AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 1141
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....premises of Shri Devi Das Sukhani at A-25, Shastri Nagar, Jodhpur and also from the premises of Devi Das Sukhani at B-45, Shastri Nagar, Jodhpur, certain incriminating documents belonging to the assessee were seized. Therefore, AO after recording the satisfaction/reasons in writing on 11th Jan., 2008 issued notice under s. 153(a) [sic- 153C) r/w s. 153A of the Act, which was duly served upon the assessee on 19th Jan., 2008. In response to the said notice, the assessee filed the return of income declaring total income of Rs. 7,18,027 on 24th April, 2008 for the assessment year under consideration and the assessment under s. 153C r/w s. 153A of the Act was completed on 23rd Dec, 2008 at total income of Rs. 7,68,030. The AO also initiated penalty proceedings under s. 271(l)(c) r/w s. 274 of the Act for concealing the particulars of income by the assessee in the original return which was filed on 18th Jan., 2005. The said penalty proceedings under s. 271(l)(c) of the Act were initiated for concealing the particulars of short-term capital gain of Rs. 3,36,584 arising from sale of plot No. E-48, Shastri Nagar, Jodhpur to Shri-Devi- Das-Sukhnani and profit on sale of agricultural land at ....
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....ticulars of the income. 4. The assessee also relies on the decision of Hon'ble Tribunal, Mumbai Bench in Asstt. CIT v. VIP Industries Ltd. [2009] 122 TTJ (Mumbai) (Trib.) 153 wherein it was held that the assessee agreeing to-addition under s. 41(1) on creditor's claim becoming barred by limitation there is no concealment attracting penalty under s. 271(l)(c)." 4. The AO did not find any merit in the above submissions of the assessee and held that assessee wilfully concealed the particulars of his income and deliberately furnished inaccurate particulars in the original return filed on 18th Jan., 2005. He, therefore, levied penalty of Rs. 2,00,000 on the tax sought to be evaded by him. 5. Being aggrieved, assessee carried the matter to the learned CIT(A) and furnished the written submissions, which are incorporated in para 4.5 of the impugned order and are reproduced verbatim as under : "With reference to the grounds of appeal as already furnished, the assessee "submits as under for your kind perusal and sympathetic consideration: 1. The learned Dy. CIT was not justified on facts and in law in imposing penalty of Rs. 2,00,000 under s. 271(l)(c) of IT Act, 1961. 2. Th....
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....ct. 5.2 The case of the assessee is squarely covered by the landmark judgment of the Supreme Court in CIT v. Suresh Chandra Mittal [2001] 170 CTR (SC) 182 : [2001] 251 ITR 9 (SC) wherein it was held that where the assessee filed revised returns showing higher income after search and notice for reopening of assessment, to purchase peace and avoid litigation and Department simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith, High Court has been justified in holding that no penalty could be levied. 5.3 The case of the assessee is also covered by the judgment of the Madhya Pradesh High Court in CIT v. Shyamlal M. Soni [2005] 144 Taxman 666 (MP), in which it has been held, penalty under s. 271(l)(c) could not be levied in the case, where the income returned in the revised return was accepted and assessed in the hands of the assessee though the revised returns were filed after search. The assessee also relies on the decision of Hon'ble Tribunal, Mumbai Bench in Asstt. CIT v. VIP Industries Ltd. (2009) 122 TTJ (Mumbai) 289, wherein it was held that the assessee agreeing to addition under s. 47(1) on creditor's claim becoming barred ....
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....eturn, even though it was not entitled, therefore, it does not mean that assessee concealed the income with view to gaining any unforeseeable benefit and in such a case penalty under s. 271(l)(c) was not imposable, there being no finding of AO that assessee had concealed the income or had furnished inaccurate particulars thereof. 6.4 It is settled proposition under the income-tax law that mere error in calculation does not amount to concealment of particulars of income. The case of the assessee is covered by the judgment of the Hon'ble Calcutta High Court in Udayan Mukherjee v. CIT [2007] 291 ITR 318 (Cal) wherein it was held that wrong calculation on the basis of a mistaken indexation does not come within the purview of s. 271(l)(c). 6.5 The assessee has acted bona fidely without any intention to evade tax. He has surrendered the impugned amount in his return filed under s. 153A on his own prior to initiation of penalty proceeding under s. 271(l)(c). There was no deliberate act on his part in concealing the said income. The primary burden of furnishing inaccurate particulars of income is on Revenue and it is only on discharge of primary burden that secondary burden of proof ....
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....ty should be imposed if the assessee was acting in honest and genuine belief in a particular manner, in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC), the apex Court has held that penalty should not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is matter of discretion of the authority to be exercised judicially and, on a consideration of all the relevant circumstances. Even if minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of provisions of the Act or when the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. 8. In addition to judicial pronouncements cited hereinabove the assessee also relies upon the following further judicial pronouncements : (i) In CIT v. E.V. Balashanmugham [2006] 206 CTR (Mad) 440 : (2006) 286 ITR 626 (Mad) it has been held that disclosure made by the assessee was true and correct and also the explanation offered by the assessee unsatisfactory, therefore, immunity, available ....
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.... the course of search, incriminating documents had been found and seized, which indicated liability on account of capital gains, therefore, the contention of the assessee was factually incorrect to say that such income had been shown voluntarily. According to him, there was no valid surrender under s. 132(4) of the Act and, therefore, immunity under Expln. 5 of s. 271(l)(c) of the Act was not available. He also pointed out that assessee claimed expenses of Rs. 1,45,255 on account of land filling and levelling charges and the AO made the disallowance of Rs. 50,000 only by considering that another amount of Rs. 95,000 was added under the head of sundry creditors. Learned CIT(A) confirmed the penalty levied by the AO and also observed that cases relied by the assessee were distinguishable on facts. Now, the assessee is in appeal. 7. Learned counsel for' the assessee reiterated the submissions made Before the authorities below and further submitted that the assessment under s. 153C of the Act was framed on the same income, which was disclosed by the assessee except an addition of Rs. 50,000 on estimate basis out of expenses. Therefore, there was no concealment of income and even i....
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....id that the addition made on estimate basis was on account of concealment of income or furnishing of inaccurate particulars of income. 10. As regards amount of Rs. 2,81,965 shown as profit on account of capital gain is concerned, it was claimed that the same had been shown earlier as a business income, So, at the most, it can be said that there was a wrong claim by the assessee in the original return, which has been corrected when return of income was filed under s. 153A of the Act. As regards, wrong claim vis-a-vis the penalty leviable under s. 271(l)(c) of the Act, the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. (supra) has held as under : "A glance at the provisions of s. 271(l)(c) of the IT Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word 'particulars' used in s. 271(l)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing ....