TaxTMI 
TaxTMI 
2016 (7) TMI 740
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..../-. During the course of hearing the assessee appeared in person and submitted that he was not getting requisite assistance from his counsel. Keeping in view the situation of the assessee and facts and circumstances of the case, this bench appointed Ms. Asmita Gupta as amicus curie assisted by her colleagues Yahya Batatawala / Anupriya Aggarwal / Nikita Panhalkar / Tripti Jain, who were present in the court room at the time of hearing and volunteered to assist the bench. On behalf of the department, the appeal was argued by Shri Rakesh Ranjan, Senior Ld. Departmental Representative for the Revenue. 3. Ms. Gupta submitted that in this case, no penalty should have been levied as assessee was a layman belonging to a rural background and was....
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....eing the agriculture land. The land record extract also states the land in question being the agriculture land. On the advice of his then chartered accountant, the assessee was of the belief that the sale of agriculture land is not taxable to long term capital Gains. It is undisputed fact that the assessee had acted under professional advice of a chartered accountant, who filed his return of income, wherein, as per the advice then received, the land at GOA being agriculture in nature, did not attract the provisions of Income Tax Act, so as to make the gain arising on the sale thereof as taxable. In this context, reliance is placed on the following decision, wherein, addition attributable to the mistake of the Tax Consultant does not attr....
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....rnishing of an inaccurate particulars of such income. Mere disallowance of a claim in the assessment proceedings cannot be a sole basis for levying penalty under Section 271(1)(c) of the Act under Section 271(1)(c) of the Act which is quasi-criminal proceeding in its nature. It is further submitted that there is no material evidence on record relating to the addition made by the AO, which suggest any concealment, or furnishing of inaccurate particulars by the Appellant. It is therefore submitted that mere disallowance / additions in assessment proceedings is not for levying penalty under Section 271(1)(c) of the Act. The facts and circumstances relating the only addition made by the AO and further not disputed in appeal are as under:- ....
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....oved that the impugned land is an agricultural land. Further complete details relating to the addition were filed before the AO during the course of assessment proceedings, the same is only a difference of opinion and hence there is neither any concealment of income nor furnishing of inaccurate particulars of such income. Under section 271(1)(c) of the Act the penalty can be imposed only when it is found that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. The section presupposes a conscious act on the part of the Appellant to have concealed income or furnish inaccurate particulars of such income and merely because the additions/disallowances have been made in the assessment or....
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....as agricultural land in the land records maintained with the local authorities. This fact is also not denied that the assessee belonged to a rural background and he is not well educated. The assessee is apparently not aware of the 'nitty-gritties' of the income-tax proceedings. The assessee was personally present in the court room. He had apparently acted on the advice of other persons, who were indeed not competent enough to advise the assessee. These facts have nowhere been denied by the AO or Ld. CIT(A). The conduct of the assessee has been such that the moment he came to know that agricultural land may be situated within 8 kms of the municipal limits, and therefore, it may not be exempt from income-tax, he immediately revised the return....
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....uj), wherein it was held that if the assessee gives an explanation which remains unproved, but, is not disproved, no penalty is imposable. Identical view was taken by Hon'ble Bombay High Court in the case of CIT vs Upendra V. Mithani (ITA No 1860 of 2009 Dt 5th August, 2009), wherein following observations were made: "The issue involved in the appeal revolves around deletion of penalty under Section 271(1)(c) of the I.T. Act. The Tribunal has concurred with the view taken by the Commissioner of Income Tax (A). The Commissioner of Income Tax (A) has rightly taken a view that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hy....