TaxTMI 
TaxTMI 
2022 (5) TMI 729
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....tice issued by the Assessing Officer does not bring out the exact charge against the Appellant. 3. The Commissioner of Income Tax (Appeals) erred in not considering that the advance sale consideration received of Rs.25 Crores is duly disclosed in the balance sheet as on 31.03.2010 itself and also disclosed the gains in this year's balance sheet. 4. The Commissioner of Income Tax (Appeals) erred in not considering the fact that any document filed by the assessee either with the Return or thereafter was found to be inaccurate. Nowhere in the assessment order or in the penalty order, the Assessing Officer found as a fact that any document has been concealed or suppressed by the assessee, and hence the Commissioner of Income Tax (Appeals) ought to have cancelled the penalty. 5. The Learned Commissioner of Income Tax (Appeals) failed to note that before levying penalty, it is the duty of the Assessing Officer to bring incriminating fact/cogent material or evidence from which it could be inferred that the appellant has concealed / deliberately furnished inaccurate particulars of its income. 6. The Commissioner of Income Tax (Appeals) erred in not n....
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....sonal crops and later wanted to carry out modern agricultural activity. But due to non-viability of the project, the assessee, in the year 2007, planted mango trees and coconut trees. The assessee also submitted that the land was sold as agricultural land only and it was buyer who had applied for various approvals etc. for conversion of land. The assessee contended that the land was located outside the limits of local municipality and it could not be considered as 'Capital Asset' within the meaning of Sec. 2(14) of the Act. 4.2 However, it was noted by Ld. AO that the assessee entered into Joint Development Agreement (JDA) with M/s Akshaya Private Limited (Developer) on 14.12.2009 for the development of said land and constructing residential flats on the land. As per the agreement, the assessee was to provide the land for which 20% of the built-up area was to vest in the assessee. It was opined by Ld. AO that the nature of land automatically changes from agricultural to non-agricultural, once the joint venture agreement is entered into with the developers as held in various judicial decisions. It was also noted by Ld. AO that DTPC (appropriate authority) approval was also obtain....
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.... it has not so far filed any revised return of income. The assessee was getting professional advices and it could not be a case that the assessee did not know the difference between the sale of land as such and sale through joint venture. Therefore, claiming the taxable income to be agricultural income clearly denotes furnishing of inaccurate particulars of income within the meaning of Section 271(1)(c) of the Act. The case laws being relied upon by the assessee including the decision in CIT V/s Reliance Petro Products Private Ltd. (322 ITR 158) were held to be distinguishable. Rather the decision of Hon'ble Apex Court in CIT V/s Mak Data Private Ltd. (38 Taxmann.com 448) was held to be applicable where the penalty was upheld. Finally, penalty was levied for furnishing of inaccurate particulars of income and the same was quantified at Rs.372 Lacs. Appellate Proceedings 6.1 During appellate proceedings, the assessee assailed the penalty on legal grounds and submitted that the show-cause notice issued by Ld. AO did not bring out exact charge against the assessee. The provisions of Sec.271(1)(c) comprises of two parts i.e., concealment of income and furnishing of inaccurate part....
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....ee, the same would not absolve assessee of penal consequence as held by Hon'ble Supreme Court in the case of CIT V/s Mak Data Private Ltd (supra). 6.3 Regarding assessee's submissions that notice u/s 271(1)(c) did not specify the exact charge i.e., concealment of income or furnishing of inaccurate particulars income, it was seen that assessment proceedings were concluded after detailed discussion with the assessee. The assessee was in real estate business and it would be too far-fetched to believe that income from transfer of land was claimed as exempt income without the knowledge or conscious decision being taken by the assessee especially where they were ably advised by the experienced professionals. The assessee clearly concealed the fact that it was nonagricultural land and by claiming it to be agricultural land in the return of income. The aforesaid fact would not have come to light but for the fact that the case was scrutinized to verify this issue. The assessee also furnished inaccurate particulars of income with regard to what part of income was to be considered under the head 'business income' and what part of the income was assessable under the head 'capital gains'. Th....
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....gricultural land only and any income arising there from would be agricultural income only which is exempt from tax. On the basis of said belief, the assessee separately disclosed sale of agricultural land in the financial statements as well as in the computation of income. Upon perusal of these documents, it could be well said that the transaction was duly disclosed in the financial statement as well as in the return of income and it could not be said that there was any concealment of particulars of income by the assessee. No mala-fide intention could be attributed on the part of the assessee to conceal the income or to furnish inaccurate particulars of income. The assessee made a claim in the return of income which was not accepted by Ld. AO. However, this fact alone would not necessarily justify imposition of penalty as per the decision of Hon'ble Supreme Court in the case of CIT V/s Reliance Petro Products Private Ltd. (322 ITR 158). The case law of Hon'ble Apex Court in CIT V/s Mak Data Private Ltd. (38 Taxmann.com 448) as cited by lower authorities is a case where offer of surrender of certain amount received as share application money was made by assessee in view of detection....
