2014 (12) TMI 48

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.... not accepted by the Assessing Officer and he treated the entire capital gain, Long term capital gain of Rs. 1,53,11,448/- and Short term capital gain of Rs. 4,73,30,889/- which was on the sale of shares as the business income of the assessee. The assessee challenged the assessment order before the Ld.CIT(A) but as the assessee has not paid the tax on returned income the Ld.CIT(A) dismissed the appeal filed by the assessee. The assessee challenged the order passed by the Ld.CIT(A) before the Tribunal by filing the appeal being ITA No.1721/PN/2012 and vide order dated 28-10-2013 the matter was set-aside to the file of the Ld.CIT(A). The operative part of the Tribunal is as under : "9. We have carefully considered the rival submissions. It is quite clear from perusal of Section 249(4)(a) of the Act that unless assessee pays the tax due on the income returned by him, CIT(A) is not vested with any power to entertain the appeal. In the present case, at the time of filing of appeal before the CIT(A), assessee had not paid the tax due on the income returned by him and thus no fault can be found with the order of the CIT(A) in dismissing the appeal of the assessee in-limine. However, th....

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....#39;, penalty can be imposed. Therefore, in the case of assessee, controversy of proving that mens rea has been established does not rest with department. Their lordships observed that penalty u/s.271(l)(c) is a civil liability in contra-distinction with prosecution u/s.276C which is a criminal liability. A plain reading of the above judgment shows that only impact of civil liability is that mens rea or intention of the assessee need not be proved and Apex Court further observed 'willful concealment is not an essential ingredient for attracting civil liability'. 5.1 The assessee's case falls under the category of furnishing inaccurate particulars of income. Hence, it is discussed in detail : The expression 'furnishing inaccurate particulars of income' has not been defined in the Act. The expression refers to 'not in conformity with the facts or truth" and i.e. meaning which is relevant in the context of furnishing of inaccurate particulars. The expression 'particulars' refers to 'facts, details, specifications or information' about someone or something, hence plain meaning of expression 'furnishing of inaccurate particulars of incom....

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.... earning the dividend which is main criteria for investment as an capital asset is missing in the case of assessee, hence the classification made by assessee as capital gain is untenable, hence rejected. Further as described above, the CIT(A) has upheld the treatment given by A.O. Therefore, I am of considered view that the facts of the case warrant levy of penalty u/s.271(1)(c). 6.4 In light of above discussion, judicial pronouncements and case laws discussed, it is established beyond shadow of doubt that the assessee failed to discharge the onus cast upon him of furnishing correct particulars in return of income within meaning of section 139 in respect of short term capital gain and long term capital gain. Having been failed to furnish the correct particulars of income, the assessee can be said to have furnished inaccurate particulars of income within the meaning of section 271(1)(c) of Income-tax Act. Therefore, I am satisfied that this is a fit case for levy of penalty in terms of provisions of section 274 r.w.s.explanation (1) to section 271(1)(c). I therefore, levy a minimum penalty of Rs. 1,57,82,879/- (Rupees one crore fifty seven lakhs eighty two thousand eight hundred ....

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....s assessment under the head 'Capital Gain', it is apparent that the issue is quite subjective. The AO has not brought on record any fact or evidence which could show that the appellant has concealed the income or has filed inaccurate particulars of income. The particulars of income filed by the appellant has been accepted to be correct in the assessment order as well as in the penalty order. The difference of opinion lies only in respect of head of income under which share transaction is required to be assessed. Therefore, it is apparent that the penalty is not leviable under the main provisions of the sec.271(1)(c) of the IT. Act. Even if Explanation-1 is examined, it can be noted that the appellant has given the explanation in respect of the claim for assessment of share transaction under the head 'Capital Gains'. Therefore, it cannot be said that the appellant had no explanation for making this claim. Furthermore, the claim made also cannot be said to be false or unsubstantiated in the facts of this case. The regularity of transactions, the frequency, etc. are parameters which on overall consideration can lead to a conclusion whether it would be more appropriate ....

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....fficer also rejected the head under which the assessee has declared gain/profit, i.e. capital gain and brought to tax the entire profit/gain on the share transactions under the head 'business income' that resulted into raising the heavy demand against the assessee. The assessee challenged the assessment order before the Ld.CIT(A) but as the assessee could not pay the due tax, the Ld.CIT(A) dismissed the appeal filed by the assessee applying the provisions of section 294(4)(a) of the Act. When the matter reached before the Tribunal the Tribunal remitted the matter back to the Ld.CIT(A). 4.1 Now the short issue before us is whether the assessee has filed inaccurate particulars of income. Admittedly, in the present case, except change of the head, there is no addition of single penny. The Ld.CIT(A) was of the opinion that mere change of head cannot be said to filing of the inaccurate particulars of income. 4.2 In the case of Reliance Petroproducts Pvt. Ltd., 323 ITR 128 (SC) it is held as under : "A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have ....

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....ssee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. In Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai & Anr. [2007(6) SCC 329], this Court explained the terms "concealment of income" and "furnishing inaccurate particulars". The Court went on to hold therein that in order to attract the penalty under Section 271(1)(c), mens rea was necessary, as according to the Court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause (iii) of Section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment ofparticulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanati....