TMI Blog2017 (6) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... equally undisputed that the assessee had accepted the mistake and had provided an explanation which appears plausible but the AO has not recorded a finding that the explanation furnished by the assessee was a false explanation. Thus, the explanation of the assessee, under the circumstances, cannot be said to be not bona fide. A mere omission in offering the capital gains to tax would not ipso facto reflect concealment of income or furnishing of inaccurate particulars of income in terms of Section 271(1)(c) of the Act - Decided in favour of assessee. - I.T.A .No. 6484/DEL/2013 - - - Dated:- 5-4-2017 - SHRI N. K. SAINI, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri B.K. Anand, CA For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the death of her husband, the estate having devolved upon her, the money was invested in mutual funds on the advice of the person who was assisting her husband during his life time. It was further submitted that soon thereafter, she decided to go out of India and stay with her daughters and the money invested in the mutual funds gave rise to short term capital gains but not being fully conversant either with the nature of transactions or the impact of taxation in terms of short term capital gains, there was a failure on her part to offer this income for tax in the return. It was contended before the Assessing Officer that non-inclusion of the short term capital gain was a genuine mistake on the part of the assessee rather than intent to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the mutual fund transactions at the time of original return would not be enough to warrant penalty as there was nothing to show that her bona-fide statement was not a correct one. 4. That the order of the learned authorities below being contrary to the facts and circumstances of the case and in law the appeal be allowed. 3. Ld. Authorised Representative reiterated the facts of the case and submitted that there was a genuine mistake on the part of the assessee as she was not well-versed with the financial affairs and this amounted to a reasonable cause and as such, the penalty was not imposable. Ld. Authorised Representative also filed written submissions on behalf of the assessee which are reproduced as under:- My hus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had admitted her mistake only after being confronted by the Assessing Officer and the plea of the assessee was just a lame excuse which does not hold good in the eyes of the law. Ld. DR also submitted that ignorance of law was no excuse and the assessee could not take shelter behind such an excuse. Ld. DR further submitted that the assessee had furnished an explanation whose bona fide could not be established. It was further submitted that the assessee s claim is not supported by any material on record and is just a bald argument. Ld. DR prayed that the penalty be confirmed. 5. We have heard the rival submissions and perused the material on record. The Hon ble Supreme Court, in the case of Hindustan Steel Ltd. v. State of Oriss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered from a different angle. It is important to keep in mind the fundamental legal proposition that Assessment proceedings are not conclusive. Assessment proceedings and penalty proceedings are separate and distinct. Findings in Assessment proceedings don t operate as res judicata in penalty proceedings. For this proposition reliance is placed on the decision in CIT vs. Dharamchand L. Shah (1993) 204 ITR 462 (Bom). In Vijay Power Generators Ltd vs. ITO (2008)6 DTR 64 (Del) it was held that It is well settled that though they constitute good evidence do not constitute conclusive evidence in penalty proceedings. During penalty proceedings, there has to be reappraisal of the very same material on the basis of which the addition was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imply confirmed the penalty by relying on the findings of the AO. We are of the considered opinion that this kind of finding might be very relevant in quantum proceedings but will not suffice in penalty proceedings. It is undisputed that the assessee is an old lady who was recently widowed and it was for the very first time that she was filing her return of income without being assisted by her husband. It is equally undisputed that it was not mandatory for her to maintain regular books of accounts. It is equally undisputed that the assessee had accepted the mistake and had provided an explanation which appears plausible but the AO has not recorded a finding that the explanation furnished by the assessee was a false explanation. Thus, the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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