TMI Blog2016 (9) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... For The Respondent : Mr. S. S. Kumaran, DR ORDER PER SANDEEP GOSAIN, JM : The present appeal has been filed by the Revenue against the order of the learned CIT (A)-31, Mumbai dated 17-07-2014 passed in appeal No.CIT(A)-31/IT-37/ACIT-20(3)/2012-13 for assessment year 2006-07 wherein the learned CIT (A) has confirmed penalty of ₹ 6,93,053/- levied by the Assistant Commissioner of Income Tax -20(3), Mumbai u/s 271 (1) (c) of the Act , on the following grounds:- 1. The Commissioner of Income Tax (Appeals -31 (hereinafter referred to as the CIT (A)) erred in confirming penalty of ₹ 6,93,053 levied by the Assistant Commissioner of Income-Tax- 20(3), Mumbai (hereinafter referred to as the Assessing Officer) under section 271 (1) (c) of the Act. The appellant contends that on the facts and in the circumstances of the case and in law, the Assessing Officer ought not to have levied the impugned penalty under section 271 (1) (c) of the Act. 2. The CIT (A) erred in confirming action of the Assessing Officer in levying penalty on the basis of income-tax including surcharge and education cess. The appellant contends that surcharge on income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. All the grounds of appeal raised by the assessee are interrelated and interconnected; therefore, we deem it appropriate to adjudicate the same together after hearing the learned Counsels of both the parties and also careful perusal of the materials placed on record as well as the orders of the Revenue authorities. It is important to mention here that the learned CIT (A) while upholding the penalty levied by the AO for ₹ 6,93,053/-271 (1) (c) of the Act has also discussed the order passed by the Tribunal in quantum proceedings. Therefore, before deciding the issue, it is necessary to refer to the order of the Tribunal passed in appeal being ITA No.2081/Mum/2011 dated 20-08-2013 for assessment year 2006-07. The relevant portion of the said order is reproduced herein below:- 7.2 Referring to the above order of the CIT (A) it was the submission that there is no basis for treating the amount of purchase at ₹ 22,48,000/- and confirm the addition as the assessee got the shares transferred into demat account by 31.03.2005, which fact was also accepted by the Ld. CIT (A). If the shares are purchased as alleged by the CIT (A) then, the addition of the amount cannot be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant was unable to adduce any evidence to substantiate the date of purchase of shares as being 02.04.2004. Thus it is clear that in this case the appellant has neither furnished accurate particulars of income in her return nor has furnished any bona-fide explanation nor been able to substantiate the claims made in relation to the sum claimed to be long-term capital gains . It is also pertinent to note that the masking of the receipts as long term capital gains by claiming a period of holding that was not substantiated, directly impacted the tax liability of the appellant. In other words, the appellant sought undue advantage by seeking to declare as long term capital gains what was held by the ITAT to be short-term capital gains . There is therefore clear indication of concealment of income and of furnishing of inaccurate particulars. That being so, I view of the entire conspectus of facts of the case that judicial pronouncements discussed above, the penalty of ₹ 6,93,053/- u/s 271 (1) (c) is upheld and the ground raised by the appellant is dismissed. 6. After conjoint reading of the orders mentioned above as well as after hearing both the parties, we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT Vs. Atul Mohan Bindal [317 ITR 1 (SC)] wherein the Hon ble Apex Court discussed the judgment rendered in the case of Rajasthan Spinning and Weaving Mills [254 CTR 1] and held that for applicability of section 271 (1) (c) of the Act, the conditions stated therein must exist. These conditions are that the assessee should have concealed the particulars or income or furnished inaccurate particulars of such income before the penalty u/s 271 (1) (c) can be levied. From the facts before us, we have noted that the assessee has made a claim before the AO on disclosed facts which has not been accepted by the AO. Thus, when there is full disclosure of particulars of income by the assessee, it cannot amount to concealment of income and/or furnishing of inaccurate particulars of income and the addition made on account of income from long term and/or short term capital gains is legal in nature and as such penalty is not warranted. Even otherwise, as per Explanation (1) to Section 271 (1) (c) of the Act cast a duty on the AO to first record reason that there has been concealment and then seek explanation from the assessee and once the AO finds the explanation of the assessee to be f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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