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TMI Blog2021 (4) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... of the hearing of the appeal." 2. The facts of the case which can be stated quite shortly are as follows: The assessee had filed his return of income for the assessment year 2011-12 on 31/03/2012, declaring a total income to the tune of Rs. 3,49,215/-. The assessment proceedings under provisions of section 143(3) of the Income Tax Act, 1961 was completed on 07/03/2014 and the total income of the assessee for the period under consideration was assessed to be Rs. 1,55,53,210/-. The assessee claimed deductions under section 54EC of the Act and under section 54F of the Act, which were denied by the assessing officer. The details of deductions claimed by the assessee are as follows: (i) Deduction under section 54EC of the Act Rs. 1,00,00,000 (ii) Deduction under section 54EC of the Act. Rs. 52,04,000 3. In order to claim deduction under section 54EC of the Act, the assessee had invested Rs. 1,50,00,000/- in specified bonds, the details of the investments are as follows: Date Amount (In Rs) Certificate No. 31.03.2010 50,00,000 00078462 28.02.2011 50,00,000 00091846 30.04.2011 34,00,000 0100672 30.09.2011 16,00,000 01206329 Total 1,50,00,000 4. The assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date of filing his returned on income, but was deposited late on 02/02/2012. 6. The Assessing Officer also noted that the amount so deposited in the Capital Gain Account Scheme on 02/02/2012 was withdrawn by the assessee from the said capital account on 28/08/2012 and the assessee paid Long Term Capital Gains (LTCG) on the said withdrawn amount in the assessment year 2013-14. The assessee was asked to furnish the explanation as to why the deduction so claimed u/s.54F of the Act should not be disallowed. Since, the Authorized Representative (AR) of the assessee did not offer any explanation, therefore the Assessing Officer was of the view that assessee has not purchased any new residential house within the time frame allowed u/s.54F of the Act, therefore the Assessing Officer disallowed the claim of the assessee u/s.54F of the Act observing as follows: "Thus, the assessee has failed to follow the conditions laid down in section 54F of the Act and accordingly, the assessee is held. to be not eligible for the benefits of section 54F of the Act. As such, the deduction of Rs. 52,04,000/- claimed by the assessee u/s 54F is disallowed and added to the total income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s concerned. In the assessment order framed u/s.143(3) of the Income Tax Act dated 31/03/2011, the assessing officer has concluded stating that the 'assessee has furnished inaccurate particulars of his income' whereas in the penalty order framed by the Assessing Officer u/s.271(1)(c) of the Act, the Assessing Officer came to the conclusion stating that: 'this is a fit case for levy of penalty u/s.271(1)(c) of the Act for concealment and furnishing inaccurate particulars of income." Thus, ld. Counsel explained the Bench that there is no definite (fix) charge on the assessee as to whether the assessee should be penalized for "furnishing inaccurate particulars of income" or "for concealment of income" therefore, on this account the penalty initiated by the assessee officer is bad in law and therefore the penalty so levied by the assessing officer should be cancelled. 10. On merits, the ld. Counsel submitted before us that first of all, the assessee has made a bona fide claim of deductions under section 54EC and under section 54F of the Act and it is not a false claim made by the assessee to deceive the revenue, therefore, the assessee`s case falls in the category of bona fide claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bonds u/s.54EC of the Act. Regarding the claim of deduction u/s.54F of the Act, the ld. Counsel explained the Bench that because assessee could not utilize the said amount for purchasing a 'new residential house' within the prescribed limit and therefore, the assessee had withdrawn the amount of Rs. 52,04,000/- on 29.08.2012 and offered the said amount as Long Term capital Gain (LTCG) in the subsequent year`s Return of Income filed for A.Y. 2013-14 as per the provision of section 54F(4] of the Act. Hence, ld. Counsel submits before us that there is no mala fide intention on the part of the assessee to defraud the revenue and hence no adverse inference could be drawn that the assessee had concealed any income or had furnished inaccurate particulars of income. The ld. Counsel finally submits that the penalty order is liable to be quashed on legal issue as well as on merit. 14. On the other hand, the ld. DR for the Revenue submitted that the assessee has claimed false deductions under section 54EC and under section 54F of the Act and therefore it is tantamount to furnish "inaccurate particulars of income". The ld.. DR also contends that to mention the different accusation/charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of transfer) but disallowed the other claims amounting to Rs. 1,00,00,000/- because investments were not made within 6 months from date of transfer which falls on 13.02.2011. However, the C1T(A) allowed claimed for deduction u/s.54EC against the investment of Rs. 50,00,000/- made on 28.02.2011 instead of Rs. 50,00,000/- made on 31.03.2010 (prior to the date of transfer). Accordingly, the amount of disallowance of claim of deduction u/s.54EC remained unchanged. Further, the ld. AO observed that the amount of Rs. 52,04,000/- was made in the specified Capital Gain Account beyond the stipulated time. The AO has levied penalty against both these wrong claims of deductions made u/s.54EC at Rs. 1,00,00,000/-and u/s.54F at Rs. 52,04,000/-. On appeal ld. CIT(A) has confirmed the penalty imposed by the assessing officer. 17. We note that the first grievance of the ld. Counsel is that there is no any definite charge/ accusation on the assessee, whether initiation of penalty proceeding is on account of 'concealment of income' or on account of 'furnishing inaccurate particulars of income'. Let us first examine the charge in the assessment order and penalty order: (a) We note that during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of T Ashok Pai - 292 ITR 11 (SC) held that "concealment of income" and "furnishing of inaccurate particulars of income" carry different connotations. The Hon`ble Gujarat High Court in case of Manu Engineering Works -122 ITR 306 (Guj.) held that the penalty order has to be clear as to limb for which it is levied and the position being unclear penalty is not sustainable. Further, on the identical facts, Hon`ble Gujarat High Court in case of Nayan C. Shah vs. ITO [Tax Appeal No. 543 of 2012 (Guj- HC)] held. as follows: "11. Another notable aspect of the matter is that while the Assessing Officer has imposed penalty on the ground that the assessee has furnished inaccurate particulars of income, the Tribunal has set aside the order of the Commissioner (Appeals) by holding that the assessee has suppressed the actual particulars of income by not making disallowance under section 40(a)(ia) of the Act. Thus, the Assessing Officer has imposed penalty on the ground of furnishing inaccurate particulars, whereas the Tribunal has upheld. the order of the Assessing Officer on the ground of concealment of particulars. It is by now well settled that while issuing a notice under section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial house' within the prescribed limit and therefore, the assessee had withdrawn the amount of Rs. 52,04,000/- on 29.08.2012 and offered the said amount as Long Term capital Gain (LTCG) in the subsequent year`s Return of Income filed for A.Y. 2013-14 as per the provision of section 54F(4) of the Act. Hence, ld. Counsel submits before us that there is no mala fide intention on the part of the assessee to defraud the revenue and hence no adverse inference could be drawn that the assessee had concealed any income or had furnished inaccurate particulars of income. 22. We note that the assessee has made a bona fide claim of deductions under section 54EC and under section 54F of the Act and it is not a false claim made by the assessee to deceive the revenue, therefore, the assessee`s case falls in the category of bona fide claim of deductions hence the penalty should not be levied. At this juncture it is appropriate to quote the judgment of the Hon`ble Supreme Court in the case of CIT vs. Reliance Petroproducts, 322 ITR 158 (SC), wherein it was held as follows: "10. It was tried to be suggested that Section 14A of the Act specifically excluded the deductions in respect of the expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption, penalty cannot be imposed. The penalty levied stands set aside." The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its Return. 12. The Tribunal, as well as, the Commissioner of Income Tax (Appeals) and the High Court have correctly reached this conclusion and, therefore, the appeal filed by the Revenue has no merits and is dismissed." 23. The judgment of the hon`ble Supreme Court in the case of Reliance Petroproducts(supra) is squarely applicable to the facts of the assessee`s case under consideration. As the assessee has furnished all the particulars regarding claim of deduction u/s.54EC and 54F of the Act in the Return of Income, and during the course of assessment proceedings, all the material facts relating to investment in Bonds u/s.54EC and specified account 54F of the Act were disclosed to the assessing officer. The assessee also explained that he had received the amount of sale consideration in piecemeal manner and invested the said amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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