TaxTMI 
TaxTMI 
2022 (6) TMI 689
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....s of the case the ld. CIT(A) is wrong, unjust and has erred in law in confirming penalty of Rs. 204372 imposed by the Assessing Officer under section 271(1)(c) of the I. T. Act, 1961. 3. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them." 3. Brief facts of the case are that the assessee is an individual deriving income from house property, capital gain and other sources. The assessee for the year under consideration filed return of income declaring total income of Rs. 2,64,980/- and in response to notice u/s 153A filed return of income declaring same income of Rs. 2,64,980/-. In the return of income assessee declared long term capital gain of Rs. 1,55,740/-from sale of a plot for which purchase cost of plot was claimed at Rs. 3,00,000/- by mistake in place of same was Rs. 30,000/- only and in assessment proceedings the assessee accepted it being an inadvertent mistake. The A.O. thereafter worked out long term capital gain at Rs. 11,47,834/-adopting purchase cost at Rs. 30,000/- and resultantly made an addition of Rs. 9,92,094/- in assessment in declared LTCG and simultaneously initiated penalty p....
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....articulars of income. b) Notice u/s 274 Furthur in the penalty notice u/s 274 read with section 271 of Income Tax Act, 1961 dated 16-02-2015 (copy enclosed) A.O. issued printed notice by putting against * have concealed the particulars of income or furnished inaccurate particulars of such income penalty u/s 271 (1) (c) initiate for undisclosed income of the specified year. The notice dated 07-07-2015 was only reminder of penalty proceedings and final notice dated 24/04-01-2019 notice was also simply reminder of penalty proceedings u/s 271 (1) (c) initiated fixing date of hearing 11-02-2019. It is submitted that any notice issued under section 274, read with Section 271 (1) (c) of the Income Tax Act, 1961, must specify limb of default under Section 271 (1) (c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. In the absence of which no penalty should be levied on the assessee as determination of such limb is sine qua non for imposition of penalty under section 271 (1) (c). 1.2 It is pertinent to note that in the said asse....
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....ation by this Court. The appeal.is accordingly dismissed." The department has filed SLP in Hon'ble Supreme Court which has been dismissed. Therefore, Honble Supreme Court has approved the findings made by Hon'ble Karnataka High Court in the case of CIT Vs. SSA's Emerald Meadows And CIT Vs Manjunatha Cotton & Ginnign Factory & others [2013] 359 ITR 565. Honble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565 (Karnataka) after referring to the decision of Honble Supreme Court in the case of T. Ashok Pai (Supra) held as under: - .......... Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKE....
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....r dated 09/11/16 iii) Mrs Mradula Agarwal vs I.T.O. - ITA No. 176/JP/2016 1.5 In the resent judgment of the Hon'ble jurisdictional High Court in the case of Shevata Construction Co. Pvt. Ltd. ITA No. 534/2008, wherein the Hon'ble High Court at para 9 of its order held as under:- "......Taking into consideration the decision of the Andhra Pradesh High Court which virtually considered the subsequent law and the law which was prevailing on the date the decision was rendered on 27.08.2012. In view of the observation made in the said judgment, we are of the opinion that the contention raised by the appellant is required to be accepted and in the finding of Assessing Officer in the assessment order it is held that the A.O. has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order ...." (Emphasis Supplied). The Hon'ble ITAT, Jaipur Bench, Jaipur has also in case of Lal Chand Mittal Vs. DCIT (ITA No. 772/JP/2016 order dated 29-12-2011 and various other cases de....
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.... income and levied penalty for concealment of income which too is not correct in law. Therefore, the penalty order of ld. AO deserves to be set aside and penalty levied by AO deserves to be cancelled. (2) The ground No. (2) of appeal is that without prejudice to the ground No. (1) above on the facts and in the circumstances of the case penalty of Rs. 2,04,372/- imposed by the assessing officer under section 271 (1) (c) of the I. T. Act, 1961 is wrong and bad in law. The fact of the case is that assessee in the year under assessment sold a plot no. 8 at Gem Vihar, Sanganer, Jaipur. The said plot was purchased by assessee in the financial year 198990 for Rs. 30,000/- However at the time of filing of return of income the said purchase cost of land has wrongly been typed at Rs. 3,00,000/- instead of correct figure of Rs. 30,000/-. Because of this the cost of acquisition has been claimed excess by Rs. 2,70,000/-. During the assessment proceedings when assessee came to know about said mistake she voluntarily offered the said correction in the cost of acquisition claimed in return of income filed. Thus from the above said facts and circumstances of the case, it is clear ....
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....nt 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 of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In the view of above there was neither concealment nor the assessee furnished the inaccurate particulars of income. The Hon'ble Supreme Court in case of Dilip N. Shroff Vs. JCIT (2007) 291 ITR 519 held that before penalty can be levied u/s 271 (1) (c) the entirety of circumstances must reasonably point to conclusion that assessee had consciously concealed his particulars of income or had furnished inaccurate particulars thereof Both the expressions "concealment of income" and `furnishing of inaccurate particulars" indicate some deliberation on the part of the assessee, though the word "deliberately" and the word "willfully" are no longer part of the statute. Mere omission or negligence would not constitute a deliberate act of suppression veri or suggession falsi. In view of the above it is neither concealment nor furnishing of inaccurate pa....
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....e any intention to evade Tax. 11. Before us the Ld AR for the assesee placed reliance on various decisions of Supreme Court, High Courts and co ordinate benches of ITAT in his Written Submissions that mere omission from the return of an item of receipt does neither amount to be 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 of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. 12. The Ld AR for the assesee at the time of arguments has relied on Judgments of Hon'ble High Court of Madras in TC(A) Nos.876 & 877 of 2008 Sundaram Finance Ltd., Vs Assistant Commissioner Of Income Tax, (2018) 93 taxman.com 250 (Madras) and Earthmoving Equipment Service Corporation Vs Deputy Commissioner of Income Tax, (2017) 84 taxman.com 51(Mumbai - Trib.). In both decisions the observations made that the assesee made a claim which was bona fide and the same was coupled with documentary evidences and not solely on the basis of defect in notice u/s 274.The noti....
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....ion 145 (3) of the Act by the A.O. was on account of and lack of verifiability of some of the purchases. In this way, the additions made in the present case were purely on estimation. It is a settled law that additions based on estimation where higher trading profit as declared against the gross profit has been declared therein, in that cases, no penalty is leviable as it cannot be held that in those cases, the assessee has concealed income or of furnishing inaccurate particulars of income within the provisions of Section 271(1) (c) of the Act. This proposition has been upheld in case of CIT Vs. Dhillon Rice Mills (2002) 256 ITR 209 (ALL) and in case of Hari Gopal Singh Vs. CIT (2002) 258 ITR 85. In both these decisions, it has been held by the Hon'ble Courts that the provisions of Section 271(1)(c) are not attracted to cases where the income of an assessee is assessed on estimate basis and additions are made therein. As per the facts of the present case, the additions were made on estimation basis whereas the gross profit declared by the assessee was much better than the previous years. Even in the case of CIT Vs. Aero Traders P. Ltd. (2010) 322 ITR 316 it was held by the Hon'ble ....