TMI Blog2014 (8) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in para 4 to Explanation/Reply dated 04.03.2011 reproduced hereinabove is against the facts of the case and is not a return u/s 139(4) of the Act. On this count, the return filed by the assessee is a non est return. The assessee in the same explanation had claimed the return to have been filed in response to notice u/s 148 of the Act. The fact that notice in the present case has been issued on 15.02.2010 and served on the assessee on 18.02.2010 and the assessee filed the return on 18.02.2010. If the return is treated to have been filed after service of notice u/s 148 of the Act, then the fact that the return has been filed when the income tax department detected the concealment of income. No cogent explanation has been submitted by the assessee to substantiate the claim of not filing the return voluntarily. The assessee was short of finances and therefore, did not deposit the tax with the Income tax Department, cannot be a sufficient explanation. The issuance of notice u/s 148 and in the facts and circumstances of the present case, as mentioned hereinabove, the assessee was aware of the fact in the assessment of the firm M/s. Bedi Automobiles by virtue of issuance of noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be sold @ 23,00,000/- per acre to prove the investment of ₹ 37,00,000/-. Perusal of the copy of the said sale agreement reveals that it does not prove to be a genuine agreement due to the following: The agreement for sale of land was executed between Smt. Bhupinder Kaur W/o Sh. Maninder Pal Singh (seller) and Sh. Surjit Singh S/o- Sh. Bir Singh, (purchaser) r/o- Mehli Gate, Phagwara. The said agreement has not been signed by the purchaser party i.e. Sh. Surjit Singh, S/o- Shri Bir Singh, but it was signed by one Shri Mohan Singh on behalf of Sh. Surjit Singh. Moreover, Shri Mohan Singh was not having any power of attorney from the said Shri Surjit Singh to sign on his behalf of the said agreement. Moreso, as per sale deed the property was sold to Sh. Jai Dev Singh S/o- Shri Shiv Singh R/o- Village Rampur Sunra, Tehsir Phagwara, Distt. Kapurthala. As such, the agreemtn was not a genuine agreement in the eyes of law. 2.1 Keeping in view aforesaid facts the AO observed that it is established that the assessee has actually sold the said agriculture land for ₹ 11.90 lacs only as per actually sale deed and not @ ₹ 23 lacs per acre as per the aforesaid agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taxable income. It is a case where return is filed late, not within stipulated time u/s 139(1) or 139(4) I. Tax Act. Cause for the delay is bona fide belief that Income is not liable to exceed the taxable limit excluding the Income arises from sale of agricultural land situated outside Municipal limit. Thereafter financial shortage causes delay in submitting the Income tax return. Your kind attention is invited to the provisions of sec. 271(1)(c) Income Tax Act. Penalty cannot be imposed in following circumstances:- Where assesses has concealed the particulars of his Income or furnished inaccurate particulars. I have not concealed any Income in my Income Tax return filed in response to notice u/s 148/Tax. I have not furnished any inaccurate particulars in my income. I have not furnished any explanation in my Income Tax Return and in the course of assessment proceedings, which is found to be false. Income declared is accepted as declared in Income Tax return. From facts of the case there is no concealment, which attract penalty u/s 271(1)(c) of the Income Tax Act. My intentions are very clear from the day, I deposited ₹ 45,000/- as advance tax, payment of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cealed income as its own income and the fact that the revised returns were filed only after the issuance of notice under Section 148, and that too, when the I. T. Department was able to lay hands on evidence and documents incriminating to the assessee from where extra income could be proved, considering the material on record and the entirety of the circumstances and the fact that there was a difference of income between the original returned income and the revised returned income and no particular of item of income had been pointed out to explain that the revised returns were merely the result of inadvertent mistake or omission, coupled with the statements of the partners of the assessee firm as also the submissions made by the learned authorized representative before the AAC there is no escape but to hold that the assessee had concealed the particulars of income by filing original returns and that the imposition of penalties in the case of the assessee was called for and the penalties sustained by the AAC were rightly imposed under the law. 7. As such, the assessee is treated as to have concealed the particulars of income to the extent of ₹ 26,85,900/-, thus making