TMI Blog2019 (1) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. Therefore, there is no conclusive evidence of concealment of income ever found by the authorities below. The primary fact was duly disclosed by the assessee relating to his claim. Merely because the claim was made on bonafide belief of the appellant, the same cannot be held that the income was concealed or inaccurate particulars were furnished. Since, the claim was rejected as not tenable does not empower the revenue authorities to levy the penalty. We repeat that the appellant had furnished all the details, information and explanation regarding his claim of exemption during assessment. No information or details were withheld from the acknowledgement of the Assessing officer. It can be a wrong claim, but according to us, cannot be said to be false. Merely because the claim was made on bonafide interpretation and belief of the appellant it cannot be held that income was concealed or inaccurate particulars furnished. Case of COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] to be followed - decided in favour of assessee - I.T.A. No.1911/Ahd/2015 - - - Dated:- 24-1-2019 - Shri Pramod Kumar, Vice President And Ms. Madhumit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show-cause failed to submit that agricultural activities were being carried out for a period of two years prior to sale and one year from the date of sale. Taking into consideration the entire aspect of the matter, the benefit as claimed by the assessee u/s 54B was denied by the assessment officer. During the assessment proceeding, the assessee further claimed following benefits u/s 54F. Invested ₹ 1,85,33,000/- for purchase of land for construction of house Exemption u/s 54F Invested ₹ 1,26,90,000/- for purchase of Flat Exemption u/s 54F Cost of construction of residential house of ₹ 23,00,471/- Exemption u/s 54F Section 54F provides that capital gain is exempt if the sale proceeds invested in purchase of the residential house within one year before or 2 years after the date of transfer of such an asset or in the construction of one residential house within 3 years from the date of such transfer. However, such benefit is not available in the event the assessee is having one house property other than the new asset, as on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned AO in the penalty proceeding issued a show-cause notice on 28.01.2014 as to why penalty u/s 271(1)(c) should not be imposed upon him for concealment of income. The Learned AO observed that none has attended nor filed any explanation and/or return submission before the Learned AO during the penalty proceeding. The same is rebutted by the assessee before the Appellate authority by way of written submission. The copy of the said explanation rendered by the assessee before the Learned AO dated 21.03.2014 was also annexed thereto as exhibit B . However, the Learned AO, therefore, proceeded with the said penalty proceeding and ultimately imposed penalty of ₹ 36,00,000/- with the following observation: 4. In view of the above, it is clear that the assessee had concealed income to the extent of ₹ 1,70,55,571/-. Therefore, it is a fit case for imposing penalty u/s. 271(1)(c) of the I.T. Act 1961. 5. Section 271(1)(c) is attracted where, the Assessing Officer or the first appellate authority is satisfied that (a) any person has concealed the particulars of his income, or (b) has furnished inaccurate particulars of such income. The expression has concealed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as against maximum penalty leviable of ₹ 1,05,40,344/- at the rate, 300% of tax sought to be evaded. 5. In appeal the order of imposing penalty was confirmed with the following observation: 5.1 appellant was argued that AO has wrongly observed that appellant has not furnished any explanation to justify levy of penalty u/s 271(1)(c) of the Act which renders entire penalty under order invalid. The appellant has furnished following written submission during the course of penalty proceedings: We are in receipt of your dated 28.01.2014 u/s 143(3) served on 30.01.2014 along with a notice to show cause why penalty under section 271(1)(c) should not be levied. In this connection, we have to submit that there is neither any concealment nor furnishing of inaccurate particulars of income. The notice seems to have been issued because of some disallowances/addition made during assessment. It is submitted with respect that all particulars were truly and fully furnished during the course of assessment but the disallowances/additions is made erroneously which is not accepted by us. Merely because any disallowance/addition is made in the assessment, the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Impugned penalty order did not require any interference - Held, yes [Para 5] [In favour of revenue] The Hon'ble Mumbai ITAT after considering the decision of Reliance Petrochemicals relied upon by appellant has further held as under: In our opinion there is a basic and fundamental difference between a debatable claim and an inadmissible claim i.e. a patently wrong or false claim, in the case of first kind of claim there