TaxTMI 
TaxTMI 
2014 (8) TMI 1000
X X X X Extracts X X X X
X X X X Extracts X X X X
.... u/s 147 of the I.T. Act, 1961 are as under:- "During the course of assessment proceedings in the case of M/s Bedi Automobiles, Jalandhar Road, Hoshiarpur for the assessment year 2007-08, it was noticed that Smt. Bhupinder Kaur, partner of the said firm had made/introduced capital addition of Rs. 37,00,000/- in her capital account. Sources of the said capital addition were explained to be out of sale of 13 Kanals, 12 Marlas agricultural land which was sold @ Rs. 4,00,000/- per acre (for total consideration of Rs. 11,90,000/-) as per sale deed dated 08.08.2007 whereas, the land was stated to be sold @ 23,00,000/- per acre to prove the investment of Rs. 37,00,000/-. Perusal of the copy of the said sale agreement reveals that it does not prove to be a genuine agreement due to the following: The agreement for sale of land was executed between Smt. Bhupinder Kaur W/o Sh. Maninder Pal Singh (seller) and Sh. Surjit Singh S/o- Sh. Bir Singh, (purchaser) r/o- Mehli Gate, Phagwara. The said agreement has not been signed by the purchaser party i.e. Sh. Surjit Singh, S/o- Shri Bir Singh, but it was signed by one Shri Mohan Singh on behalf of Sh. Surjit Singh. Moreover, Shri M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ifference of Rs. 25,76,380/- as Income from other sources though income accrued on sale of agricultural land not liable to Income Tax. Taxable Income then was worked out at Rs. 26,85,903/- Tax payable thereon after payment of advance Tax was Rs. 12,89,333/- and I was short of finances I could make deposit of self assessment Rs. 2,25,000/- on 03.02.2010 much before the receipt of notice u/s 148 I. Tax Act. It is not a case where I have shown lesser income in return filed u/s 139(1) or u/s 139/148 thereafter I filed the Income Tax return u/s 148 Tax Act. Showing the escaped income as taxable income. It is a case where return is filed late, not within stipulated time u/s 139(1) or 139(4) I. Tax Act. Cause for the delay is bona fide belief that Income is not liable to exceed the taxable limit excluding the Income arises from sale of agricultural land situated outside Municipal limit. Thereafter financial shortage causes delay in submitting the Income tax return. Your kind attention is invited to the provisions of sec. 271(1)(c) Income Tax Act. Penalty cannot be imposed in following circumstances:- Where assesses has concealed the particulars of his I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee cannot escape from penalty u/s 271(1)(c)" Hon'ble ITAT, Calcutta Bench cited as 8 TTJ (CAL) 366 in the case of Khetsides Udaychand Vs. Income Tax Officer in which held that "Penalty under U/s 271(1)(c) - Concealment - Original assessment completed - search at assessee's premises - Disclosure that income from a firm K was assessee's income which was not included - Notice under section 148- Assessee now including income of K- Imposition of penalty- sustained to the extent of minimum imposable by AAC - AAC's order upheld. In the light of the above stated facts when the assessee itself filed revised returns it owned the amounts of concealed income as its own income and the fact that the revised returns were filed only after the issuance of notice under Section 148, and that too, when the I. T. Department was able to lay hands on evidence and documents incriminating to the assessee from where extra income could be proved, considering the material on record and the entirety of the circumstances and the fact that there was a difference of income between the original returned income and the revised returned income and no particular of item of income had been pointed ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Income Tax Act, 1961 has not been invoked specifically but the case of the assessee as per opinion of the Assessing Officer falls under the provisions of this explanation. (iv) The agreement to sell in respect of agricultural land produced by the assessee is not found to be genuine by the Assessing Officer. (v) The assessee has concealed the particulars of income and also filed inaccurate particulars of income. (vi) The explanation offered by the assessee that the income disclosed in the return under the head "Income from other sources" is undisclosed income of the assessee from the sale of land. 6.7 On the other hand the assessee has submitted during the course of assessment and penalty proceedings that the assessee has disclosed this income (Rs. 25,10,000/-) to be peace of mind as income from other sources. The assessee throughout the assessment and penalty proceedings has taken the stand that the income of Rs. 25,10,000/- has been earned from the sale of agricultural land and was not taxable as per provisions of Income Tax Act, 1961 but to by peace of mind, the income earned apart from mentioned in the sale deed of the agricultural land ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iled by the assessee is voluntary return or it has been filed in response to notice u/s 148 of the Income Tax Act, 1961 as the date of service of notice u/s 148 of the Income Tax Act, 1961 (18.02.2010) and date of filing the return (18.02.2010) are same but benefit of doubt should go in favour of the assessee in all probability. Let us presume for the argument sake that the return has been filed in response to notice u/s 148 of the Income Tax Act, 1961. After this presumption, we have now find that under what provisions of the Income Tax Act, 1961, the assessee has concealed or deemed to have concealed or filed inaccurate particulars or deemed to have filed inaccurate particulars of income. Certainly, the case of the assessee does not fall under the provisions of Explanation 1 & Explanation 2 to Section 271(1)(c) of the Income Tax Act, 1961 as the returned income has been accepted by the Assessing Officer while completing assessment/reassessment and no separate addition/disallowance has been made. Although the Assessing Officer has not invoked the provisions of Explanation 3 to Section 271(1)(c) of the Income Tax Act, 1961 specifically but it appears that he levied penalty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder:- 14. In the present case admittedly the petitioner had not been previously assessed under the provisions of the Act, hence the first requirement of Expln. 3 is duly satisfied . The petitioner has not filed his return of income within the period specified under sub-section (1) of s. 153 of the Act and as such, eth second condition is also satisfied. However, as noticed earlier, in the present case a notice had been issued to the petitioner under section 148 of the Act on 10th March, 1997 which was within eth period specified under s. 153(1) of the Act. In the circumstances, the third condition namely, that no notice under s. 142(1) or s. 148 of the Act should have been issued within the period specified under sub-s (1) of s. 153 of the Act is clearly not satisfied. As discussed earlier, the conditions for applicability of Expln. 3 to s. 271(1) are commutative and each of the conditions has to be established for the purpose of invoking the said provision. In the present case, all the conditions are not cumulatively satisfied the failure on the part of the petitioner to furnish the return of income within the specified period, therefore, cannot be deemed to be concealme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of assessment in the hands of M/s. Bedi Automobiles, in which the assessee is a partner and on the said detection, reasons have been recorded in assessee's case is a matter of record. Had the department not taken any action, no declaration of the said income would have been made in the return of income filed by the assessee. The assessee was very much aware of the fact that the assessment in the case of M/s. Bedi Automobiles had been made that is why they deposited Rs. 2.25 lacs being part payment on 03.02.2010 and depositing such tax before issuance of notice u/s 148 and pleading that consideration received on sale of agricultural land was exempt under Income Tax Act, cannot help the assessee to plead that the return has been filed voluntarily. This act of the assessee by depositing tax on 3.2.2010 of Rs. 2.25 lacs makes it evident that it was in the knowledge of the assessee that he has concealed the income and that is the reason that he has filed the return of income on 18.02.2010. In any case, the Ld. DR argued that it is not a voluntarily return and therefore, the ld. CIT(A) is not justified in canceling the penalty. 6. On the other hand, the ld. counsel for the assesse....