TaxTMI 
TaxTMI 
2014 (1) TMI 938
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.... under consideration and the resultant Long Term Capital Gain (in short 'LTCG') assessed by the Assessing Officer was found to be exigible for levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act'). The assessees are aggrieved with the action of the lower authorities in levying penalty under Section 271(1)(c) of the Act. 3. In order to appreciate the facts and circumstances of the present dispute, reference is made to ITA No. 406/PN/2012 in Rajkumar Kishorilal Chadha, is taken as the lead case. The assessee along with other two assessees is co-owner of a property situated at Ghat No. 167, Village- Ghaunje, Taluka- Mawal, District- Pune. The said property was sold during the year under consideration for a s....
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....vy of penalty vide order dated 23.12.2011, which is the subject matter of challenge before us. 4. At the outset, the learned counsel for the assessee pointed out that the gain on sale of impugned property has been held exigible to tax primarily for the reason that the property was a 'capital asset' within the meaning of Section 2(14)(iii) of the Act. It was pointed out that the Assessing Officer based the assessment on the strength of a certificate dated 29.12.2009 issued by the Talati Village Ghaujne and also a letter issued by the Assistant Director Town Planning, Pune dated 23.12.2009 stating that the property was located within 8 kms. from the municipal limits of PCMC. The learned counsel submitted that the assessment based on the afor....
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....te of Notification of the CBDT dated 06.01.1994 and on that basis, the land falls outside the purview of Section 2(14) of the Act thereby the resultant capital gain was not liable to be taxed at all. On this basis, it is sought to be pointed out that thought the assessment has been finalized by treating the gain as taxable yet having regard to the aforesaid position, the penalty levied under Section 271(1)(c) of the Act be deleted. At the time of hearing, the learned counsel has moved an application for an admission of the following as additional evidence, which was not before the lower authorities :- (i) Copy of application dated 31.05.2013 filed by the appellant- assessee before the Public Relation Officer Town Planning Department, Pune ....
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...., being an agricultural land falling beyond 8 kms. from the municipal limits of PCMC. The said position was also accepted by the Assessing Officer in the assessment made under Section 143(3) of the Act on 26.11.2009. It is only subsequently in the course of re-assessment proceedings initiated under Section 147/148 of the Act that the Assessing Officer came to conclude that the land in question fell within 8 kms. from the municipal limits of PCMC, which was based on a communication from the Assistant Director Town Planning, Pune dated 23.12.2009 and also a certificate dated 29.12.2009 issued by Talati of Village Ghaujne. Accordingly, the capital gain on sale of land was held to be taxable. Ostensibly, the said assessment has been accepted by....
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..... 7. We are conscious that the present proceedings do not relate to the substantive taxation of the impugned capital gain but it is a well-settled proposition that the assessment proceedings and penalty proceedings under Section 271(1)(c) of the Act are independent proceedings and that the conclusions arrived at in the assessment proceedings may be good evidence but the same cannot be considered as conclusive for the purpose of evaluating levy of penalty under Section 271(1)(c) of the Act. The aforesaid proposition is supported by the judgement of the Hon'ble Supreme Court in the case of Khoday Eswara & Sons 83 ITR 639 (SC). In case, an assessee in the course of penalty proceedings is able to demonstrate with a fair degree of certainty tha....
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....ee. 9. In view of the aforesaid discussion, we hereby set-aside the order of the CIT(A) and restore the matter back to the file of the Assessing Officer who shall evaluate the levy of penalty in the context of the fresh plea raised by the assessee. Needless to say, the Assessing Officer shall allow the assessee a reasonable opportunity to put-forth material and submissions in support of his stand and only thereafter he shall pass an order afresh on this aspect as per law. 10. In the result, appeal of assessee i.e. ITA No. 406/PN/2012 is allowed for statistical purposes. 11. The other two appeals in ITA No.303/PN/2012 & ITA No. 407/PN/2012 are for the same assessment year i.e. A.Y. 2007-08 wherein the issue involved is identical and there....