2015 (7) TMI 739

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....r of the Honble Tribunal (ITAT) is not erroneous and perverse in law in cancelling the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, when the Respondent-assessee made a wrong claim of business profits on purchase and sale of land as adventure and income warranting the said penalty. 2. The facts on record are not in dispute. The case of the appellant- Department, in brief, is that the assessee had purchased agricultural lands with a clear intention to trade in buying and selling of agricultural lands, construction of residential and commercial complexes, leasing and trading in shares and securities and also leasing agricultural land. In the process of completing assessment under Section 143(3) of the Income Tax Act, ....

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....urchased agricultural lands and for a good number of years had offered income as agricultural income on account of the assessee earning income on leasing of the agricultural lands. Tribunal found, as a matter of fact, that the land is outside Municipal limits i.e., beyond eight kilometres of Municipality. This finding is not challenged. The Tribunal also considered the judgment of this Court in Raghotham Reddy v. ITO 169 ITR 174, wherein this Court had held that the sale of agricultural lands would not attract income tax and exempt from tax. In other words, the claim made by the assessee cannot be said to be bona fide with the intention to evade the tax. Merely because the claim made by the assessee has not been accepted ipso facto, the sai....

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....own that in every case where particulars of income are inaccurate, penalty must follow. What has been laid down is that qualitative difference between criminal liability under s. 276C and penalty under s. 271(1)(c) had to be kept in mind and approach adopted to the trial of a criminal case need not be adopted while considering the levy of penalty. Even so, concept of penalty has not undergone change by virtue of the said judgment. Penalty is imposed only when there is some element of deliberate default and not a mere mistake. This being the position, the finding have been recorded on facts that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax, the view taken by the Tribunal cannot be he....