TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 1243
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....e assessee had earned a long term capital gains of Rs. 18,94,080/-. The said capital gain was declared in the return of income filed for A.Y. 1999-2000 (return was filed on 31.03.2000). Since the return of income was filed after the due date mandated u/s 139(1) of the Act, the capital gains declared was assessed as "undisclosed income" in view of the provisions of Section 158BB (1)(c) of the Act. The assessee filed appeal before the CIT(A) and contended that there was no intention on the part of the assessee to hide the said income and it was only the technical default that the return of income was filed belatedly u/s 139(4) of the Act. The assessee relied on the Tribunal's order in the case of Vidya Madan Lal Malani Vs. ACIT reported in 115 ITD 316. The CIT(A), however, did accede to the contention of the assessee and treated the long term capital gain as the "undisclosed income". On further appeal, the Tribunal vide order dated 03.08.2007 held that the capital gain was not an "undisclosed income" of the assessee. The Revenue filed an appeal u/s 260A of the Act and the Hon'ble High Court by the judgment dated 29.11.2010 allowed the appeal of the Revenue. The Hon'ble High Court hel....
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....and this onus is to be discharged by the department. (iv) The Assessing officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He should not begin with the presumption that the assessee is guilty. (iv) Though penalty proceedings under the income-tax law may not be criminal in nature, they are still quasi-criminal requiring the Department to establish that the assessee has concealed his income. 4.3 Now looking into the facts .of the present case it is observed that: (i) the investment in shares (which were sold during the year and on which long term has been earned) were duly been reflected in the financial account of the year in which they were purchased. (ii) the sale consideration/gain which has been received during the year under consideration has duly been deposited in the declared bank account of the appellant. (iii) the unaudited profit and loss account and balance sheet which were found during the search, duly contains the recording of the transaction of sale of these shares, on which the capital gain of Rs. 18,94,080 has been earned and (iv) the return of income for Assessment Year 1999....
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....d penalty under section 158BFA {2} is not leviable if the return of income is not filed by the due date, but the income be assessed as undisclosed income within the meaning of section 158BB(1)(c). FACTS A search and seizure action under section 132 was carried out in the case of the assessee. The seized materials made out a case of undisclosed income. The Assessing Officer thus initiated proceedings under section 15880. The assessee furnished a return, declaring nil undisclosed income. The Assessing Officer proceeded to complete the assessment treating the capital gains in the hands of the assessee as undisclosed income. The capital gains being assessed in the block assessment, tax was levied at rate of 60 per cent. It was in view of the above that the penalty was also levied. However, it was also on record that immediately after the search action, the assessee has filed a voluntary return offering the capital gains for taxation. The assessee computed the tax liability at 20 per cent, applicable to long term capital gains. The return filed by the assessee was anyhow belated. The Assessing Officer did not take into cognizance the belated return and completed the assessment accor....
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....e facts and circumstances of the case, it was opined that the levy of penalty was not justified. It was to be deleted. [para8] In result appeal filed by the assessee was to be allowed. N 4.7 Here, I would also like to take strength from the decision dated 12.11.2008 of Delhi High Court in the case of CIT vs. Harkaram Das Ved Pal (117 Taxman 398) Delhi where Hon'ble Court has held that the penalty imposable under section 158BFA(2) is not mandatory, and AD must use his judicial consideration before imposing, the penalty. The foot notes of the said decision read as under: "Section 158BFA of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Block period 1-4-1999 to 6-7-2000 - Whether Legislature did not intend imposition of penalty under section 158BFA{2} by itself to be mandatory; rather it intended same to be left to discretion, which of course has to be exercised upon judicial considerations of Assessing Officer - Held, yes - Whether a pre-condition for imposition of penalty under section 158BFA{2} is that there must be a determination of undisclosed income by Assessing Officer under clause (c) of section 158BC - Held....
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....missions and perused the material on record. The uncontroverted facts of the case as noticed by the CIT(A) are as follows:- (i) the investment in shares (which were sold during the year and on which long term has been earned) were duly been reflected in the financial account of the year in which they were purchased. (ii) the sale consideration/gain which has been received during the year under consideration has duly been deposited in the declared bank account of the appellant. (iii) the unaudited profit and loss account and balance sheet which were found during the search, duly contains the recording of the transaction of sale of these shares, on which the capital gain of Rs. 18,94,080 has been earned and (iv) the return of income for Assessment Year 1999-2000 though was not filed by the due date i.e. 31.12.1999, but the same was filed on 31.03.2000 i.e. the time allowed as per the provision of section 139(4), and in their return of income the long term capital gain have duly been reflected. 7.1. From the above facts, it is clear that return of income was not filed within due date prescribed u/s 139(1) and in the meanwhile since there was a search, long term capital gain w....