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TMI Blog2017 (7) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 12A of the Act. Originally, assessment of the assessee was completed under section 143(3) of the Act vide order dated 28.12.2007 at nil income. Later on, the case was reopened under section 148 of the Act for the reason that the assessee had transferred land and other assets worth Rs. 1,05,82,364/- to other societies which did not amount to application of income and after excluding the same the application of income towards charitable purpose came to less than 85% of the receipts and hence the income of the assessee trust was liable to be brought to tax. During assessment proceedings, the assessee argued that it had applied more than 85% of its income and the assets were transferred from old assets and not from assets acquired during the year. The assessee further argued that the assets had not been transferred for a consideration but were given by way of donation to two other societies and, therefore, no question of capital gain arose as no price was charged for that. The Assessing Officer rejected the contention of the assessee and held that the assets had been transferred at book value of Rs. 1,05,82,364/- and since the entire cost had been allowed as application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee argued that it had offered a satisfactory explanation of the treatment given by it and, therefore, by virtue of the explanation to section 271(1)(c) of the Act also no penalty is liable to it. The learned CIT (Appeals) after considering assessee's arguments held that in view of the fact that the arguments of the assessee have been dismissed both by the CIT (Appeals) and the I.T.A.T., the assessee has no case on merits and its contention that no capital gain had accrued to it could not be given any cognizance. Further the learned CIT (Appeals) held that the assessee by not disclosing capital gain earned by it on the transfer of the impugned assets in the return of income filed in Form No.2D, the decision of the Apex Court in the case of CIT Vs. Reliance Petroproducts (2010) 322 ITR 158(SC) squarely applied to the assessee's case and the assessee was guilty of not disclosing particulars of income. The learned CIT (Appeals) further held that since the assessee had failed to substantiate the explanation offered by it and to prove that its explanation was bonafide, the Explanation-1(B) to section 271(1) was attracted. Thus, the learned CIT (Appeals) upheld the levy of penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, relied upon the order of the learned CIT (Appeals). 8. We have heard the rival contentions and perused the orders of the authorities below as also documents produced before us. We find no justification in upholding the levy of penalty under section 271(1)(c) of the Act in the present case, since the basic condition for the levy of penalty under section 271(1)(c), which is concealment of "particulars" (emphasis supplied by us) of income, is not fulfilled in the present case. Penalty in the present case, we find has been levied for concealing income being capital gains earned on transfer of fixed assets, to the tune of Rs. 1,05,82,364/-. The learned counsel for the assessee contended that since the managements of various schools run by the assessee society had become burdensome, it was resolved, vide resolution dated 29.1.2005 to transfer certain schools and land to two new societies formed for this purpose i.e. Swami Vivekanand Paramhans Education Society and Swami Vivekanand Mother Sharda Education Society. The learned counsel for the assessee contended that out of the assets resolved to be transferred, certain assets were transferred during the year amounting to Rs. 1,05,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the credit balance and thus has been received by the appellant through book entries. This findings have also been confirmed by the Ld. CIT(A) in his order vide Para '5.1' and subsequently by the Ld, I.T.A.T. Therefore, the assessee's plea that no consideration has been received or any adjustment by book entries were made for consideration is not tenable." 11. The Ld. CIT (Appeals) has also not controverted this fact but has only stated at para 8.1 of its order that: "8.1 During the appellate proceedings against the penalty order the appellant submission backed by judicial pronouncements mainly lies on penalty is not leviable on donation of assets to other societies land further submission that the assessee has not supplied any inaccurate particulars in the return filed. After considering the facts of the case and appellant submissions it is found that the claim made by the assessee on account of 'donation assets' was found to be 'transfer of assets'.Thus, the assessee by making non-genuine claim in the return ahs furnished the particulars which led to reduction in the tax liability. On perusal of assessment record and original return filed by the appellant, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng para at page 3 of the resolution clearly states so: "All the movable assets appearing in the accounts of School/Schools, transfer to new society for administration shall be transferred to the new society at the Book Value as on 31.03.04 except immovable property. But nothing is recoverable by the old society. The School already managed by one society, now will be managed by three societies i.e., sisters concern societies founded with similar objects." 14. Moreover, the fact that the societies to whom the assets were transferred were shown as creditors, lends credence to the explanation of the assessee that no consideration was either received or was receivable on account of the transfer since in such circumstances the societies would have been reflected as debtors and not creditors in the books of account of the assessee. Also the fact that corpus funds have been debited to the extent of transfer made also lends credecence to the assessee's explanation that the assets were transferred for no consideration. The Revenue, on the other hand, we find has not brought on record any evidence to prove that the assets were transferred for consideration which was either received or was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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