TMI Blog2012 (11) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) of the Income Tax Act is justified? 4. The assessee derived income from the business of running Travel Agency in the name of Travel Bureau. He filed income tax return on 30.10.2002, declaring income of ₹ 16,42,688/- which included long term capital gain (LTCG) of ₹ 14,24,430/-. He also claimed exemption under Section 54-F of the Act. A revised return was filed by him, declaring income from capital gain, as income from other sources. The LTCG claimed in the original return along with exemption under Section 54-F and capital gain of ₹ 14,24,430/- was surrendered as income from other sources. His revised return was accepted, after computing the income, in which ₹ 14,27,286/,- out of total income of ₹ 31,03,353/- brought to tax, was shown to be income from other sources. 5. In the proceedings for penalty, after narrating the necessary facts, the AO observed as follows:- The fact of the case is that assessee showed his own unaccounted money as income from long term capital gain and tried to evade tax by claiming exemption 54-F of the IT Act, 1961. Assessee himself submitted the bogus entries of long term capital gain transactions and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the AO. Even the AO knowing it well that penalty proceeding is distinct from the assessment proceeding, did not take any pain to collect evidence to prove share transaction being sham one before deciding to levy penalty. She has simply relied on the case law CIT v. India Metals Ferro Allloys Ltd. [1994] 117 CTR (Ori.) 378. Only after quoting from the above decision, she has immediately arrived to the conclusion that the assessee has furnished inaccurate particulars of his income and thereby has concealed his correct particulars and is, therefore, liable for imposition of penalty u/s 271(1)(c). No details has been given as to what inaccurate particulars were furnished by the assessee and what details were available with the AO, which were considered by her to arrive at the conclusion that the share transaction shown by the assessee were sham one. 8. The department preferred an appeal in the Tribunal. The Tribunal considered the questions raised by the revenue in detail, and discussed almost entire case on the subject before arriving at the findings, in paras 9.20, 9.21 and 9.22, as follows:- 9.20 In the light of above discussions, if we consider the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s escaped assessment within the meaning of section 147 read with Expn 2(c) of the I.T. Act, 1961. Issue notice u/s 148.' 9.21 Under the above admitted facts and circumstances, can it be said that the revised return filed by the assessee on 27.09.2004 is a bona fide and voluntary return. The department has already come to know on 09.02.2004 that 17000 shares claimed to have been transacted by the assessee upon are of the same company in which the assessees have accepted that the share transaction was a sham one and in fact represented assessee's own income from other sources which has been introduced in the garb of Long Term Capital Gain. The assessee keeps silence since 31.10.2002 to 09.02.2004. He came into action only when a notice under section 148 received by the assessee. It is also equally important to note that claiming exemption of income under section is a conscious decision of the assessee as such claims are claiming after observing and after complying certain procedures and formalities of the Act. Thus under the circumstances under which the assessee surrender income by filing revised return means admission by the assessee that whatever stated by the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with overall conduct of the assessee would definitely be a pointer to the factum of the assessee having indulged in an act of concealment of income in the form of bogus/sham share transactions claiming exemption under section 54F and introducing own unaccounted income in garb of long term capital gain. On the cost of repeatation we may again stated here that share transactions are required more intention and concious decisions by an assessee as these transactions are required more intention and concious decisions by an assessee as these transactions are bonded by various provisions of various Acts then transitions of other type of goods and items. Assessee having willfully shown bogus long term capital gain on sham transaction of shares in the original return of income filed by him and he has claimed exemption against that income under section 54 F of the Act. By not offering an amount to tax and by claiming wrong deduction under s. 54 F and offered these amounts to tax only in response to notice under s. 148, there was concealment of particulars filing inaccurate particulars of income attracting penalty under section 271(1) (c) of the Act. Under the circumstances, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant voluntarily and before any detection by the department and prior to disclosure of result of any of the alleged inquiry undertaken by the Assessing Officer? 11. Sri Rahul Agarwal has also relied on judgment of Punjab Haryana Court in CIT v. Rajiv Garg [2009] 313 ITR 256; judgment of this Court in CIT v. Saran Khandsari Sugar Works [2000] 246 ITR 216; Judgment of Madhya Pradesh High Court in CIT v. Suresh Chandra Mittal [2000] 241 ITR 124and the Judgment of the Apex Court in CIT v. Suresh Chandra Mittal [2001] 251 ITR 9, in which penalty under Section 271 (1) (c) of the Act was set aside by the High Courts and the Supreme Court. 12. It is submitted that the assessee had voluntarily surrendered the income and that his revised return was accepted, without any objection and thus imposition of penalty was wholly unjustified. The CIT (Appeal) gave good and sufficient reasons to allow the appeal. The CIT (Appeal) held that the line written in the penalty order by the AO that the assessee submitted that he does not have any detail, information to be given in compliance to notice u/s 142 (1) issued with detailed questionnaire is not born out from the record available in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT (A) nowhere stated that the questionnaire issued along with the notice under Section 142 (1) was not available in the record. The CIT (A) has made such observations, without considering the records, and the facts and circumstances of the case. He has relied upon a decision of this Court in CIT v. Rakesh Suri [2011] 331 ITR 458 in which almost in similar circumstances, the penalty was held to be imposed validly in accordance law. 16. In all the cases relied on by Sri Rahul Agarwal there was an explanation given by assessee. In the present case there is no explanation whatsoever, for submitting inaccurate particulars and of concealment of income. The circumstances, in which the income was surrendered on the pretext of buying peace have not been explained. The findings of the CIT (A), that the penalty could not be imposed, was thus not sustainable. 17. We find that the Tribunal has given sufficient reasons, and has considered the entire facts and circumstances in arriving at a finding that unless the explanation is found to be satisfactory, and by which the assessee may prove his bonafides, the penalty can be imposed, invoking Section 271 (1) (c) of the Act. 18. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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