TaxTMI 
TaxTMI 
2021 (2) TMI 1030
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....ircumstances of the case and in law, there is apparent disconnect between the order levying the penalty and the appellate order confirming the penalty. 3. That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that the inadvertent error of not taking into account the long term capital gains in computing book profit under section 115JB of the Act was set right much before the assessment proceedings were effectively taken up. 3.1 That on facts and circumstances of the case and in law, the mere fact that the revised return enhancing the book profit by the long term capital gains was filed after issuance of notice under section 143(2) of the Act did not take away bonafide and voluntary declaration of the correct income without any detection by the Department." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment order dated 27.10.2010 framed u/s 143 (3) of the Income-tax Act, 1961 (for short 'the Act'), penalty proceedings have been initiated against the assessee for filing inaccurate particulars of income. Assessee filed original return of income on 30.09.2008 declaring an....
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.... dated 01.10.2018 & decision of Hon'ble Rajasthan High Court in Anoopgarh Kraya Vikraya Sahakari Samiti Ltd. vs. ACIT (2015) 374 ITR 558 (Raj.). 6. However, on the other hand, ld. DR for the Revenue to repel the arguments addressed by the ld. AR for the assessee contended that it is a clear case of furnishing of inaccurate particulars of income because revised return has been filed by the assessee company after five months only when notice u/s 143(2) of the Act was issued and that had there been no scrutiny assessment, the income would not have been brought to tax and relied upon the order passed by the ld. CIT (A). 7. In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower authorities and arguments addressed by the authorized representatives of both the parties to the appeal, the sole question arises for determination in this case is:- "as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings?" 8. Undisputedly, in the original return of income, assessee has disclosed all the true and full particulars relating to sale of shares and long ter....
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....ct, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representatives you may show cause in writing on or before the said date which will be considers before any such order is made under section 271. Sd/- Assessing Officer, Central Circle 20, New Delhi." 12. Bare perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for "concealment of particulars of income" or "furnishing of inaccurate particulars of such income" by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. 13. Hon'ble Apex Court in case of CIT vs. SSA's Emerald Meadows - (2016) 73 taxmann.com 248 (SC) while dismissing the SLP filed by t....
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....y the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act the same has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. 16. Even otherwise, when the assessee has duly produced balance sheet and profit & loss account before the AO during the assessment proceedings and the income computed in the profit & loss account has been accepted and at the same time, it is nowhere the case of the Revenue that assessee has furnished false information or has not furnished necessary information. 17. So, mere mistake, claimed to be inadvertent by the assessee, is not a concealment of income by furnishing of inaccurate particulars in the facts and circumstances of the case, when the assessee has filed revised computation of book profit claiming correct figures acceptable to the Revenue. So far as question of filing the revised return only after issuance of notice u/s 143 (2) of the Act to the assessee is concerned, it is again undisputed fact that with the notice u/s 143(2), no questionnaire was issued pointing out wrongly computing the book profit, leading to the reasonable inference that the mistake....
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.... procedure was, however, not acted upon. On the contrary, it is the deemed income assessed under section 115JB which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed under section 115JB. Hence, when the computation was made under section 115JB, the concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. The upshot of the aforesaid discussion would be to sustain the order of the Tribunal, though on different grounds. Therefore, while the reasoning and approach of the Tribunal is not tenable, for the reasons disclosed above, penalty could not have been imposed even in respect of the false claim of depreciation made by the assessee. Cl T v. Gold Coin Health Food (P) Ltd. [2008] 304 ITR 308 (SC) ; [2008] 218 CTR (SC) 359 ; [2008] 11 DTR (SC) 185 distinguished." 15. On the facts and circumstances we are of the view that the issue involved is squarely covered by Division Bench Decision of this court in the case of Aleo Manali Hydro Power (P) Ltd. (supra). 16. The book profit disclosed by the assessee for the purpose of the liability of tax under sect....