TaxTMI 
TaxTMI 
2017 (11) TMI 801
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.... identical issue, they were heard together and they are being disposed of through this common order. 2. The brief facts in assessment year 2005-06 are that the assessment was completed at an income of Rs. 43,63,166/- against the returned income of Rs. 43,23,166/-. While making the assessment, the AO treated income from short-term capital gains amounting to Rs. 42,09,883/- as business income. Against the order of the assessing officer, the assessee successfully contested before the first appellate authority. However, the ITAT decided the issue in favour of the Income Tax Department and upheld the findings of the AO. The change of head of income from capital gains to business income resulted in difference in the tax rate. Subsequent to the o....
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....essment year 2007-08, the return of income was filed declaring income of rupees 25,35,470/- on account of shortterm capital gain from sale of shares held by the assessee as investment. However, the AO proceeded to hold that the income was from business and not from short-term capital gains. The AO's view was confirmed by the Ld. CIT (Appeals) as well as by the ITAT. Thereafter, the AO imposed a penalty of Rs. 5,69,000/- under section 271(1)(c) of the Act, which on appeal, was deleted by the Ld. Commissioner of Income Tax (Appeals) vide order dated 15/09/2014. Now, the Department has approached the ITAT and has challenged the aforesaid deletion of the penalty by the Ld. CIT (Appeals). 2.3 For assessment year 2008-09, the return of income wa....
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....he same and material to the computation of total income have been disclosed, the amount added or disallowed in computing the total income is deemed to represent the concealed income. The Ld. Sr. DR submitted that this penalty is neither criminal nor quasi-criminal but a civil liability and in such cases mens rea was not essential. It was submitted that on facts, the penalty had been rightly imposed. Reliance was also placed by the Ld. Sr. DR on the judgment of the Hon'ble Delhi High Court in the case of CIT v. Zoom Communications Ltd reported in 327 ITR 510(Del) for the proposition that a claim wholly untenable in law and lacking bona fide will attract penalty. 4. In response, the Ld. Authorised Representative submitted that the penalty wa....
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....ome. Reliance was also placed on another judgment of the Hon'ble Delhi High Court in the case of CIT vs. Amit Jain reported in 351 ITR 74 (Delhi) wherein, on identical facts, the order of the ITAT was upheld by Hon'ble Delhi High Court. 5. We have heard the rival submissions and have perused the material on record. The facts of the case are undisputed. It is undisputed that penalty has been levied only on the change of head of income from 'short-term capital gains' to 'business income'. Although the ITAT has upheld the view of the AO that the impugned income was chargeable under the head "short-term capital gains" in all the four years, it is settled law that assessment and penalty proceedings are distinct. The Hon'ble Apex Court has held ....
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.... the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The Ld. counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an i....
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....TAT. On an appeal by the Department, the Hon'ble High Court of Delhi held dismissing the appeal that the amount in question, which formed the basis for the AO to levy penalty, was in fact to fully reported in the returns. The Hon'ble Delhi High Court held that in view of this circumstance, that the AO chose to treat the income under some other head could not characterise the particulars reported in the return as "inaccurate particulars" or as suppression of facts. The Hon'ble Delhi High Court held that the ITAT was not in error in deleting the penalty while placing reliance upon the decision in CIT versus Reliance Petroproducts Private Limited (supra). 5.2 In the appeals before us, it is undisputed that the impugned amounts, which formed t....