TMI Blog1995 (7) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The facts in brief are that one Shri P.D. Parekh entered into an auction in the open bid for the purchase of lease-hold rights in a plot situated in Worli in Bombay on 14-1-1946. The amount to be paid for this purchase of plot was Rs. 15,100 and as Shri Parekh was short of funds, he entered into co-ownership with the assessee for subscription of this money on equal basis. This fact has also been admitted and accepted by the ITO. Subsequently, the appellant claimed to have entered into a sub-agreement with his brother Shri Faramroz Jokhi for again an equal coownership of the appellant's share when in effect it was claimed that half the property belonged to Sri P.D. Parekh and one quarter of this property to both the assessee and Sri Faram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order and directed a fresh assessment vide his order dated 17-3-1975. The assessee died within ten days of the order of the CIT and the burden was cast on the legal representative to face the situation of a fresh assessment. It is fairly clear from the assessment order passed in pursuance of the order of the CIT under section 263 that the ITO did not make any fresh enquiry in regard to the correctness of the claim of the deceased that he had only 1/4th share in the capital gain. The main thrust of the ITO's fresh order was on the question whether the profit could be treated as a business income. He, no doubt, gave a fresh opportunity to the legal representative, who, in the absence of any knowledge about the transaction and availabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ites to his other brother in 1971 that he will get his share on the Worli plot being sold, it cannot be said to have been established that the assessee was under an obligation to give any share to his brother. The letter dated 19-6-1971 is silent on the question as to how much would be the share of the brother of the assessee, if at all he had any share. There is no satisfactory evidence to show that the brother of the assessee had any share in the share of the assessee in the leasehold interest of the said plot." 3.4 On the basis of the above facts, the Assessing Officer initiated penalty proceedings under section 271(1)(c). He was of the opinion that by declaring 1/4th share in the plot of land instead of one-half share, the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied that the claim of the appellant was correct. The working of the capital gain was given in the relevant portion of the return showing that the capital gain arose. As two brothers were interested in the property, 1/4th share was shown belonging to his brother and hence not relating to the income. This view was accepted by the ITO but subsequently the order was set aside. During the course of reassessment proceedings, the claim of the appellant could not be established because by that time he was dead. There was nobody to substantiate the claim. Therefore, it is really a change of opinion. Moreover, when there was mention in the return, it is not concealment which is done deliberately in defiance of law and was guilty of conduct contu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t he deliberately showed that he had only 1/4th share, the other 1/4th share belonging to his brother. This fact has been confirmed by the AAC and the Tribunal and as such the levy of penalty was justified. The learned DR submitted that the widow and the legal heir of the assessee Smt. Jalamai Jokhi had also full knowledge about the existence of the plot and its size but she too concealed the facts during the course of assessment proceedings taken up in pursuance of the CIT's order under section 263. The learned D.R. therefore submitted that the conduct of Smt. Jalamai P. Jokhi was contumacious and the levy of penalty was justified. 6. Smt. Jalamai P. Jokhi, Legal heir of the assessee has filed written submissions in which she has reiter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any further evidence to refute allegations of the Revenue authorities. From the impugned order of penalty it is noted that the Assessing Officer has reached the conclusion on the basis of the finding in the assessment order, as upheld by the appellate authorities and not established by any evidence that the deceased had committed a default punishable under section 271(1)(c). Thus the ITO has failed to discharge the burden which lay upon the department. Penalty proceedings are penal in nature. Elementary principles of Criminal Law will apply. It is a quasi-criminal proceding. There should be conscious concealment. The provisions should be construed strictly. It is now well-settled that penalty proceedings are distinct and different from as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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