TaxTMI 
TaxTMI 
2019 (9) TMI 934
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.... entry regarding Long Term Capital Gains vide letter dated 30.9.2015. Thereafter the assessee filed a revised return on 8.10.2015 declaring the said income of Rs. 41,55,876/- shown in the original return as Long Term Capital Gains, as "income from other sources" and paid the due taxes thereupon. Thereafter the assessment u/s 143(3) of the Act was carried out in the case of the assessee. During the assessment proceedings, the A.O. observed that the aforesaid surrender of income of Rs. 41,55,876/- as "income from other sources" in the revised return, was an "undisclosed income" of the assessee as the assessee in the original return, had claimed the same to be tax exempt. Had the assessee been not summoned by the Investigation Wing, the assessee would not have revised his return to offer for taxation the aforesaid amount of Rs. 41,55,876. The A.O. further observed that though the assessee had surrendered the aforesaid amount of Rs. 41,55,876/- in front of the DDIT (Investigation), Ludhiana but did not submit the return (ITR-V) online to the Central Processing Centre (CPC), Bangaluru but during scrutiny assessment proceedings, the assessee offered the said income for taxation. That sin....
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.... attention to the provisions of section 139(5) of the Act, as applicable in the assessment year under consideration, which read as under: "139(5) If any person, having furnished a return under sub-section (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." 6. The Ld.Counsel for the asssessee, therefore, has submitted that as per the relevant provisions of section 139(5) of the Act, an assessee is entitled to file a revised return within the stipulated period as prescribed under the aforesaid provisions of section 139(5) of the Act, if he discovers any omission or any wrong statement in the return originally filed u/s 139(1) of the Act. That in this case, the assessee has filed the revised return on 8.10.2015, which was within the limitation period prescribed for filing the revised return. Hence, the revised return filed by the assessee was a valid return and the A.O. was supposed to make the assessment taking the r....
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....rein the following observations have been made by the Coordinate Chandigarh Bench of the Tribunal: "15. Before proceedings further, we deem it fit to first discuss the relevant provisions of section 271(1)(c) of the Act as they stood during the relevant period / assessment year under consideration. "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person- ....... (c) has concealed the particulars of his income or furnished inaccurate particulars of [such income, or] ...... he may direct that such person shall pay by way of penalty,- ..... [(iii) in the cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits. Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fail....
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....der section 148; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished." 16. A perusal of the above referred to section 271(1)(c) of the Act reveals that there are two parts of this section. The first part speaks about the charge which may invite penalty i.e. a person has concealed 'particulars' of his income or furnished inaccurate particulars of income, he may be directed to pay certain sum by way of penalty as penalty. Now, the second part speaks about the quantum of amount payable. As per clause (iii), the Assessing officer may direct such a person against whom the above charge is established to pay in addition to the tax, if any, payable a sum which is not less than, but which shall not exceed three times, the amount of tax sought to the evaded by a reason of such concealment of particulars of income or furnishing of inaccurate particulars of income. 17. Now, Explanation 1 strongly relied upon by the Ld. DR speaks about of deeming ficti....
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....self-assessment tax paid before the issue of notice u/s 148 of the Act. As per the above said provision what is material is the evasion of the tax and in that scenario, if a person does not file a return and, hence, does not disclose his particulars of income and meaning thereby concealed his particulars of income but if he before the issuance of notice for the reopening of the assessment u/s 148 of the Act, had deposited due taxes and the resultant addition after assessment does not create any liability to pay any further tax, there will be no tax sought to be evaded. 19. Now coming to the relevant clause (c) to Explanation 4, which is residuary clause which speaks that in any other case, the difference between the total income assessed and the tax that would have been chargeable, had such total income been reduced by the amount of income in respect of which particulars have been concealed which means that the tax payable on the income in respect of which particulars have been concealed or inaccurate particulars of income furnished. 20. A collective reading of all the three clauses reveal that for the calculation of the quantum of penalty, it is not the income in respect ....
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....her head of income or brought forward from earlier years, the total income is reduced to a figure lower than the concealed income or even to a minus figure, 'the tax sought to be evaded' will mean the tax chargeable on the concealed income as if it were the total income. Another exception to the general definition of the expression 'tax sought to be evaded' given earlier is a case to which Explanation 3 applies. Here, the tax sought to be evaded will be the tax chargeable on the entire total income assessed." 21. Even in the Explanation 1, what is relevant is any fact material to computation of total income of any person regarding which such person fails to offer an 'Explanation' or Explanation which is found to be false by the Income-tax authorities or an Explanation which is not able to substantiate, then, the amount added or disallowed in computing total income of such person as a result thereof deemed to represent the income in respect of which particulars have been concealed. So, firstly what is relevant is the material fact to the computation of total income. The word 'computation' here is relevant which means that the fact must be material which has the effect of any addi....
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....referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a), the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance 16[or set off of any loss] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) 16a[and clause (b)] of sub-section (1)." Section 271AAC "271AAC. (1) The Assessing Officer may, notwithstanding anything contained in this Act other than the provisions of section 271AAB, direct that, in a case where the income determined includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D for any previous year, the assessee shall pay by way of penalty, in addition to tax payable u....
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....heir income of the assessment year under consideration in the return of income and paying taxes @ 30% as provided u/s 115BBC of the Act, act of the assessee was taken as contributory factor in failure of the Voluntary Disclosure Scheme. Hence, to curb this practice, the government substituted sub section (1) of section 115 BBE to provide that wherein in the return of income furnished by the assessee, the total income of an assessee includes an income referred to in sections 68, 69, 69A, 69B and 69 C or section 69D, or otherwise added or determined by the Assessing officer during the assessment proceedings under the above provisions, then the tax at the flat rate of 60% will be payable on such an income disclosed or determined. Further to mark a difference between the self-declared income in the aforesaid provisions and the cases where the Assessing officer determined /detected such income in the aforesaid sections 68, 69, 69A, 69B and 69 C or section 69D, the penalty provisions of section 271AAC comes into operation which provides that if such an income is suo moto declared by the assessee in his return, then no penalty is leviable and if it is otherwise detected by the Assessing o....
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....be a fit case for levy of penalty u/s 271(1)(c) of the Act. 26. Even otherwise, a perusal of clause (iii) to section 271(1) reveals that as per the relevant provisions, the Assessing officer may direct a person who as per clause (c) has concealed the particulars of income or furnished inaccurate particulars of such income to pay by way of penalty, a sum which shall not be less than but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income. So as per the above provisions for the levy of penalty there must be some amount of tax sought to be evaded which should be by reason of the concealment of particulars of income or furnishing of inaccurate particulars of income of such income by the assessee. Hence, if there is no amount of tax sought to be evaded by reason of concealment of particulars of income or inaccurate particulars of income, the penalty cannot be computed or to say that the penalty under the provisions will be 'Nil'. It is pertinent to mention here that Explanation-1 to section 271(1)(c) of the Act also provides that if a person fails to offer an explanation or explanation offered is found to....