AI Drafter 
TaxTMI 
TaxTMI 
2014 (4) TMI 1233
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....mp Pvt. Ltd., and income from house property, filed his return of income electronically on 27.09.2008 for the assessment year 2008-09, declaring income of Rs. 3,05,498/- and return was initially processed U/s. 143(1) of the Act. Subsequently the assessee filed a revised return admitting long term capital gain of Rs. 2,67,68,546/- in addition to the income already admitted. However, since the time limit for filing the revised return had lapsed, the Ld. Assessing Officer treated the revised return filed by the assessee as an invalid return. Thereafter, the Ld. Assessing Officer issued a notice U/s. 148 of the Act, which was served on 20.09.2011. Thereafter the Ld. Assessing Officer treated the amount of capital gain of Rs. 2,67,68,546/- declared by the assessee in his revised return as income escaped from assessment and re-assessed the income of the assessee under the head capital gain at Rs. 2,67,68,546/- against which penalty proceedings U/s. 271(1)(c) was also initiated. 4. Before the Ld. AO during the course of the re-assessment proceedings vide letter dated 23.02.2012 the assessee had clarified his stand as follows:- "During the previous year ended 31.03.2008, I s....
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.... show cause notice proposing to levy penalty U/s. 271(1)(c), the assessee had made the following submissions:- "The omission was due to a bonafide misconception of law. At time of filing the original return I was under the belief that the long term capital gain arising on the sale of agricultural lands at Kalapatti village on the outskirts of Coimbatore town was not liable to income-tax. However on professional consultations at a later stage, I came to know that the capital gain on the sale of agricultural lands within 8 km from the local limits of Coimbatore town would attract income-tax. On coming to know the correct legal position, I hastened to file my revised return voluntarily, admitting the long term capital gain on the sale of agricultural lands also therein, after paying the entire tax due on my revised total income together with interest thereon. I respectfully submit that I had no intention whatsoever to conceal any income at the time of filing of my original return. The omission was only due to misconception of law as I have explained time and again. My bonafide would be evident from the fact that the entire sale consideration was receiv....
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....the correct leg al position I voluntarily filed a revised return including therein the capital gain arising out of the sale of agricultural lands and paid the tax due thereon. Under the circumstances it cannot be said that there was deliberate concealment and my conduct was contumacious. 3. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstance found from which it can be gathered that the omission was attributable to an intention or desire on the part fo the assessee to hide or conceal the income as as to avoid the imposition of tax thereon. In order that a penalty U/s. 271(1)(c) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income ( K C Builders Vs. ACIT 265 ITR 562) 4. The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the Income Tax Authorities. No such inference could be made in my case since the entire sale consideration for the lands was recei....
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....r protection from penalty. Assessee is also a recognized business man in this locality and hence this plea of misconception of law is not acceptable. Assessee filed his original return of income on 27.09.2008 for the assessment year 2008-09 which is within the due date prescribed U/s. 139 of the Act. But the assessee has not filed the revised return within the time prescribed U/s. 139(5) of the income Tax Act 1961 which says "If any person, having furnished a return under subsection( 1), or in pursuance of a notice issued under sub section(1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. The professional consultation will not take so long to reveal the attraction of capital gain for the sale of the land. The reason stated by assessee is only an after-though. Assessee has said that the revised return field by him was voluntary. This is not accepted because of the following facts. 5) The Survey action U/s. 133A of the IT Act 1961 was conducted in the premises of Shri C....
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....s also shows that assessee attempted to conceal the actual sale as there is no point in entering into Power of authorization when the assessee had handed over the possession of the property and received the sale consideration from Shri C. Selvaraj which was evidenced by the above mentioned agreement and deeds. This reflects the intention of the assessee to conceal his land transaction with Shri C. Selvaraj and hence filed the original return with NIL capital gains income. Unless the 133A survey action was conducted upon Shri Selvaraj and this transaction was brought to the notice of the department, the assessee would not have filed the invalid Revised return on 13th Nov., 2011 just a date after the issue of notice U/s. 148 of the Act by the ITO Ward II(5) Coimbatore. The case laws referred by the assessee were not in conformity with the facts of the present case. To sum up, assessee has got a clear intention to conceal the income earned out of sale of property by means of handling over the possession of the property to Shri C. Selvaraj and on receipt of the sale consideration of Rs. 2,71,42,870/- which is in accordance with the unregistered sale agreement....
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..... Assessing Officer that filing of the return by the appellant was only after the detection of the concealment by the department. As seen from the evidence, it is obvious that the assessee had filed his return of income with the ACIT, Circle II taking into consideration of the capital gain earned by him. (iv) The facts clearly establishes that the assessee had filed the revised return of income declaring capital gain tax along with the challan for payment of tax before the department had initiated proceedings U/s. 148 of the Act. (v) The ratio laid down in the case Ld. CIT Vs. Kohinoor Impex Pvt. Ltd. by the Hon'ble High Court of Delhi states that if disclosure is made before detection of concealment then it may not attract penalty U/s. 271 (1) (c) of the Act. (vi) If the assessee was aware that the survey action on the premises of Shri Chinnasamy Selvaraj had taken place on 08.04.2011, he could have filed the revised return immediately in order to avoid any notice from the department, however, the assessee had filed the revised return on 13.09.2011 i.e., before the date of issue of notice U/s. 148 of the Act which shows that it was not an after-thought a....