TMI Blog2022 (4) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... the information given by the assessee is not found to be incorrect the assessee cannot be held guilty of furnishing inaccurate particulars of income for the purpose of levying the penalty U/s 271(1)(c) - Hon ble Supreme Court has also observed that merely making a wrong claim does not amount to furnishing inaccurate particulars of income in the absence of finding that any detail by the assessee is incorrect or false. Based on the ld. AR for the assessee has referred to various decisions of the High Courts and Coordinate Bench of the Tribunal on the point that penalty order passed by the AO based on different charges in the show cause notice is not valid. Accordingly, in view of the facts and circumstances of the case the penalty levied by the AO u/s 271(1)(c) of the Act is not sustainable and the same is deleted. Decided in favour of assessee. - ITA. No. 962/JP/2019 - - - Dated:- 25-4-2022 - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Sunil Porwal (C.A.) For the Revenue : Smt. Runi Pal (Addl.CIT) ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal of the assessee is directed against the order dated 10.06.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and submissions made by the assessee. 6. The CIT(A) has confirmed the order of the AO by observing as under:- 4. I have gone through the penalty order, statement of facts and grounds of appeal carefully. It is seen from penalty order that the appellant had not filed any return of income u/s 139(1) or 139(4). When the department detected the transaction of sale of the property in which the appellant has earned capital gain, only then, the appellant filed return of income on 08.10.2014 which was non-est in the eyes of law, as it was neither filed u/s 139(1) nor 139(4). Had the Revenue Authorities not detected, the appellant would not have declared any income to the department. Even in the return of income filed in response to the notice issued u/s 148, the appellant did not declare any income under the head long term capital gain though he was fully aware that capital gain on sale of the property computed with reference to section 50C was taxable as the value determined by the Stamp Duty Authority of the property sold by the appellant (₹ 1,91,50,085) was more than the sale consideration recorded in the sale deed (₹ 1,30,00,000). Thus, it is clear that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which is the reason for the failure referred to in the concerned provision. Thereafter the officer dealing with the matter has to consider whether the explanation offered by the assessee as regards the reason for failure, is on account of reasonable cause. Reasonable cause means an honest belief founded upon reasonable grounds, of the existence of a state of circumstances which (assuming them to be true), would reasonably lead any ordinary prudent and cautious man (placed in the position of the person concerned), to come to the conclusion that the same was the right thing to do. The cause shown has to be considered and only if it is found to be frivolous, without substance of foundation, the aforesaid penalty can be imposed WOODWARD GOVERNORS INDIA (P.) LTD. v. CIT [2001] 118 TAXMAN 433, 745 (DELHI). It has consistently held by the High Courts and ITAT s that no penalty u/sec. 271(1)(c) can be levied in respect of addition made under the deeming provisions of section 50C unless the A.O. brings on record evidence to show that the appellant has received consideration over and above the consideration recorded in the sale deed. The A.O. in this case has not brought on record a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, has also deleted the penalty as levied u/sec. 271(1)(c) Refer CIT V/s Skyline Auto Products (P) Ltd. [2004] 271 ITR 335 [2005] 142 Taxman 558 (MP). When a technical or venial breach of the provisions of the Act is there where the breach flows from a BONAFIDE BELIEF than no penalty u/sec. 271(1)(c) can be levied. Refer Hindustan Steel Ltd. V/s State of Orissa (1972) 83 ITR 26 (SC). Before levying penalty u/sec. 271(1)(c) the AO has to prove that assessee has consciously made concealment or inaccurate particulars of his income. In the given circumstances only the technical opinion has changed resulting into change in quantum of tax method of tax but nowhere is could be proved that CONCEALMENT taken place thus no penalty to be levy. Refer K.C. Builders V/s ACIT (2004) 265 ITR 562/135 Taxman 461 (SC). It is requested to kindly delete the penalty as levied. 8. The Ld. DR, on the other hand strongly supporting the order of the CIT(A) submitted that there is no merit in arguments taken by the Ld. AR of the assessee and the AO has rightly taken has a fit case for imposition of penalty U/S 271(1)c. 9. We have heard both the parties, perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect ; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms ; (i) an item of receipt may be suppressed fraudulently ; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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