TMI Blog2017 (3) TMI 1872X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that in terms of deeming provisions of section 50C, higher sales consideration of property determined by the DVO did not by itself amount to furnishing inaccurate particulars of income so as to levy penalty under section 271(1)(c) of the act The revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of mentioned in the sale deed . It has also not been shown as to whether any corresponding addition has been made in the hands of the buyer. We further notice that the addition was made totally by invoking the provision contained in section 50C of the act, therefore, penalty cannot be imposed on the income determined on the basis of deeming provision of section 50C as this solitary does not lead to concealment of income or furnishing of inaccurate particulars of income - Decided in favour of assessee. - ITA No. 1831/Ahd/2014 - - - Dated:- 20-3-2017 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member For the Revenue : Shri Alok Kumar, Sr. D.R. For the Assessee : Shri Mehul Shah, A.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of ₹ 20130880/- u/s 50C of the Act. The appellant did not furnish any explanation before the AO during the penalty proceedings. The appellant has submitted that the addition has been made u/s 50C purely on the deeming provisions of the IT Act. The case laws relied upon by the appellant has been perused. The facts and circumstances of the case are different and not applicable on the facts of the instant case. On the analysis of the provisions of section 50C, it is observed that section 50C is a deeming provision to tax the difference as capital gam. Section 50C was incorporated to prevent large scale undervaluation of the real value of the property in the sale deed, so as to defraud the Government of revenue it was legitimately entitled, to by pumping in black money. What was stated in section 50C as real value could not be regarded as a notional or artificial value and such real value was determinable only after hearing the assessee in accordance with the statutory provisions. 6.1.2 It is an obligatory duty cast upon a person filing the return of income to disclose all his income derived from any source under various heads and indicate the income under eacn head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent may take various forms. A glaring illustration of concealment would be where the assessee does not disclose or fully disclose in the return the income derived by him which would fall under a particular head, e.g., Income from other sources while disclosing his income falling under other heads of income prescribed by section 14. To the extent he does not disclose that income; he conceals the particulars of income. The obligation is not only to disclose particulars of income but to disclose them correctly and completely. If while disclosing the particulars of income in the return he puts them under a wrong head, he can be said to be furnishing inaccurate particulars of income. The particulars of income can be made inaccurate in a variety of ways, a glaring illustration of which would be where the assessee while stating the income under a particular head, works out the income chargeable to tax after making deductions which are falsely made. Such a process would make the particulars of income inaccurate. In all such cases, whether the income is not disclosed-against the constituent item of the return in which it falls or is partly not disclosed, or the particulars of income given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of his income as well as a correct disclosure. Therefore, if the disclosure made of the particulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271(1)(c). The appellant was not forthcoming in the declaration of the true and correct income which is apparent from the fact true income from the sale of land was not disclosed in the return of income. The appellant also did not bring on record any evidence to show that the valuation done by the DVO was not correct. Since, these facts was suppressed and not disclosed truly and fully during the filing of return of income. The provisions of Sec. 271(1)(c) also includes deemed income. The position of law with regard to levy of penalty u/s 271(1)(c) has undergone a substantial change after the insertion of Explanation (1) to section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT Vs. Gurbachan Laf reported in 250 ITR I57(DeIhi) 6.1.8 The apex court naa approved the interpretation placed upon the Explanation by a Full Bench of the of the Punjab and Haryana High Court in Viswakarma Industries Vs. CIT (1982) 135ITR652. 6.1.9 Similar view has been expressed by the Kerala High Court in the case of CIT Vs. K.P. Madhusudana reported in 246 ITR 218. This decision has been affirmed by the Supreme Court in 251 ITR 99. Affirming the aforesaid decision, the Hon ble Supreme Court has further held that after insertion of explanation its earlier decision in the case of Sir Shadi Lal Sugar end General Mills Ltd. Vs. CIT reported in 168 ITR 705 (SC) was no longer applicable. The Kerala High Court at page 244 has observed as under: The question of onus is of primary and added importance in legal acrimony. In CIT Vs. Anwar All (1970) 76 ITR 696, the apex court laid down that, before a person could be visited with a penalty for concealment, etc., the Revenue must prove that the amount in question was the income of the assessee and that he had concealed it with a motive. It was further held that penalty could not be imposed merely because any exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961, entirely indicate the element of strict lability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of section 271(1)(c) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. 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 Income-tax Act. In view of the above facts and circumstances, it is evident that the appellant had deliberately and intentionally not disclosed the true and correct income with the intention to evade tax. Hence, the AO has rightly imposed the penalty u/s 271(1)(c) of the Act and the imposition of penalty is upheld and ground of appeal is dismissed. 4. During the course of appellate proceedings before us, the ld. counsel contended that Ld. CIT(A) has erred in confirming the penalty levied by the assessing officer as the assessing officer had made deemed addition on account of undisclosed long term capital gain u/s. 50C of the act. He also furnished pape ..... X X X X Extracts X X X X X X X X Extracts X X X X
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