TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 440
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....s 10(38) of Rs. 3,51,94,419/- towards long term capital gains (LTCG) on listed securities. 2.1 Thereafter, search and seizure operations u/s 132 of the Income-tax Act, 1961 (in short 'the Act') were conducted and warrant of authorization was executed on 21/01/2016. The assessee filed revised return of income on 12/04/2016 admitting income of Rs. 4,18,41,710/-. In the original return of income filed by the assessee, LTCG was claimed u/s 10(38) of the Act, which led the AO to initiate penalty proceedings u/s 271(1)(c) on the ground that the assessee has concealed his income to the extent tax was leviable on account of LTCG. Accordingly, vide order dated 09/08/2018, the AO levied penalty at Rs. 1,22,00,000/- u/s 271(1)(c) relying on the decision of Hon'ble Supreme Court in the case of MAK Data (P) Ltd., [2013] 38 Taxmann.com 448 (SC). 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee filed written submissions, which were extracted by the CIT(A) at pages 5 to 7 of his order. After considering the submissions of the assessee, the CIT(A) upheld the penalty levied by the AO. 4. Aggrieved by the order of CIT(A), the asse....
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....ealment of income or for furnishing of inaccurate particulars of income and therefore, the notice issued was invalid, bad in law and without jurisdiction and thus, the Ld. CIT(A) erred in confirming the levy of penalty u/s 271 (1)(c) of the Act at Rs. 1,22,00,000/-" 5. Before us, the ld. AR of the assessee brought to the facts of the case and submitted that assessee has already disclosed the transaction of capital gains in the original return of income itself and claimed exemption u/s 10(38) of the Act and subsequently, after the search, assessee has withdrawn the claim of exemption u/s 10(38) in the revised return of income, which was submitted against the notice u/s 153A of the Act. He, therefore, submitted that there is no incriminating material/information found during the search and it will not fall under the category of furnishing inaccurate particulars of income. He relied on the decision of the AP High Court in the case of Pr. CIT Vs. Smt. Baisetty Ravathi, ITTA No. 684 of 2016, vide judgement dated 13/07/2017. He relied on the ratio laid down by the Hon'ble Court in the said case to submit that the decision of Hon'ble Supreme Court in the case of MAK Data (P) Ltd., (supra....
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....ed for furnishing of inaccurate particulars of income or concealment of income. In the case before us, we do not find that it is a case of furnishing of inaccurate particulars of income or concealment of income, because, the assessee had declared LTCG and had claimed it as exempt u/s 10(38) of the Act on the ground that shares have suffered STT, but subsequently withdrew the claim of exemption. This may, at most be considered as an unsubstantiated or wrong claim but it cannot be held to be furnishing of inaccurate particulars of income or concealment of income. The Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products (P) Ltd (2010) 322 ITR 158 has considered the import of these phrases used in the section to hold as under: "8. A glance at this provision would suggest that in order to be covered, 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. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the learned Counsel for revenue suggested that by making incorrect claim for the expenditure on interest,....
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....on to hold therein that in order to attract the penalty under section 271(1)(c), mens rea was necessary, as according to the Court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause (iii) of section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The Court ultimately went on....