2019 (1) TMI 277

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....ned Commissioner of Income Tax (Appeals) erred in confirming the penalty order under sec.271(1)(c) inter alia erred in giving finding that the assessee has concealed the particulars of income in reference to the sale of property of Rs. 30,46,950/-. It is prayed that the penalty levied may please be cancelled. 2. The Learned Commissioner of Income Tax (Appeals) has erred in not appreciating the facts that the concerned Accountant has filed affidavit and thereafter he has not been cross examined by the Assessing Officer, and as such, the factual aspect brought to the notice by the Accountant in the affidavit is required to be believed in toto, and therefore, the penalty levied may please be cancelled on the ground of 'bona fide' of the assessee. 3. Without prejudice, the learned Commissioner of Income Tax (Appeals) has erred in not appreciating the fact that the property in dispute was purchased by the parents of the assessee at Jodhpur by their source of income and ultimately it has been sold by them at Jodhpur, and hence, the sales consideration has not been given to the assessee nor the same has been reflected in any bank account at Ahmedabad, and therefo....

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.... that vide letter dated 13.01.2012 submitted that the accountant had been filing her return of income since the year 2006-07 who is 60 years of age. 5.4 The accountant was assigned the task to file the return of income for the year under consideration declaring the capital gain income. However, the accountant has not included the capital gain income in return filed by her. Therefore it was a mistake of the accountant who has not declared the capital gain income in return filed by her. 5.5 The assessee further submitted that the accountant brought the mistake of not declaring capital gain income in return filed by her. Accordingly, the accountant prepared a fresh return dated 01.08.2010 disclosing the income under the head capital gain. However, in the meantime, she (assessee) received a notice u/s 143(2), dated 31.08.2010. Therefore the assessee decided to declare the income under the head capital gain during the assessment proceedings. 5.6 The assessee in support of his argument has also furnished the affidavit of the accountant dated 21.11.2011 which is reproduced as under: "6.1 The attention is also drawn to the facts that, assessee's Accountant ha....

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....he accountant will normally verify the bank account of the assessee before the filing of income tax return. iii. The notices u/s 142(1) were issued to the assessee on different dates, but the assessee did not accept her mistake for not disclosing capital gain income till a specific inquiry was raised to the assessee vide letter dated 11.10.2011 about the undisclosed income of capital gain. Because of the above, the AO concluded that there is concealment of income and levied the penalty amounting to Rs. 5,71,406/- being 100% of the tax amount sought to be evaded on account of concealment of the particulars of income. 6. Aggrieved, assessee preferred an appeal to the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that the AO had not examined the contents of the affidavit furnished by the accountant during the penalty proceedings. Therefore it has to be believed in totality. Besides, the accountant has not been cross-examined by the AO. As such, the AO has not considered the affidavit, and no reason was assigned for the same. Accordingly, no defect was pointed in the contents of the affidavit. 6.1 There was no mala-fide act on the part of the assessee for n....

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....sions as mentioned above. On careful consideration I am of the view, that no satisfactory or reasonable cause was explained by the appellant neither during assessment proceedings, penalty proceedings nor during appellate proceedings. The Appellant is an adult, educated lady and she is responsible for facts disclosed or not disclosed in the return of income. The deal involved huge amount of money and the transaction took place during the A.Y. in question. There was no ground for not showing the capital gain In the return, The plea of mistake of accountant is not acceptable. The case laws referred by the AR are also of to the appellant in the matter as the facts are distinguishable. Thus, taking into account entire facts and the circumstances of the case, I hold that the Assessing Officer was justified in levying penalty u/s.271(l)(c) of Rs. 571406/- in respect of Long Term Capital Gain which arose for sale of property at Rs. 30,46,950/-." Being aggrieved by the order of the Ld. CIT(A) assessee is in appeal before us. 7. The Ld. AR before us filed a paper book running from pages 1-150 and submitted that the assessee had disclosed her PAN in the sale deed which reveals ....

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....10.2011 9.1 In the notice issued u/s 142(1) dated 11.10.2011 a specific query was raised by the AO about the capital gain income. After that, the assessee vide reply dated 22.11.2011 conceded the fact of non-disclosing the capital gain income. From the above, it is transpired that the assessee did not offer the capital gain income su moto for a quite long time until the AO raised the specific query about the undisclosed income. 9.2 The overall conduct of the assessee and circumstances suggest that the assessee deliberately did not offer the capital gain income in her income tax return. In our considered view, non-availability of the fund cannot be an excuse for not disclosing the capital gain income earned by the assessee. The case law relied on by the assessee before the lower authorities are not relevant to the facts of the case on hand. Therefore, we are of the view that the assessee has concealed her particulars of income by not disclosing the long-term capital gain in her return of income. Therefore, we do not find any reason to disturb the finding of the Ld. CIT(A). Hence, the ground of the assessee is dismissed. 10. The second issue raised by the assessee in the ....

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.... language of "and/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." From the above judgment, it is clear that the defect in the notice issued u/s 274 of the Act cannot be fatal to the penalty proceedings initiated u/s 271(1)(c) of the Act. The judgment of Hon'ble Gujarat High Court in the case of Snita Transport Company (supra) being jurisdictional High Court is binding of own. Therefore, we cannot take any guidance in support of the assessee contention from the judgments delivered by the various Non- Jurisdictional High Courts. We also note that the Hon'ble Supreme Court has dismissed the appeal filed by the Revenue in the case of CIT Vs. SSA's Emerald on the issue of defective notice. However, The Apex Court did lay down any law on the issue of de....