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....ceedings under section 271(1)(c). The Hon'ble Court held that since the assessee had mentioned about sale of its land in his return of income but only mistakenly claimed the same as agricultural land and there was no specific finding regarding concealment of income against assessee, impugned penalty proceedings under section 271(1)(c) was to be set aside. The assessee had produced all facts of transactions, namely sale documents, materials, etc., before Ld. AO and the entire amount of sale consideration was received by assessee through banking channels. It was also observed by Hon'ble Court that the impugned notice under section 271(1)(c) did not specifically state as to whether assessee was guilty of concealing particulars of his income or had furnished inaccurate particulars of income. Therefore, there was no specific finding regarding concealment of income against assessee. Hence, the impugned penalty was invalid and same was to be set aside. The adjudication of Hon'ble Court was as under: - 18. The first aspect is as to whether there is any concealment of particulars of the assessee's income. At the first instance i.e. during the scrutiny assessment, the assessee s....
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.... Officer that the lands in Egattur Village were agricultural lands, which were treated to be a capital asset. Therefore, there wasno material available with the Assessing Officer to allege concealment of particulars of income. 22. With regard to furnishing of inaccurate particulars, the stand taken by the assessee was that both lands were agricultural lands, that he had been carrying on agricultural operations for 27 years, that he had been filing return of income regularly and that the source of income was from agricultural income and interest income from bank deposits. These facts were never disputed by the Assessing Officer. 23. After receipt of the penalty notice, the assessee submitted a reply dated 11.4.2016 wherein the assessee reiterated the stand taken in his letter dated 15.3.2016. However, the same was not accepted by the Assessing Officer while completing the assessment under Section 143(3) of the Act. The assessee further stated that he had produced all the facts of the transactions namely sale documents, materials, etc., before the Assessing Officer and therefore, it cannot be construed as furnishing of inaccurate particulars. The assessee also point....
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....sing Officer, the CIT(A) and the Tribunal on the merits of the matter, we proceed to discuss the other issues as well. 27. The CIT(A), while confirming the order of penalty, took note of the order passed by the Assessing Officer wherein the Assessing Officer rejected the explanation offered by the assessee, which ultimately resulted in an addition and the assessment was completed vide order dated 30.3.2016. The question would be as to whether rejection of the explanation and the consequential addition would automatically result in an order of penalty. 28. Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the Revenue seeks to substantiate her case by relying upon the decision of the Hon'ble Supreme Court in the case of Mak Data (P) Ltd. Vs. CIT, II [reported in (2013) 38 Taxmann.com 448] wherein it was held that voluntary disclosure does not release the assessee from mischief of penalty proceedings under Section 271(1)(c) of the Act and in terms of the said provision, the Assessing Officer has to satisfy as to whether the penalty proceedings have to be initiated or not during the course of assessment proceedings and he is not required to record his....
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....ssessee's stand that one of the properties was an agricultural land. Hence, we find that the burden cast upon the assessee to offer an explanation stands fulfilled. Consequently, the burden now shifts to the Revenue to establish the concealment of income or furnishing of inaccurate particulars of income or both. If the Revenue does not agree with the explanation offered by the assessee as in the instant case, then the onus is on the Revenue to prove that there was concealment of particulars of income or furnishing of inaccurate particulars of income. We find this aspect to be completely absent in the instant case. Therefore, we also find the imposition of penalty to be unjustified. 31. The assessee filed an appeal before the Tribunal, which confirmed the order passed by the CIT(A) that the assessee raised a new stand before the CIT(A). No such new stand has been raised. The stand taken by the assessee after receipt of the notice under Section 143(2) of the Act dated 02.9.2014 has been consistent i.e. before the Assessing Officer while submitting the reply to the penalty notice, in the appeal before the CIT(A) and before the Tribunal. This is evident on a reading of the....
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....round to enable the Assessing Officer to automatically levy penalty. In this regard, it is beneficial to refer to the decision of the Hon'ble Division Bench of this Court in the case of CIT Vs. Smt.Anitha Kumaran [reported in (2017) 79 Taxmann.com 304] wherein the decision of the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro Products (P) Limited [reported in (2010) 322 ITR 158] was followed wherein the Hon'ble Supreme Court examined the issue threadbare and discussed at length as to what was meant by the expression 'concealment of particulars of income and/or furnishing of inaccurate particulars of income' and after applying the decision in the case of Reliance Petro Products (P) Ltd., the Hon'ble Division Bench of this Court dismissed the appeal filed by the Revenue in the following terms : "13.3. The Supreme Court examined the issue threadbare and discussed at length as to what was meant by the expression concealment of particulars of income and/or furnishing inaccurate particulars of income and went on to observe as follows: ".....A glance at this provision would suggest that in order to be covered, there has to be concealm....
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.... must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. 10. It was tried to be suggested that Section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it am....
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....the correctness of the order, the Tribunal held that the levy of penalty under Section 271(1)(c) of the Act was wholly unwarranted as there had been no fraud or wilful neglect and that the assessee had only, with a view to cooperate with the Department, agreed to the addition. We observe that the above position will help the assessee, as there is not even a remote allegation that there was any fraudulent act by the assessee or the assessee was guilty of wilfully or negligently concealing the income and that his agreement to the addition of the amount, by itself, will not establish fraud or wilful neglect without something more. 39. For the above reasons, the assessee has to succeed on all grounds and consequently, it has to be held that the notice initiating the penalty proceedings is defective and invalid and the other findings rendered by the Assessing Officer, the CIT(A) and the Tribunal do not warrant imposition of penalty on the assessee. 40. In the result, the above tax case appeal is allowed, the impugned order passed by the Tribunal is set aside and the substantial questions of law are answered in favour of the assessee. No costs. Similar legal grounds ....