can be two opinion as to whether or not the assessee could make such a claim on the basis of certain facts of that particular year. Provisions of the Act do not disentitle the assessee to make such claim. BUT, in the second type of claim there is clear and emphatic bar in the Act-assessee are not en tilled to claim such expend it u re/deduct ion/re bate/exemption. Absence of 3 valid basis for making any claim of deduction, resulting in low tax or no tax, is like going against the letter and spirit of the law. In other words, claims made under the second category have no legs of their own to stand, because such claims are tenable neither legally nor -factually. Courts are of the view that disputable claims and inadmissible Claims ar9 to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee produces no fresh evidence or presents any additional or fresh circumstance in penalty proceedings, he would be deemed to have failed to discharge the onus placed on him and the levy of penalty could be justified. It is said that the Explanations appended to section 271(1)(c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. Courts have held that the object behind enactment of section 271(1)(c) read with the Explanations indicate that the section has been enacted to provide, for a remedy for loss of revenue, that the penalty under that provision, is a civil liability, that willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Act. 5.5 Reference is also drawn to decision of Hon'ble Delhi High court in the case of CIT V/s. HCIL Kalindee ... [2013] 37 taxmann.com 347 (Delhi) has held as under: Section 271(1)(c), read with section 80-1A, of the Income-tax Act, 1961 Penalty - For concealment of income [Wrong claim under section 80-IA] - Assessment year 2007-08 - Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. Since there is no concealment of income, according to the Learned AR, the provision of Section 271(1)(c) cannot be applied for concealment of income as alleged or at all. The Learned AO also relied upon the judgment passed by the Hon ble Apex Court in the matter of Learned CIT-vs-Reliance Petro Products, reported in 322 ITR 158. Reliance were also placed upon the order passed by the Learned Tribunal, Delhi Bench in ITA No.1457/Del/2010 and the Co-ordinate Bench passed a judgment in ITA No.164/Ahd/2010 for A.Y. 2004-05. On the contrary, the Learned DR relied upon the order passed by the authorities below. According to him, the concealment of income is apparent from the record and thus penalty can be imposed even on the basis of estimate of income. 7. We have heard the Learned Representative of the respective parties, we have perused the relevant materials available on record. It appears from the records that the penalty proceeding was initiated by the Assessing Officer on the ground of concealment of particulars of his income leading to furnishing of inaccurate particulars of income. It further appears that the assessee was issued a show-cause notice on 28.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter, the order levying penalty is deleted. Assessee's appeal is allowed. In that case the order impugned is a product of arbitrariness in the decision making process and the discretion cannot be said to be exercised jurisdictionally as held in the case of CIT-Vs-Scientific Chemicals (2005) 198 CTR 665 (Guj) as passed by the Jurisdictional High Court is also applicable to the instant case of the assessee. 8. Apart from that the provision of Section 271(1)(c) reads as follows: 271 . (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or furnished inaccurate particulars of [such income, or Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing officer or the commissioner (Appeals) or the Principal Commissioner or Commissioner to be false, or (B) such person offers an explanation which he is not able to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false. Merely because the claim was made on bonafide interpretation and belief of the appellant it cannot be held that income was concealed or inaccurate particulars furnished. The judgments relied upon on this ratio has laid down by the Hon ble Supreme Court in the case of Reliance Petro Product Pvt. Ltd. reported in 322 ITR 158 (supra) squarely covered in the instant case of the assessee. Further that, the appellant being basically an agriculturist had filed its return based on the assistance of the tax practitioner since all income and sales values were duly disclosed, there cannot be said to have any concealment of income by the assessee neither it is the case of the AO that the particulars were inaccurate. It is a settled proposition of law that if the assessee has claimed any exemption after disclosing the income and under the ignorance of the provision of Act 1961 and not offered that amount for tax in such case penalty should not be imposed. Rather it is the duty of the Assessing Officer to ask for further details and tax income if it is liable to tax which has been done in this particular case. The same ratio has also been upheld by the Rajasthan High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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