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TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 812
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....it does not state clear default for which it is issued". The CIT(A) erred in stating that "in the notice issued u/s 271 (l)(c) of the Act the default has been clearly specified". b) Without prejudice to above : The order passed by CIT(A) is invalid & bad as it violates principles of natural justice. The order is passed without considering and dealing with written submission filed with him in its proper perspective. 2. On merits : The CIT(A) erred is passing the order on original grounds of appeal and not considering revised grounds of appeal filed on 28.12.2017 3. (a) CIT(A) erred in confirming penalty not accepting the contention that : i. Income & claim both are disclosed in return of income ii. Claim allowed by officer after due verification. b) The CIT(A) erred in not accepting the contention that, it is settled principle that what is known to the department cannot be considered as concealment. c) The CIT(A) erred in confirming the penalty stating that "The appellants contention that all details have been furnished while filing the return of income is not correct". 4. The....
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....deduction u/s 54G for Rs. 74,65,134/- was claimed inadvertently on the misinterpretation of the provisions of law. Accordingly, the AO added the sum of Rs. 74,65,134/- on account of wrong deduction claim under section 54G of the Act. However, the AO in his assessment order passed u/s 143(3)/ 263 of the Act dated 30.08.2016 initiated the penalty proceedings u/s 271(1)(c) for furnishing inaccurate particulars of income. The AO subsequently issued a notice u/s 274 of the Act vide dated 30.08.2016 for levying penalty u/s 271(1)(c) of the Act on account of furnishing inaccurate particulars of income. The assessee in compliance to it, submitted that the deduction u/s 54G of the Act was claimed inadvertently and accordingly, the assessee agreed for the impugned addition before the learned Pr. CIT. The assessee has already paid the taxes for Rs. 25,91,680/- along with interest for Rs. 32,600/- on 15.03.2016 and 26.09.2016 respectively. Thus there should not be any question for levying the penalty under section 271(1)(c) of the Act. The assessee also submitted that all the necessary details about capital gain and its exemption u/s 54G were duly filed before the AO during the ass....
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.... asset situated at Ahmedabad which comes under the territory of urban area of Ahmedabad. Both the conditions required as for the Section 54G of the Act for claiming exemption under the said Section were not fulfilled in the instant case. During the assessment proceedings the assessee admitted to have made an error in claiming deduction u/s 54G of the Act. Accordingly, the AO has disallowed the claim of exemption u/s.54G of the Act. Thereafter penalty proceedings u/s.271(1)(c) of the Act was initiated. During the penalty proceedings the assessee has submitted that the incorrect claim u/s.54G in the return of income was the result of a genuine mistake on part of the assessee and that the assessee had accepted the mistake during the proceeding sunder the Act. The AO has rejected the submissions of the assessee and held that in a case where any particular filed in the return of income by the assessee found to be inaccurate, erroneous or false and which has an impact on total income return by the assessee. it would attract liability for penalty u/s.271(1)(c) for furnishing inaccurate particulars of income. Accordingly, the AO has levied penalty amounting to Rs. 22,62,000/- u/s.271(1)(c)....
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....isen on sale of property situated in an urban area and 2. The Industrial undertaken should be shifted to any area other than an urban area. In the instant case the capital gain had arisen on sale of non- agricultural land situated in non-notified urban area for the purpose of section 54G of the Act. Further the new capital asset purchased is also situated at Ahmedabad and comes under territory of urban area of Ahmedabad, This clearly shows that the appellant has failed to fulfill both the conditions prescribed u/s.54G of the Act. In spite of that the appellant has claimed deduction while filing the return of income. In the present case, the assessee made a claim which is not only incorrect in law but is also wholly without any basis and in such a situation it would be difficult to say that the appellant would still not be liable to penalty u/s.271(1)(c) of the Act. In various judgments, it is established that whenever there is a difference between the returned income and the assessed income, there is inference of concealment. The onus is on the assessee to rebut the inference of concealment, In the instant case, the assessee has failed to do so. The appellant'....
