2022 (11) TMI 828

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....e proceed ex-parte against him therefore. 3. We have heard the Revenue and perused the orders of the authorities below. Case file perused. 4. We have given our thoughtful consideration to rival stands regarding correctness of the impugned Section 271(1)(c) penalty of Rs.1.35 lakhs imposed by the Assessing Officer in his order dated 16.06.2011 as upheld in the CIT(A) order as follows : "4.0. Appellant's submissions along with penalty order have been considered carefully. Assessment order as well as records have also been perused. As per his return, the appellant has claimed exemption u/s 54 for the entire amount of Rs.6,37,216/- by stating that another house property situated at Plot No. 43, Mouza Bhamti has been purchased on ....

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....laim. But, in the second type of inadmissible and false claim, there is an emphatic bar in the Act and the assessee is not entitled to claim such expenditure/ deduction/rebate or exemption. Absence of a valid basis for making any claim of deduction, resulting in low tax or no tax is like going against the letter and spirit of the law. 4.2. Further, the bonafide belief of an assessee in making a claim has limited role for deciding the issue of penalty be imposed u/s 271(1)(c). Facts of the case decide whether such a belief could be treated as bonafide or not. In other words, it can safely be held that if an assessee, disregarding all the relevant facts and circumstances, interprets a section that suits its interest then such interpr....

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....upported the impugned penalty by quoting the assessment as well as penalty discussion that the assessee could not prove during the former proceedings to have re-invested the capital gains for the purpose of claiming Section 54 deduction since plot in issue was found to be a vacant one only. We find no merit in the Revenue's vehement contentions supporting the impugned penalty. It is an admitted fact that the assessee's plot formed part of a group housing society's lay-out plan which ultimately was found as not constructed, which in turn, made the assessee to surrender the impugned deduction claim itself. Ld. DR could hardly rebut the clinching settled legal preposition that quantum and penalty are parallel proceedings wherein each and every....