TMI Blog2017 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... above attempts were neither bonafide mistakes nor silly ones so as to be condoned. We thus conclude that the learned CIT(A) has rightly confirmed the impugned penalty in above narrated facts of the case. - Decided against assessee. - ITA No. 716/Ahd/2016 - - - Dated:- 27-4-2017 - SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For The Assessee : Shri M. K. Patel, A.R. For The Revenue : Smt. Anita Suresh Hardasani, Sr. D.R. ORDER PER S. S. GODARA, JUDICIAL MEMBER This assessee s appeal for assessment year 2011-12 arises against the CIT(A)-5, Vadodara s order dated 17.12.2015, in appeal no. CAB/5- 340/2014-15, affirming Assessing Officer s action in imposing penalty of ₹ 3,06,548/- in order dated 23.09.2014, in proceedings u/s.271(1)(c) of the Income Tax Act, 1961, in short the Act . 2. We come to the relevant facts. This assessee filed his return on 29.03.2012 stating income of ₹ 10,04,760/-. The same was summarily processed. The Assessing Officer issued scrutiny notices thereafter. We notice from para 5 of assessment order dated 16.03.2014 that he issued Section 142(1) notice dated 08.10.2013 specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncealment of income to impose the impugned penalty of ₹ 3,06,548/-. 5. The CIT(A) upholds Assessing Officer s action as under: 5.3 I have considered the facts and the circumstances of the case, the observations of the Assessing Officer, material available on the record and the judicial pronouncements on the subject. In this case, the assessee had omitted to offer LTCG of ₹ 19,39,327/- on transfer of two plots of land, to tax and has claimed that the mistake was inadvertent and there was no intention to conceal the particulars of income. The assessee has submitted that the error in the Return of Income crept in because the consideration on sale of the properties was received by him in the immediately preceding year, whereas the properties were registered during the year. Since the consideration for transfer of the properties was received in A.Y. 2010-11, the assessee forgot to offer the LTCG in the year under consideration as the sale deed was registered during the year. However, it was observed that the assesee had failed to offer the LTCG in the Return of Income for A.Y. 2010-11 also. The assessee has submitted that as as soon as the mistake was brought to his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of which inaccurate particulars have been, filed. The argument that the penalty proceedings are quasi-criminal in nature and inference of mens rea is necessary. This view is also not tenable in view of the decision of Hon'ble Supreme Court in CIT vs Kalyandas Rastogi, 193 ITR 713 (SC), where Hon'ble Supreme Court held that a penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in nature and is far different from penalty for a crime. In this kind of penalty, element of mens rea is not required. In Union of India vs Dharmendra Textile Processors [2008] 166 Taxman 65 (SC), Hon'ble Supreme Court reiterated this position and held that penalty u/s 271(1)(c) is a civil liability and for attracting such civil liability, willful concealment is not an essential ingredient as is case in the matter of prosecution u/s 276C. 5.6 In this case, the assessee has not surrendered the LTCG of ₹ 67,87,271/- voluntarily. However, even if it was voluntary, the same would not have protected the assessee from the consequences of section 271(1)(c), in view of the decision of Hon'ble Supreme Court in MAK Data P. Ltd. vs CIT [2013] 358 ITR 593 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, if would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. 5.7 Hon'ble IT AT, Rajkot Bench has also held in the case of Pawan Construction vs ITO [2001] 78 ITD 176 (Rajkot) that where the assessee had surrendered cash creditors after detection of the same being unexplained, to buy peace of mind, penalty u/s 271(1)(c) was valid. Similar views have been held by Hon'ble Allahabad High Court in the cases of Standard Hind Co. vs C1T [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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