TaxTMI 
TaxTMI 
2024 (2) TMI 792
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....ber 2012 providing the working of short-term capital gain. Appellant declared that the short-term capital gain would be Rs. 11,18,40,291/-. Appellant then filed revised computation of total income declaring the short-term capital gain for tax and paid the entire capital gains tax. It is appellant's case that during the assessment proceedings appellant received notice dated 22nd November 2012 under Section 142(1) of the Income Tax Act, 1961 (the Act). Respondent No. 1 called upon appellant to show cause as to why the gains on sale of guest house at Bangalore should not be considered to be short term capital gain as depreciation had been claimed in the earlier years. Appellant is candid that it is at that time it came to light that there was an error in treating the gain on sale of the property at Bangalore as long-term capital gain. 2. Notwithstanding appellant's explanation as to the error in computation and appellant's explanation that he had not furnished inaccurate particulars of capital gains and the fact that the taxes have been paid treating the gain on sale of the said property as short term capital gain, the Assessing Officer (A.O.) initiated penalty proceedings and impo....
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....sidered the judgment of the Hon'ble Apex Court in Reliance Petroproducts Pvt. Ltd. (supra). 6. It is against this order of the ITAT pronounced on 16th December 2015 this appeal has been preferred by assessee. The appeal was admitted on 29th January 2020 and the following three substantial questions of law were framed. QUESTIONS OF LAW (i) Whether the Tribunal is correct in law in reversing the order passed by the CIT(A) and thereby confirming the levy of concealment penalty? (ii) Whether the Tribunal is correct in law in upholding the action of respondent No. 1 in levying concealment penalty under Section 271(1)(c) of the Income Tax Act, 1961 on the addition made on account of mistake in treating the income from transfer of depreciable asset as long-term capital gain instead of short term capital gain as per provisions of Section 50 of the Act? (iii) Whether the Tribunal is correct in law confirming the levy of penalty under Section 271(1)(c) of the Act without appreciating that appellant has neither concealed any particulars of income nor furnished any inaccurate particulars of income? 7. In our view all these three questions can be answer....
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.... in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The Learned Counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In CIT v. Atul Mohan Bindal [2009] 9 SCC 589, where this court was considering the same provision, the court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This Court referred to another decision of this Court in Union of India v. Dharam....
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.... 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of Section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, willful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under Section 276-C of the Act. The basic reason why decision in Dilip N. Shroff v. Joint CIT was overruled by this court in Union of India v. Dharamendra Textile Processors was that according to this court the effect and difference between Section 271(1)(c) and Section 276-C of the Act was lost sight of in case of Dilip N. Shroff v. Joint CIT. However, it must be pointed out that in Union of India v. Dharmendra Textile Processors, no fault was found with the reasoning in the decision in Dilip N. Shroff v. Joint CIT, where the court explained the meaning of the terms "conceal" and inaccurate". It was only the ultimate inference in Di....