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TMI Blog2018 (5) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the following grounds of appeal, which are independent and without prejudice to each other: 1. On the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) erred in confirming penalty levied under section 271(1)(c) of the act. 2. On the facts and circumstances of the case, the Commissioner of Income Tax (appeals) erred in not considering the facts and explanation given during the proceedings. 3. On the facts and circumstances of the case, the Commissioner of Income Tax (A) has wrongly held that there is concealment of income as per judgement which has been overruled and or its effect has been diluted in subsequent judgements and without considering the reasonable cause of the same." 3. The brief facts of the case are that the assessee is engaged in washing and ironing of clothes. It is claimed by the assessee that he is an illiterate person , 66 year of age and small time Dhobi having no knowledge of complex provisions and nitty-gritty‟s of the 1961 Act . It all happens that the assessee filed its return of income for the first time before the Revenue for the impugned assessment year . The assessee having sold as well purchased prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occupying the said residential premises . After her death tenancy rights got transferred to her sons (including assessee) and since the assessee got alternate premises free of cost under SRA scheme cost of acquisition of tenancy rights was „Nil‟ and purchase cost of the flat was taken at „Nil‟ by the AO while cost of stamp duty and registration charges was allowed by the AO as deduction while computing capital gains and capital gains were computed as under:- Flat at Mira Road Flat at Vakola Total Sale Date 08.06.2010 10.01.2011 Sale Consideration received 1175000 5150000 6325000 Less Brokerage Paid 23500 103000 126500 Net Sale Consideration 1151500 5047000 6198500 Less Index Cost of acquisition 706629 11655 718284 Less Index Cost of acquisition improvement --- 486567 486567 Total Long term capital gain 444871 4548778 4993649 Less Exemption u/s 54 cost of New House property as per Submission made 3804940 Long term capital gain 1188709 The AO while bringing to tax above long term capital gains vide assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m observation to cover or keep away from sight to prevent the discovery of to withdraw knowledge of it is thus implicit in the word 'concealed' that there has been deliberate act on the part of the assessee. Thus an element of deliberateness is embedded in the word 'concealment' even though the word deliberately was omitted by the Fin. Act 1964 w.e.f. 1.4.1965 NASA continental Exports Ltd. vs CIT (2002) 124 Taxman 172 (Hyd). 4. The assessee's default within the meaning of sec.271(1)(c) is clear and established as discussed above and also in the body of assessment order u/s 143(3) dated 24.03.2014. 7. In view of the above and of careful consideration of the fact and circumstances of the case, I am of firm opinion that the assessee has concealed the particulars of his income and furnished inaccurate particulars of his income within the meaning of section 271(1)(c ) r.w. explanation therein and has thereby rendered itself liable for penalty u/s 271(1)(c ) and I am satisfied that this a fit case for levying penalty u/s 271 (1)(c) of the IT Act. 8. The minimum Penalty leviable i.e. 100% of the Tax to be Rs. 2,44,875/- and Maximum Penalty leviable is 300% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancy , the assessee was entitled for deduction towards cost of acquisition of tenancy but for the ill-advice of the tax practitioner , the assessee could not claim the cost of acquisition of tenancy and paid taxes as he was not having knowledge of provisions of Income Tax Act. It was submitted that it was the duty of the AO to have pointed out the said error and allow the cost of the tenancy at its indexed value as deduction. Thus it was submitted that there was no intention to conceal any income from Revenue. The assessee relied upon the following case laws as under:- 1. Hon'ble Allahabad High Court decision in the case of CIT v.. Hari Om Ashok Sumar Sugar Works (ITR no. 78 of 1992) 2. Hon'ble Andhra Pradesh High Court decision in the case of CIT v. Sania Mirza (order dated 09.02.2012 in ITA no. 526 of 2011) 3. Hon'ble Madhya Pradesh High Court decision in the case of CIT v. Pitambarads Dulichand reported at 273 ITR 271 4. Hon'ble Bombay High Court decision in the case of CIT v. Sidhartha Enterprises reported at 322 ITR 80 5. Hon'ble Bombay High Court decision in the case of CIT v. Shahbad Co-operative Sugar Mills Ltd. reported at 322 ITR 73. 6. Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged the levy of penalty u/s.271(1)(c) of the I.T.Act amounting to Rs. 2,44,875/- , The main contentions made by the appellant are as follows. i) The appellant was not having knowledge of income-tax and could not get the correct advise in respect of filing of return of income ii) The Tax Practitioner gave the incorrect advise to the appellant regarding the taxability of income from capital gains. iii) The appellant submitted the details of the property during the assessment proceedings. iv) There was no intention of the appellant to mislead the revenue. 5.2 The scheme of sec. 271(1)(c) visualizes imposition of penalty when the appellant has concealed income or when the appellant has furnished inaccurate particulars of income. In addition to these two situations, penalty can also be imposed, inter alia, when appellant is deemed to have concealed particulars of income under Explanation 1 to sec. 271(1)(c). A deeming fiction under Explanation 1 to sec. 271(1)(c) envisages two situations - (a) first, where in respect of any facts material to the computation of total income under the provisions of the Act, the appellant fails to offer an explanation or the explanation off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the investment in the new house property amounting to Rs. 38,04,940/- was much lesser than the total amount of sale consideration received from sale of two flats of Rs. 63,25,000/-. Since the provisions for taxation of long term capital gains as well the provisions for exemption u/s.54 of the I.T.Act are very clear, no fairly skilled tax practitioner will advise any assessee to not to show any particulars regarding the transactions of sale of flats. Had the appellant really provided the details of sale of flats to the tax practitioner along with the details of investment in the new property, the tax practitioner would have in the most probability advised the assessee to file the particulars in respect of sale of flats and to claim exemption in respect of the new property by giving all the details. In view of these facts, the explanation given by the appellant that the complete absence of any mention in respect of the sale of flats and the income earned from it, is a false explanation. Therefore, the deeming provisions of explanation 1 to section 271(1)(c) are attracted in the present case. The deeming provisions come into play where in respect of facts, materials to the computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the assessee has come in an appeal before the tribunal . The Ld. Counsel for the assessee submitted before us that assessee has sold certain premises and has acquired another residential premises for which exemption u/s. 54 was claimed . It was submitted that assessee is an old and illiterate person engaged in washing and ironing of cloth and he is a small time dhobi. It is submitted that this is the first return of income filed by the assessee with Revenue. The assessee filed written submissions before learned CIT(A) which are placed in file. The learned counsel for the assessee has also relied upon the following case laws as under:- 1. Pankaj Kumar Gupta v ITO in ITA no. 486/Lkw/2016 dated 16.01.2018 2. P K Joshua v. ITO in ITA no. 4487 to 4491/Mum/2014 dated 07.06.2017 The assessee also relied upon the decision of Hon‟ble Andhra Pradesh High Court in the case of Sania Mirza(supra) . The assessee has pleaded for deletion of the penalty levied by the AO which was later confirmed by learned CIT(A). The Ld. DR on the other hand has relied upon the order of learned CIT(A) which was brought to our notice . 7. We have considered rival contentions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 223;s mother on death of father . After death of mother of the assessee, the tenancy came to be in favour of the assessee under the tenancy laws. The mother of the assessee expired in the year 1980 . The assessee had not claimed the acquisition cost of tenancy while computing long term capital gains on sale of flat at Vakola which as per the assessee had to be taken based on prevailing value as on 01.04.1981 and thereafter indexation has to be applied as per cost inflation index. It is the claim of the assessee that assessee is illiterate person of old age non-maintaining good health and was ill advised by his tax Practitioner. It is also claimed that the AO despite having all the documents in his possession did not advised assessee to claim the value of tenancy as on 01.04.1981 and its indexation thereof , as deduction from the sale proceed of said alternate flat allotted under SRA in lieu of tenancy right. It was submitted that the AO was duty bound to have allowed the said value of tenancy rights as on 01-04-1981 and its indexation thereof while computing long term capital gains. The assessee also relied upon CBDT circular dated 11-04-1955 to contend that it is the lawful duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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