we cancel the penalty levied u/s 271(1)(c) of the Act - Decided in favour of assessee. - ITA No. 1423 /Del/2013 - - - Dated:- 21-7-2015 - J S Reddy, M And A T Varkey, JM For the Appellant : Dr Rakesh Gupta, and Shri Somil Aggarwal, CA Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond jurisdiction and barred by limitation and contrary to the principles of natural justice and has been passed by recording incorrect facts and findings and without giving adequate opportunity to the assessee and the same is not sustainable on various legal and factual grounds. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing a penalty of ₹ 12,00,000/- and that too without recording mandatory satisfaction as per law. 2. The brief facts of the case as stated in assessment order are as under: As per computation of income furnished by the assessee he has shown Income from Long Term Capital Gain on sale of NHB Bonds. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 3. Penalty was levied u/s 271(1)(c) by the A.O. and confirmed by Ld. CIT(A). Before us, Dr. Rakesh Gupta, and Shri Somil Aggarwal, CA, Ld. counsels for the assessee and Shri K. K. Jaiswal, Sr. Department Representative were present and submitted their contentions. 4. We have heard rival submissions and on careful consideration we hold as follows:- In the present case, the assessee offered to tax, the income from the sale / maturity of National Housing Bond under the head long term capital gain. The A.O. chooses to tax the same under ht head 'income from other sources'. The interest of all the three years was offered to tax in the year of maturity and not year-wise. In my view, this is just change in the head of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) is a civil liability. (b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. (c) Willful concealment is not an essential ingredient for attracting civil liability. (d) Existence of conditions stipulated in section 271(1)(c) is a sine qua non for initiation of penalty proceedings under section 271. (e) The existence of such conditions should be discernible from the assessment order or the order of the appellate authority or the revisional authority, (f) Even if there is no specific finding regarding the existence of the conditions mentioned in section 271(1)(c), at least the facts set out in Explanation 1(A) and 1(B) it should be discernible from the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. (n) The direction referred to in Explanation 1(B) to section 271 of the Act should be clear and without any ambiguity. (o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the assessing authority, (p) Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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