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2017 (6) TMI 775 - ITAT DELHI

2017 (6) TMI 775 - ITAT DELHI - TMI - Penalty u/s 271(1)(c) - Omission in offering the capital gains to tax - Held that:- The penalty order is woefully silent on the issue as to how this satisfaction of concealment/furnishing of inaccurate particulars was arrived at. The Ld. CIT (A) has also not examined the issue in detail but has simply confirmed the penalty by relying on the findings of the AO. - It is undisputed that the assessee is an old lady who was recently widowed and it was for the .....

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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 The Respondent : Shri Umesh Chander Dubey, Sr. DR ORDER PER SUDHANS .....

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271(1)(c) of the Act were initiated and it was noted by the assessing officer that assessee had failed to disclose the short term capital gain of ₹ 23,25,566/- and when confronted by the Assessing Officer with the same, the assessee had offered the same for taxation. The Assessing Officer further observed that the assessee did not file any revised return, nor was the offer for taxation voluntary. The assessee had contended before the Assessing Officer during the course of penalty proceedin .....

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n 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 c .....

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ing grounds of appeal:- 1. That on the facts and circumstances of the case the learned CIT (Appeal) erred in confirming the penalty order in respect of penalty of ₹ 7,82,787 levied on the assessee u/s 271 (1)(c) of the Act. 2. (i) That the learned CIT (Appeal) erred in not holding that the penalty notice dt. 17.02.2008 issued by the AO was prima-facie an invalid notice as a did not bear the office seal of the officer nor did it convey the default for which penalty proceedings had been init .....

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at a mere failure on part of the assessee to substantiate her bona-fide statement narrating all the facts relating to the mistake in reporting 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 Representativ .....

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looked after by him. After his death I had no close relatives to help and I went to Canada to stay with my two married daughters. My income tax returns were filed by Mr. B.K. Anand, Chartered Accountant. I operated a savings account and also, had given money to the Standard Chartered Bank for investment in mutual funds. Though, bank statements had been received no statement of purchase and sale of mutual funds had been sent by Standard Chartered Bank to me. At the time of filing returns whateve .....

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oncealment wilfully and the omission was due to my ignorance and lack of experience. I request that I may be forgiven because the omission of not including capital gains in my return was not deliberate but due to lack of experience. 3.1. Ld. Authorised Representative prayed that the penalty imposed be kindly deleted. 4. In response, the Ld. DR submitted that the assessee had admitted her mistake only after being confronted by the Assessing Officer and the plea of the assessee was just a lame exc .....

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erused the material on record. The Hon ble Supreme Court, in the case of Hindustan Steel Ltd. v. State of Orissa 83 ITR 26, had laid down the position of law by holding that the Assessing Officer is not bound to levy penalty automatically simply because the quantum addition has been sustained. Also in case of CIT v. Khoday Eswara (83 ITR 369) (SC), incidentally reported in same ITR Volume, it is held that penalty cannot be levied solely on basis of reasons given in original order of assessment. .....

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onus is to be discharged by the Department. While considering whether the assessee has been able to discharge his burden the Assessing Officer should not begin with the presumption that he is guilty. Since the burden of proof in penalty proceedings varies from that in the assessment proceedings, a finding in the assessment proceedings that a particular receipt is income cannot automatically be adopted, though a finding in the assessment proceedings constitutes good evidence in the penalty proce .....

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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 and if further material is adduced by the assessee in the course of the penalty proceedings, it is all the more necessary that such further m .....

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rial or additional evidence which was not produced during assessment proceedings same can be produced in penalty proceedings as both assessment and penalty proceedings are distinct and separate. In CIT vs. M/s Sidhartha Enterprises (2009) 184 Taxman 460 (P & H)(HC) it was held that the judgment in Dharmendra Textile cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. Even so, the concept of penalty has not undergone change by virt .....

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