TMI Blog2021 (2) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income has been accepted by the Assessing officer, there cannot be any basis for levy of penalty for concealment of income. Revenue s only contention is that such return of income has not been filed voluntarily and has been filed only in response to notice u/s 148 and thus, in a way, it is a case of deemed concealment - There was a reasonable cause with the assessee for not filing the return originally within prescribed time as he holds a belief that his taxable income was below the taxable limit and no tax liability arises thereon considering the actual sale consideration received by the assessee on sale of shop amounting to ₹ 3,50,000/-. The bonafide of such belief has not been challenged by the Revenue, as we have noted above that there is no finding or adverse material that the assessee has received any consideration over and above the sale consideration. We therefore find that there was a reasonable cause for the assessee for not filing the return of income originally within prescribed time and thus, the second condition is not satisfied in the instant case. The third condition of non-issuance of any notice either u/s 142(1) or section 148 within prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer. It was further submitted that it is not the case where it has been alleged by the Assessing officer that the assessee has received any consideration over and above the consideration as declared in the sale deed. It was accordingly submitted that merely on account of deeming provisions, it cannot be construed to be a case of furnish of inaccurate particulars of income or concealment of particulars of income. It was submitted that section 50C is a deeming provision and it has to be strictly construed and cannot be extended for the purpose of levy of penalty. It was further submitted that even penalty provisions needs to be construed strictly and only where there is any positive evidence of concealment of income, the penalty can be levied. It was submitted that in the instant case, the assessee has suo-moto adopted the deemed sale consideration u/s 50C while filing the return of income and which has been accepted, thus, there is no question of furnish of inaccurate particulars of income or concealment of particulars of income. 5. In support of his contentions, the reliance was placed on the Jaipur Bench decision in case of Anita Beniwal, Alwar vs. ITO, Ward 1(4), Alwar (ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Alwar vs. ITO, Ward 1(4), Alwar (supra) wherein it was held as under:- 6. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee had shown sale consideration at ₹ 8 lacs whereas as per section 50C of the Act, the Stamp Authority has assessed the value of property at ₹ 12,35,730/-, there was difference at ₹ 4,75,658/- in the capital gain, which has been accepted by the assessee during the course of assessment proceedings. The case law referred by the assessee are squarely applicable. In this case also, there is no evidence with the Revenue to prove that the assessee has received much more than reflected in the return. The addition was on account of deeming provision, therefore, we delete the penalty confirmed by the ld. CIT(A). 9. Further, the matter has been considered by the Lucknow Benches in the case of ACIT vs. Lohia Starlinger Ltd (supra) wherein following the decision of the Hon'ble Calcutta High Court in the case of Madan Theatres Ltd., it was held as under: 4. We have considered the rival submissions. We find that although various additions were made by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the revenue that the assessee has failed to furnish the relevant record as called by the AO to disclose the primary facts. The assessee has furnished all the relevant facts, documents/material including the sale agreement and the AO has not doubted the genuineness and validity of the documents produced before him and the sale consideration received by the assessee. Under these facts and circumstances, it cannot be said that the assessee has not furnished correct particulars of income. Merely because the assessee agreed for addition on the basis of valuation made by the Stamp Valuation Authority would not be a conclusive proof that the sale consideration as per this agreement was incorrect and wrong. Accordingly the addition because of the deeming provisions does not ipso facto attract the penalty u/s 271(1)(c ). Hence in view of the decision of the Hon ble Supreme Court in the case of CIT V/s Reliance Petroproducts Pvt.Ltd (supra), the penalty levied u/s 271(1)( c ) is not sustainable. The same is deleted. 11. We therefore find in all these cases, the Hon'ble Calcutta High Court and the Coordinate Benches have consistently held that when the addition has been made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148. 13. The aforesaid explanation 3 of Section 271(1)(c) had come up for interpretation before the Hon'ble Gujarat High Court in case of Chhaganlal Suteriya V. ITO (2011) 337 ITR 350 (Guj) wherein the Hon'ble Gujarat High Court observed as under: A mere failure to furnish a return of income does not amount to concealment u/s 271(1)(c) of the Income-tax Act, 1961. But the introduction of Explanation 3 to section 271(1) with effect from April 1, 1976, has changed the law on the point in certain cases. For the purpose of falling within the purview of Explanation 3, (i) a person should not have been previously assessed (that is, he should be a new assessee); (ii) he should have failed without reasonable cause to furnish a return of income for Assessment Year 1989-90 or a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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