it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment and penalty proceedings that the assessee has disclosed this income (Rs. 25,10,000/-) to be peace of mind as income from other sources. The assessee throughout the assessment and penalty proceedings has taken the stand that the income of ₹ 25,10,000/- has been earned from the sale of agricultural land and was not taxable as per provisions of Income Tax Act, 1961 but to by peace of mind, the income earned apart from mentioned in the sale deed of the agricultural land has been offered for tax as income from other sources. According to the assessee as the particulars of land mentioned in the agreement to sell and in the sale deed are same, it cannot be said that the assessee has earned income from any other source apart from sale of agricultural land unless and until it is proved beyond doubt. To substantiate his claim, the assessee has also produced the copy of agreement to sell as evidence which has not been accepted as genuine by the Assessing Officer in which sale consideration of the land was mentioned at ₹ 37,00,000/-. The assessee has also taken the plea that she has not revised any return of income but the return for the year under consideration has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtainly, the case of the assessee does not fall under the provisions of Explanation 1 Explanation 2 to Section 271(1)(c) of the Income Tax Act, 1961 as the returned income has been accepted by the Assessing Officer while completing assessment/reassessment and no separate addition/disallowance has been made. Although the Assessing Officer has not invoked the provisions of Explanation 3 to Section 271(1)(c) of the Income Tax Act, 1961 specifically but it appears that he levied penalty in the case of the assessee by invoking the provisions of this explanation which reads as under:- Explanation 3: Where any person fails, without reasonable cause, to furnish within the period specified in sub-section (1) of Section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing or of after the last 1st day of April, 1989 and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of subsection (1) of section 142 or section 148 and the Assessing Officer or the Commissioner (Appeals) is satisfied that in the respect of such assessment year such person has taxation income, then, such pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-s (1) of s. 153 of the Act is clearly not satisfied. As discussed earlier, the conditions for applicability of Expln. 3 to s. 271(1) are commutative and each of the conditions has to be established for the purpose of invoking the said provision. In the present case, all the conditions are not cumulatively satisfied the failure on the part of the petitioner to furnish the return of income within the specified period, therefore, cannot be deemed to be concealment within the meaning of the Extn. 3 to s. 271(1)(c) of the Act. 15. In the light of the aforesaid, it is apparent that the case of the petitioner, does not fall within the ambit of Expl. to s. 271(1) of the Act and as such, no penalty could be levied on the petitioner under s. 271(1)(c) of the Act for concealment of particulars of his income on the ground that the petitioner had failed to furnish return of income for the year under consideration. 6.9 In view of the above stated facts and in the circumstances of the case, I am of the considered opinion that the case of the assessee does not fall under any of the provisions of section 271(1)(c) of the Income Tax Act, 1961 and the penalty has been levied without taking in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntarily. This act of the assessee by depositing tax on 3.2.2010 of ₹ 2.25 lacs makes it evident that it was in the knowledge of the assessee that he has concealed the income and that is the reason that he has filed the return of income on 18.02.2010. In any case, the Ld. DR argued that it is not a voluntarily return and therefore, the ld. CIT(A) is not justified in canceling the penalty. 6. On the other hand, the ld. counsel for the assessee, relied upon the order of the Ld. CIT(A) and the decision of the Hon ble Punjab Haryana High Court in the case of CIT vs. Rajiv Garg Ors, reported in (2009) 323 ITR 256. 7. We have heard the rival contentions and perused the facts of the case. In the present case, the main issue is whether the return filed by the assessee is a return u/s 139(4) or in response to notice u/s 148 of the Act and second issue related to the first issue with respect to the levy of penalty u/s 271(1)(c) of the Act, is whether return filed is voluntarily return or not. In this regard, there is no dispute to the fact that the assessment in the case of M/s. Bedi Automobiles in which the assessee is a partner was made much before the issuance of notice u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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