TMI Blog2016 (1) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's appeal for the assessment year 2008-09 against the confirmation of levy of ₹ 1,38,202/- as concealment penalty. 2. The facts are that the assessee, in his return, had declared income on account of interest, LTCG and STCG. The income so declared was on account of interest and STCG and income on account of LTCG amounting to ₹ 34,98,034/- was claimed exempt, as Security Transaction Tax (STT) was claimed to have been paid thereon. During the course of assessment proceedings, the AO found that STT was paid only on an amount of ₹ 22,79,462/- and no such STT was paid on the remaining LTCG of ₹ 12,18,572/-. The assessee explained that the latter amount of LTCG was on account of switching of the securities and therefore, no STT was deducted thereon. As the assessee had claimed the whole of LTCG as exempt u/s 10(38) of the Act, the AO made an addition of ₹ 12,18,572/- being the LTCG on which the STT was not paid. This amount was held to be taxable u/s 112 of the I.T.Act. An additional tax including surcharge and cess amounting to ₹ 1,38,202/- was levied vide order dated 16.12.2010 passed u/s 143(3) of the Act. 3. In the penalty pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come as provided u/s 271(1)(c) of I.T.Act, 1961. Tax sought to be evaded on this account was ₹ 1,38,302/-. Penalty imposable under this section is a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded . In view of the circumstances discussed above, penalty amounting to ₹ 1,38,302/- is imposed which is 100% of the tax sought to be evaded. 5. The ld. CIT(A) confirmed the levy of penalty, holding as follows: I have considered the rival submissions and find that mens rea is not essential for a civil liability of penalty. Penalties under fiscal statues are for breach of civil liabilities and therefore willful concealment is not an essential ingredients for attracting civil liabilities; Union of India and others vs. Dharmendra Textile Processors, 306 ITR 277 (SC). In the instant case the appellant is having only source of income as interest and capital gains and therefore, it cannot plea ignorance on account of omission or inadvertent mistake while making such a wrong claim. The appellant has signed the return and computation of income while making such claim under long term capital gain. It is not an inadvert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been pointed out that APB 1 to 2 contain a copy of the written submission dated 16.01.2014 filed before the ld. CIT(A). It has been maintained, as before the Authorities below, that the assessee, in his return of income, had declared income on account of interest, long-term capital gain and short term capital gain; that the income declared on account of interest and short-term capital gain and on account of long-term capital gain amounting to ₹ 34,98,034/- was claimed exempt, as Securities Transaction Tax was claimed to have been paid thereon; that the AO found that STT was paid only an amount of ₹ 22,79,462/-, whereas the STT had not been paid on the remaining LTCG of ₹ 12,18,572/-; that the LTCG of ₹ 12,18,572/- was on account of switching of the securities; that it was, therefore, that no STT was deducted thereon; that the non-deduction of STT was on account of the fact that the assessee had been advised that the said investments, being long term investments, are free of tax; that the investments in question were not sold, but were redeemed by switching over; that the full details of purchase and sale of investments were provided in the return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which STT was not paid, as exempt u/s 10(38) of the Income Tax Act, 1961, the assessee is furnishing inaccurate particulars of his income within the meaning of the provisions of section 271(1)(c) of the Act, as held by the Authorities below. 9. In this regard, the Hon'ble Supreme Court, in CIT vs. Reliance Petro Products (P) Ltd. (supra), has held that making an incorrect claim cannot tantamount to furnishing of inaccurate particulars. As per this decision, merely because the assessee claimed a deduction which has not been accepted by the Revenue, penalty u/s 271(1)(c) of the Act is not attracted. It is pertinent to note that the Hon'ble Apex Court held that if the contention of the Revenue in this regard were to be accepted, the assessee would be liable for penalty u/s 271(1)(c) of the Act, in every case, where the claim made by the assessee is not accepted by the AO for any reason, which clearly is not the intendment of the legislature. In the present case, as in Reliance Petro Products (P) Ltd. (supra), no information given in the return of income filed was found to be incorrect or inaccurate. The Hon'ble Supreme Court has held that mere making of the claim, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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