TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1571
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....red in confirming the penalty without appreciating the correct position of law. 2. In the facts and circumstances of the case and in law, Ld. CIT (A) erred in confirming the penalty of Rs. 2,18,910/- imposed by the AO u/s 271(1)(c). The penalty imposed by the AO and confirmed by CIT (A) is not justified and is illegal. 3. The appellant reserves the right to add, amend or alter any ground or ground/s of appeal. 4. The fact as culled out from the records is that the assessment was made under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as 'Act') on 16.12.2016 at Rs 10,62,670/-. The addition of Rs. 10,62,670/- was made on account of LTCG arising out of sale of land and which was not disclosed by the assessee in its return of income. Consequently, penalty proceeding under section 271(1)(c) of the Act was initiated. In this case, assessee had sold a piece of land for Rs 15,36,834/-, the sale proceeds of which and consequential capital gains were not mentioned in the return of income. During the course of scrutiny proceedings, on being asked about this, the AR of the assessee has simply stated that it was inadvertently missed while filing return of inc....
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....y the assessee and was not offered. The sale consideration was however credited in the books. As per Explanation to section 147, if any information can be deduced from records by due diligence, the assessee cannot claim that such information was furnished. before the AO. In the present case while the sale transaction was recorded in books but the books are assessee's records. And unless the case is selected. for scrutiny the AO will not have occasion to examine the books and if the appellant has not offered the amount of capital gain for transaction it has escaped the assessment. The assessee's plea that it has not furnished incorrect particulars is not correct and cannot be accepted. Regarding technical plea that the notice issued by the AO did not specify the exact defect for which the penalty was initiated, on perusal of the notice I find that in the notice dated 26/05/2017 out of the three sub clauses (a) (b) & (c) the sub clause (c) has been printed in bold which tells that the notice has been issued in respect of clause (c). It reads as "(c) for concealment the particulars of income or furnishing inaccurate particular of such income." In view of the facts of the cas....
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....ain thereon was not disclosed in the return and that during assessment proceedings, the appellant offered capital gain. In the assessment, the AO concluded that the appellant has concealed its income and has furnished inaccurate particulars. 1. At the outset, it is submitted that the appellant neither concealed its income nor furnished inaccurate particulars. The AO has levied penalty on capital gain on sale of land. The land was sold for a consideration of Rs, 15,36,834/- capital gain whereon came to Rs, 10,62,666/-. 2. It is pertinent to note that the transaction of sale of land has been recorded in the books of appellant and is also reflected in the audited balance sheet, a copy whereof is enclosed (page no. 1 to 22). In the schedule of fixed assets (schedule no. 8), the sale proceeds of land of Rs. 15,36,834/- is reflected/disclosed. Therefore, the sale transaction stood disclosed in the books/balance sheet. Please note that in para no. 3 of the assessment order also, it is mentioned that the sale price is reflected in the schedule of fixed assets. 3. The capital gain on the land was left to be offered in the computation due to family disputes/ problems in the family of t....
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.... having different and separate meanings. It is also settled that the two terms are not interchangeable and one cannot be replaced by the other. In other words, both the terms signify different default and therefore, it was incumbent upon the AO to have framed definite charge against the appellant, which the AO has utterly failed, both in the assessment and penalty order as well as in the show cause notice. Since both concealment and furnishing of inaccurate particulars have different meanings, it cannot be said that the appellant committed both the defaults. The term "conceal" means to hide an income and the term "furnishing inaccurate particulars" means not accurate or not exact or correct or not according to truth, as held in Dilip N. Shroff vs JCIT (2007) 291 ITR 519, 546 (SC). The AO had to fix the charge on appellant according to the established meaning of the two terms. Mentioning of both the defaults means that the AO was not sure of the default and it is a case of non application of mind. In view of this, mentioning both the defaults in the order and show cause notice shows that the appellant was not made aware of exact charge against it which is necessary so as to render....
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....s requested that the penalty imposed by AO may kindly be cancelled/quashed. 7. Per contra the Ld. DR supported the orders of the lower tax authority and the conviction of Ld. CIT(A) and also stated that it is mere technical error and the same may be seen accordingly and has heavily relied upon the findings of the lower authorities and requested to confirm the penalty levied. 8. The ld. AR appearing on the behalf of the assessee also relied upon the decision of this co -ordinate bench given in the case of Shri Swapnil Kumar Jain in ITA No. 106/BIL/2017 dated 01.04.2022 where in the bench has dealt the similar legal issue and the relevant finding is extract for the sake of brevity: 6. After hearing to the rival contentions of both the parties; perused material placed on records and duly considered the facts of the case in the light of settled legal position and the case laws relied upon by the appellant assessee as well the respondent revenue. 7. It is apt to quote relevant text of the provision to arrive at the applicability in the instant case before us; 271. Failure to furnish returns, comply with notices, concealment of income, etc. (1) If the [Assessing] Officer or the....
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.... Act, 1961 were initiated. Therefore, you are hereby requested to appear before me at my office on 29/01/2015 at 11.30 A.M and show cause why an order imposing a penalty on you should not be made u/s 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative, you may show cause in writing on or before the said date which will be considered before any such order is made u/s 271(1)(c). (Emphasis Supplied) 7.3 The infirmity in the notice was sought to demonstrate a reflection of nonapplication of mind by the Ld. AO ex facie and in support thereof a reference can be made to the specific discussion laid by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra); "It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income, or he had furnished inaccurate particulars. Ev....
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....ion 271(1)(c), of the IT Act without indicating which particular limb of Section 271(1)(c) was invoked for initiating the penalty proceedings" 7.7 To demonstrate the voice of non-application of mind by the Ld. AO, we shall also refer to the one of the pivotal feature of the present litigation that, in the assessment order the Ld. AO at the epilogue of para 5 on page 3 records that, "with initiating penalty proceedings u/s 271(1)(c) of the Act", however, in the notice u/s 274 r.w.s. 271(1)(c) of the Act was issued without any limbs of section 271(1)(c) of the Act which evidently brings out the reticence on the part of Assessing Officer, resultantly there is complete absentia of clear and crystallised charge being conveyed u/s 271(1)(c), which to be defended by the appellant assessee. In this regard we also refer a similar judgment of the Hon'ble Karnataka High Court in the case of "S Chandrashekar Vs ACIT", reported at 396 ITR 538 (Karn) wherein a notice u/s 274 r.w.s. 271(1)(c) of the Act was issued in printed form without specifying the grounds of initiation of penalty proceedings, was held to be invalid and untenable in law. 8. In omnibus, as noted by the Hon'ble Su....