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.... Notice u/s 263 dated 12-02-2016 was issued. Appeared before Pr. Commissioner of Income Tax on 29-02-2016 and discussed the issue. After discussion, agreed for disallowance, to buy mental peace and to avoid long drawn litigation, as claim u/s 54-G found debatable. The Said agreement was made before Pr. Commissioner of Income Tax with clear understanding that penalty proceedings would not be initiated. Paid Rs. 25,91,680/- on 15-03-2016. Order u/s 263 is dated 16-03-2016. Order u/s 143(3) r.w.s 263 is dated 30-08-2016. Submission On facts, when details are dearly disclosed, allowed by AO after due verification, it cannot be concealment or inaccurate particulars of income. May it be wrong claim or claim wrongly allowed but question of furnishing inaccurate particulars of income does not arise. 1. Entire income declared in Return of income. All facts are on record. Not concealed any material facts. Delhi ITAT- Tide Water Marine International - 97 TTJ 139 Ahmedabad ITAT-Rupam Mercantile Ltd 91 ITD 237/85 TTJ 609 Ahmedabad ITAT -Gujarat State Financial Services Ltd - 39 SOT 570 Ahmedabad ITAT-A....
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....RBAN area means any such area within the limits of Municipal Corporation or Municipality as the Central Government may notify from time to time. The new property is situated at Sola, which according to me; fell outside the Ahmedabad Municipal Corporation at that time. Corporation limits were drastically changed during that period. On facts, I was advised regarding the allowability of deduction. I was under the bonafide belief that exemption would be available. All the relevant details like sale deed, purchase deed, distance etc. were produced during the assessment proceeding before the ACIT/ DCIT and after due verification the claim was allowed after scrutiny by two Officers. The point came under discussion with the Pr. CIT, who explained to us regarding the disallowability of the claim. But then it was agreed, that if we pay the due taxes, then no penalty would be levied. So I genuinely accepted the error on my part and paid the due taxes, to buy peace of mind, even before the order was passed by the Assessing officer. In view of the bonafide belief as stated above, the claim was made. I have not filed any inaccurate particulars while making the claim. ....
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....ested that penalty should be levied in this case." The ld. DR vehemently supported the order of the lower authorities. 5. We have heard the rival contentions and perused the materials available on record. The issue in the instant case relates to the deduction claimed by the Assessee u/s 54G of the Act. In fact, the deduction claimed by the Assessee u/s 54G of the Act was denied by the AO inconsequent to the direction issued by the learned CIT u/s 263 of the Act. The assessee during the proceedings u/s 263 of the Act agreed to the addition for the wrong claim of deduction u/s 54G of the Act for Rs. 74,65,134/- but submitted that it was claimed inadvertently. Therefore, the assessee pleaded before the lower authorities not to levy the penalty u/s 271(1)(c) of the Act. However, the AO was pleased to levy the penalty on account of furnishing of inaccurate particulars of income u/s 271(1)(c) of the Act and the view of the AO was subsequently upheld by the learned CIT(A). The learned AR before us has challenged the penalty order on two counts; firstly, the notice issued u/s 274 of the Act is defective, and secondly, the mistake was committed by him inadvertently due to wrong int....
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....d/or" may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi- criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. No such clear cut finding was reached by the IAC and, on that ground alone, the order of penalty passed by the IAC was liable to be struck down." In view of the above, we hold that not mentioning the specific charge in the notice issued u/s 274 of the Act cannot vitiate the penalty proceedings u/s 271(1)(c) of the Act. The case law relied on the learned AR, i.e. CIT vs. SSA's Emerald Meadows is not applicable to the instant facts of the case. The Hon'ble Supreme Court, in this case, has just dismissed the SLP, and therefore it cannot be said that the order of Hon'ble High Court got merged with the order Hon'ble Supreme Court. In this regard we find support & guidance from the judgment of Hon'ble Supreme Court in the case of Workmen of Cochin Port Trust v. Board of Trustees of the Cochin Port Trust [1978] 3 SCC 119 (a three-Judge Bench's dec....
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....section 263 of the Act, cannot be the ground for not levying the penalty. In this regard, we also rely on the judgment of Supreme Court in the case of MAK Data (p) Ltd. Vs. CIT reported in 38 taxmann.com 448 wherein it was held as under: "8. Assessee has only stated that he had surrendered the additional sum of Rs. 40,74,000/- with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the explanation 1 to Section 271(l)(c) of the Act. It is trite law that the voluntary disclosure does not release the Appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntar....