TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 833
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....e assessee had filed its original return of income for A.Y.2014-15 on 26.07.2014, wherein after raising a claim for exemption u/s 10(38) of the Act of the Long Term Capital Gain (LTCG) of Rs. 2,78,42,063/- on sale of shares of "CCL International Ltd." it had disclosed its net taxable income at Rs. 9,05,930/-. 3. On 20/21.04.2020, the assessee vide its letter dated 23.03.2020 addressed to the Pr. CIT-2, Raipur/Jt. CIT-Range-4, Raipur/AO, Ward-4(3), Raipur, had intimated about the withdrawal of its claim for exemption u/s. 10(38) of LTCG of Rs. 2,78,42,063/- on sales of shares of CCL International Ltd. (supra) that was raised in its original return of income. It was further intimated by the assessee that it had paid the taxes a/w. surcharge and education cess on the aforesaid amount of income. The assessee had explained that as the claim of exemption on sale of shares of the aforesaid scrip, viz. M/s. CCL International Ltd. (supra) was rejected by the A.O. while framing assessment u/s. 143(3) in the case of its co-parcener, viz. Shri Manish Kumar Sharma for A.Y.2015-16, therefore, to buy peace of mind and to avoid protracted litigation it seeks to withdraw the claim for exemption on....
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....ave been involved in providing accommodation entries through purchase/sale of shares. Accordingly, the A.O. based on the aforesaid facts concluded that the assessee HUF had routed its own unaccounted money in the guise of exempt capital gains on the sale of shares of "CCL International Ltd.". 7. The assessee on being queried about the aforesaid issue, submitted that it had for avoiding protracted litigation offered LTCG on the sale transaction of the aforesaid shares of "CCL International Ltd." as its income from "other sources" in its return of income filed u/s. 148 of the Act. However, the explanation of the assessee did not find favor with the A.O for the following reasons: "i) The explanation of the assessee is general in nature stating the transaction are through Stock Exchange and payments are made through cheque, the transactions should be treated as genuine. The background of the scheme given in earlier paras shows that both the requirements are inbult in the bogus LTCG scheme and does not ipso facto prove genuineness of transaction. The SEBI after thorough investigation has stated that such transactions are rigged and carried out to convert Black Money into white money.....
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.... ground or principle of preponderance of human probabilities, which could thus form a valid ground or parameter for determining the genuineness stands since settled by the Apex court in Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC) wherein the apex court, in declaring the transaction as non-genuine discarded a host of documentary evidences filed or relied upon by the assessee-appellant. The documentary evidences are not by themselves conclusive, and the truth of the matter or the documents could be determined on the basis of or on the anvil of surrounding facts and circumstance of the case is well settled and reliance is placed on the decision in the case of Durga Prasad More 82 ITR 540(SC)." Accordingly, the A.O based on his aforesaid observations concluded that the transaction of purchase/sale of shares carried out by the assessee was not genuine and, thus, the exemption of LTCG of Rs. 2,78,42,063/- claimed in the original return of income was not to be accepted. As such, the A.O. recharacterized the LTCG income offered by the assessee as its "income from other sources" in its return of income filed u/s 148 of the Act as an unexplained cash credit u/s. 68 of the Act and brought t....
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....ons to introduce unaccounted income into the books of the assessee and investigations in the said stock have proven that the Company had no financial standing for it to generate such huge share price. d) The details submitted by the assessee reveal that the assessee has not been dealing in shares on a regular basis. e) The basic trading pattern of the shares of Mis. CCL International Limited were analyzed and it was seen that there was a common pattern in the trading of such scrips and the pattern is that they represent a bell share in their trading. The Balance Sheet of the Company showed that it had no credentials to support the share movement pattern. f) The assessee through an off market transaction purchased 60000 shares of AAP Infrastructure which on merger got converted into 1500000 shares which gained the assessee a price of Rs. 2,81,80,383/-. Such a huge rise is shares are not in line with the movement of the share market during this period and also looking at the credentials of the Company. g) The documentary evidences are not by themselves conclusive but the truth of the matter could be determined on the basis of or on the anvil of surrounding facts and circumsta....
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....ary offer. The appellant could not controvert these findings recorded by the AO in the assessment order. 7. Whether it was a voluntary offer? 7.1. In this case, the transaction was pertaining to FY 2013-14 relevant to AY 2014-15. The appellant filed original return of income on 26.07.2014 by admitting total income of only Rs. 9,05,930/-. In the return he claimed exemption of Rs. 2,78,42,063/-. This was the return filed u/s 139(1) of the IT Act voluntarily by him within due date. If he was of the opinion that the LTCG and the claim of exemption was not correct, he could have filed a revised return voluntarily u/s 139(5) of the IT Act. These two provisions only ensure voluntary compliance. 7.2. In this case the appellant never admitted any income for Rs. 2,78,42,063/- voluntarily for taxation, Rather he deliberately made incorrect claim in his return of income to the extent of Rs. 2,78,42,063/- and silently enjoyed the benefit of wrong claim for a period of 7 years. 7.3. The department carried out extensive investigation all over the country and busted out the modus operandi of penny stock companies floated by several entry providers who indulged into such unfair and unlawful....
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....ove, the submission of the appellant that he voluntarily offered Rs. 2,78,42,063/- for taxation and paid income tax of Rs. 94,01,034/- was devoid of any merit. This is what the AO also dealt in the assessment order and recorded a fact that it was not at all a voluntary offer. 8. AO did not initiate penalty in other cases. The appellant made another strange claim that AO did not initiate penalty in similar facts in other cases. Hence, the penalty levied in his case is not correct. Such contention is also devoid of any merit. Several individuals may jump the traffic signal and few are caught and fine has been levied. They cannot claim that in so many other cases, the traffic police did not levy such fine and he cannot levy fine only in his hands. The appellant's claim is similar to this situation. Penalty proceedings placed in IT Act are to be initiated by the AO as per the facts and circumstances of each case and being levied as per those provisions. If the AO did not initiate penalty in some cases, that cannot stop initiation of penalty by the AO in the case of appellant. For this reason, penalty levied in his case cannot be allowed. 9. Claim of exemption was genuine and ....
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....tuation. This cannot be a valid ground for dropping of penalty for such large-scale evasion of income of Rs. 2,78,42,063/-. It is an organized modus operandi of evasion through sophisticated techniques. Such large-scale tax extensive and exhaustive investigation. That led to detection of bogus claim of LTCG. detected through an Hence, the AO rightly initiated penalty proceedings and levied penalty. Dropping of penalty in some other cases cannot prevent the AO from levying penalty in his case. 13. Findings of AO in the case of appellant: 13.1 The AO referred some of the judicial decision in support of his action in the penalty order. It is as under: i) Hon'ble M.P.High Court in its judgment in the case of Steel Infots Ltd. Vs. CIT [296 ITR 228] held that "In case of concealment of true income chargeable to tax by making bogus claim, levy of penalty u/s 271(1)(c) read with Explanation 1 is justified. ii) Hon'ble Delhi High Court in its judgment in the case of CIT Vs Escorts Finance Ltd [183 Taxman 453 (Delhi)/[2010] 328 ITR 44 (Delhi)/[2009] 226 CTR 105] held that "If claim made in return of income appears to be ex facie bogus, it would be treated as a case of conceal....
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....id sum to tax, since said amount was not disclosed in original return, penalty levied under section 271(1)(c) was justified." 13.2 These decisions are few illustrations considered by the AO for levy of penalty in the case of the appellant. The appellant in his detailed written submissions, stressed that he voluntarily admitted this sum of 2,78,42,063/- for taxation and hence, penalty is not leviable. However, this case cannot fit into the definition of voluntary compliance. 13.3 Hon'ble Supreme Court in the case of Prasanna Dugar Vs. CIT (2016) 373 ITR 681 held that even if the assessee voluntarily disclosed undisclosed income and paid tax, subsequent to search operations, penalty levied u/s 271(1)(c) of the IT Act was justified. 13.4 Further, Hon'ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT-II (2013) 358 ITR 593 held that voluntary disclosure does not release the assessee from the provisions of Sec.271(1)(c) of the IT Act. The facts in that case are as under: "For relevant assessment year, assessee filed its return declaring certain income. During the course of the assessment proceedings, it was noticed by the Assessing Officer (AO) that certain docum....
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....iew to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the Explanation 1 to section 271(1)(c). It is trite law that the voluntary disclosure does not release the assessee from the mischief of penal proceedings under section 271(1)(c). The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he has to be absolved from penalty. [Para 7] The surrender of income on this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the Assessing Officer in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequen....
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....im for exemption u/s. 10(38) of the Act (as raised in the original return of income) was withdrawn and the corresponding income was offered for tax could safely be gathered from the fact that its case was reopened only pursuant to the letter dated 23.02.2020 that was filed by the assessee with the Pr. CIT-2, Raipur/Jt. CIT, Range-4, Raipur and ITO-4(3), Raipur. The Ld. AR submitted that the assessee had after taking cognizance of the assessment order passed in the case of its co-parcener, viz. Shri Manish Kumar Sharma, to avoid protracted litigation, had based on a bona fide reason withdrawn its legitimate claim of exemption of LTCG on the sale of shares of "CCL International Ltd.". Also, the Ld. AR submitted that the assessee before filing of the aforesaid letter dated 23.03.2020 had voluntarily paid the entire amount of tax/surcharge/education cess of Rs. 93,87,844/- due on its aforesaid additional income. It was, thus, the claim of the Ld. AR that the case of the assessee was reopened solely based on the information that was provided by it. The Ld. AR submitted that except for the aforesaid letter of the assessee, there was no material with the A.O. which would even slightly sug....
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.... "AAR Infrastructure Ltd." had thereafter merged with "CCL International Ltd." pursuant to the order of amalgamation passed by the Hon'ble High Court of Delhi dated 08.10.2011, Page 19-34 of APB. It was submitted by him that the assessee was thereafter under the aforesaid merger allotted 150000 shares of "CCL International Ltd.", Page 35 of APB, and the aforesaid shares of CCL International Ltd. were, thereafter, received by the assessee in its Demat account with Stock Holding Corporation of India Ltd., (SHICL), Page 36 of APB. The Ld. AR further submitted that the aforesaid shares of "CCL International Ltd" were held by the assessee in its Demat account for more than 2 years and thereafter, were sold through a registered broker through an online transaction after paying Security Transaction Tax (STT). Our attention was drawn by the Ld. AR to the sale contract note, Pages 37 to 66 of APB. Carrying his contention further, the Ld. AR submitted that the sale proceeds of the shares of "CCL International Ltd." were received by the assessee through the banking channel. Our attention was drawn by the Ld. AR to the copy of the bank account of the assessee with State Bank of India, Bran....
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.... Act. The Ld. DR in support of his aforesaid contention relied on the following judicial pronouncements: (i) Mak Data (P) Ltd. Vs. CIT, (2013) 38 taxmann.com 448 (SC) (ii) CIT Vs. Prasanna Dugar, (2015) 371 ITR 19 (Cal.) (iii) Pr. CIT Vs. Dr. Vandana Gupta, (2018) 92 taxmann.com 229 (Del) (iv) K.K Motwani HUF Vs. ACIT (2016)-TIOL-2910-HC-Mum-IT 17. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 18. Admittedly, it is a matter of fact borne from the record that the assessee had in its original return of income for the subject year that was filed on 26.07.2014, raised a claim for exemption of LTCG of Rs. 2.78 crore (approx.) on the sale of shares of "CCL International Ltd." u/s. 10(38) of the Act. The return of income was processed as such u/s. 143(1) of the Act. Also, it is a matter of fact borne from the record that the case of the assessee was not selected for scrutiny assessment u/s. 143(2) of the Act. Subsequently, the assessee vide it....
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....icer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." (emphasis supplied by us) 21. As can be gathered from a careful perusal of the aforesaid "Explanation 1", the same would get triggered only where the assessee had in respect of any facts material to the computation of the total income, viz. (i). failed to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner to be false; or (ii) offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same a....
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....y the assessee in its demat account on 27.04.2011, Page 18 of APB. * that "AAR Infrastructure Ltd." had thereafter, merged with "CCL International Ltd." pursuant to the order of the Hon'ble High Court of Delhi vide its order passed in Company Application (M) No.135 of 2011 dated 08.10.2011, Page 19 to 34 of APB. * that the assessee was thereafter pursuant to the aforesaid merger allotted 150000 shares of "CCL International Ltd.", Page 35 of APB. * that the shares of "CCL International Ltd." were received in its demat account with Stock Holding Corporation of India Ltd. Page 36 of APB. * that shares of "CCL International Ltd." which were held in a demat account for more than 2 years were sold through a registered broker vide an online transaction after paying Security Transaction Tax(STT) and the assessee in support thereof furnished contract note cum tax invoice of SHCIL, Page 37- 66 of APB. * that the sale proceeds of the shares of "CCL International Ltd." were deposited in the assessee's bank account No.00000010822719448 with State Bank of India, Branch: Raipur, Page 66-71 of APB. 24. We find substance in the claim of the Ld. AR that the A.O while drawing adver....
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....t proceedings to show the exact date of entry in its demat account; (viii) that the application of equity shares was un-dated and no application number was mentioned on the application form and (ix) that the assessee had not filed any appeal against the assessment order which proved that there was conscious concealment of income on its part. 27. At this stage, it would be pertinent to observe that the lower authorities had failed to dislodge the authenticity of the documents, based on which, the assessee had claimed of having carried out genuine transactions of purchase/sales of shares of "M/s. CCL International Ltd.", viz. (i) purchase of 60000 shares of AAR Infrastructure Ltd. though banking channel on 06.07.2011; (ii) allotment of shares of AAR infrastructure Ltd. vide allotment letter dated 17.02.2011 which, thereafter, were received in its demat account on 27.04.2011; (iii) merger of "M/s. AAR infrastructure Ltd." with "M/s. CCL Infrastructure Ltd." pursuant to the order of the Hon'ble High Court of Delhi in Company Application (M) 135 of 2011 dated 08.10.2011; (iv) allotment of 150000 shares of "CCL International Ltd." pursuant to the aforesaid merger; (v) receipt of sha....
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....LTCG of Rs. 2.78 crore (supra) on the sale of shares of "M/s. CCL International Ltd." as exempt u/s. 10(38) of the Act, which, thereafter, was withdrawn by him in its return of income filed in response to the notice u/s. 148 of the Act. However, we cannot remain oblivion of the circumstances, under which, the assessee had withdrawn its claim for exemption u/s. 10(38) of the Act. As observed by us hereinabove, the assessee in its letter dated 23.03.2020 filed with the department had clarified that it had raised a legitimate claim for exemption of LTCG on the sale of shares of "CCL International Ltd." u/s. 10(38) of the Act but that was being withdrawn to buy peace of mind and avoid protracted litigation because the department while framing assessment u/s. 143(3) of the Act in the case of one of its coparceners, viz. Shri Manish Kumar Sharma, for the immediately succeeding year, i.e. A.Y.2015-16 had declined his claim of exemption on sale of the said scrip and had held the same as his unexplained cash credit u/s. 68 of the Act. 30. We shall now deal with the observations of the authorities below based on which they have drawn adverse inferences as regards the claim of exemption of L....
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....s alleged that the entire transaction was bogus but on the other hand the AO himself has allowed the cost of acquisition against the sale of shares, meaning thereby, the purchase of the shares has been admitted as genuine. The transactions of purchase and sales go hand in hand. In simple words, sales is not possible without having the purchases. Thus, once purchases has been admitted as genuine, then corresponding sales cannot be doubted until and unless some adverse materials are brought on record. As such, we note that the AO in the present case has taken contradictory stand. On one hand, the AO is treating the entire transaction as sham transaction and on the other hand he's allowing the benefit of the cost of acquisition for the shares while determining the bogus long term capital gain.... 11.2 It was alleged by the AO that the price of the share of M/s Shree Nath Commercial & Finance Ltd., increased in a short period of time which is not in commensurate to the financial performance of the company. The rise in the price of the scripts of a company, having no financial base / business activity / profatibility certainly gives rise to the doubt about such increase in the pri....
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....w is supported by the judgment of the Hon'ble High Court of Bombay in the case of Pr. CIT-3, Mumbai Vs. Ziauddin A Siddique, ITA No.2012 of 2017 dated 04.03.2022. The question of law, for which, the indulgence of the Hon'ble High Court was sought is culled out as under: "Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in deleting the addition of Rs. 1,03,33,925/- made by AO u/s 68 of the I.T. Act, 1961, ignoring the fact that the shares were bought/acquired from off market sources and thereafter the same was demated and registered in stock exchange and increase in share price of Ramkrishna Fincap Ltd. is not supported by the financials and, therefore, the amount of LTCG of Rs. 1,03,33,925/- claimed by the assessee is nothing but unaccounted income which was rightly added u/s 68 of the I. T. Act, 1961?" The Hon'ble High Court after deliberating at length on the aforesaid issue had held as under: "2. We have considered the impugned order with the assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shar....
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....foresaid company within a span of two years, which is not supported by the financials. On an analysis of the data obtained from the websites, the AO observes that the quantum leap in the share price is not justified; the trade pattern of the aforesaid company did not move along with the sensex; and the financials of the company did not show any reason for the extraordinary performance of its stock. We have nothing adverse to comment on the above analysis, but are concerned with the axiomatic conclusion drawn by the AO that the Respondent had entered into an agreement to convert unaccounted money by claiming fictitious LTCG, which is exempt under Section 10(38), in a preplanned manner to evade taxes. The AO extensively relied upon the search and survey operations conducted by the Investigation Wing of the Income Tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of a....
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.... Vs. Smt. Krishna Devi (supra) had thereafter been followed by the Hon'ble High Court in the case of Pr. CIT-12 Vs. Karuna Garg, ITA No.477/2022 dated 23.11.2022. 34. Apart from that, as the Demat account/contract note of the assessee shows the details of share transactions and the A.O had not disproved the said transactions, therefore, having failed to discharge the onus that was cast upon it to disprove the authenticity of the share transactions, he could not have saddled the assessee with penalty u/s 271(1)(c) of the Act. Our aforesaid view is supported by the judgment of the Hon'ble High Court of Bombay in the case of CIT-13 Vs. Shyam R. Pawar, (2015) 229 Taxman 256 (Bom.). Also, we find that the Hon'ble High Court of Gujarat in the case of Pr. CIT Vs. Shri Ambalal Chimanlal Patel (2024) 162 taxmann.com 892 (Guj.) had held that though the assessee before them had purchased shares of a company when trading of the said company was suspended and had sold the same and claimed exemption u/s. 10(38) of the Act, but in the absence of any material brought on record to suggest that the purchase and sale of said shares were bogus, the A.O. was not justified in drawing advers....
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....foresaid view is fortified by the order of ITAT, Raipur in the case of ACIT-1(2), Raipur Vs. Agrawal Round Rolling Mills Ltd., ITA No.133 (BLPR) of 2009 dated 14.07.2010, wherein the Tribunal had observed that as there was neither any detection nor any information in the possession of the revenue except for the amount surrendered by the assessee, therefore, the lower authorities had rightly concluded that the assessee could not have been saddled with penalty for concealment of income on its part. The aforesaid order of the Tribunal had thereafter been approved by the Hon'ble High Court of Chhattisgarh in the case of CIT Vs. Agrawal Round Rolling Mills Ltd. (2013) 85 CCH 510 (Chhattisgarh). Also, the SLP filed by the revenue against the order of the Hon'ble High Court of Chhattisgarh had been dismissed by the Hon'ble Supreme Court in the case of CIT Vs. Agrawal Round Rolling Mills Ltd. (2014) 88 CCH 36 (SC). 37. We, thus, in terms of our aforesaid observations are unable to persuade ourselves to subscribe to the view taken by the lower authorities who had imposed/sustained penalty levied u/s. 271(1)(c) of the Act on the assessee for the following reasons: (I) that the....
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....the Act could not have been saddled upon her is supported by the order of the ITAT, Raipur in the case of DCIT-1(1), Raipur (C.G.) Vs. Smt. Renu Behl, ITA No.289/RPR/2023 dated 11.12.2023, wherein on identical facts, the Tribunal had held as under: "8. We have thoughtfully considered the issue, i.e., the sustainability of the view taken by the CIT(Appeals), who had vacated the penalty imposed by the A.O u/s. 271(1)(c) of the Act. As observed by the CIT(Appeals), and rightly so, as the assessee had offered LTCG on sale of 2500 shares of M/s. Blueprint Securities Ltd. as a part of her total income in the return of income filed in response to the notice u/s. 148 of the Act, therefore, the A.O., without establishing that the assessee had concealed her income, could not have saddled her with penalty u/s. 271(1)(c) of the Act. We, thus, in terms of our aforesaid observation, concur with the view taken by the CIT(Appeals), who had rightly vacated the penalty of Rs. 2,26,861/- imposed by the A.O u/s. 271(1)(c) of the Act and uphold the same." 39. We may herein observe that as the assessee based on its explanation that was filed before the Pr. CIT/Jt. CIT/A.O vide its letter dated 23.03.....
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....he Assessing Officer initiated the penalty proceedings against the assessee under section 271(1)(c) of the Act. The Assessing Officer, after considering the submissions of the assessee, imposed a penalty of Rs. 3,95,930/- while holding that the assessee had filed the return on April 30, 2003, i.e. after the issuance of notice under section 148 of the Act. It was alleged that as the return was filed after the detection of the concealment of income by the Department and since the assessee had intentionally played fraud to avoid a higher rate tax of 30 percent as against 20 percent, applicable on the declaration of capital gains, therefore, the assessee was guilty in terms of section 271(1)(c) of the Act. 42. On appeal, the CIT(Appeals), Karnal, vide his order dated December 29, 2004, deleted the penalty of Rs. 3,95,930/- by accepting the plea of the assessee that the additional income equivalent to the entire amount of sale proceeds of shares was declared only to buy peace of mind and to avoid litigation with the Revenue and no material was found by the Assessing Officer during the assessment to show that the stand of the assessee, reflected by the transaction resulting in long-term....
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....Tribunal observed that as additional income so offered by the assessee was done in good faith, therefore, penalty u/s. 271(1)(c) of the Act could not have been levied. The Tribunal had concluded as hereinabove after relying on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Suresh Chandra Mittal (2001) 251 ITR 9(SC). 44. On further appeal, the Hon'ble High Court approved the view taken by the Tribunal. The department had assailed the order of the Tribunal on three counts, viz. (i) that as the assessee had included the entire amount of sale proceeds in its return of income filed in response to the notice u/s. 148 of the Act, thus, it was an admission on his part of having concealed the said income by deliberately furnishing inaccurate particulars in his original return; (ii) that the assessee had accepted the order of assessment passed u/s. 143(3) of the Act and not carried the same any further in appeal; and (iii) that the explanation of the assessee that he had surrendered the amount of sale proceeds of shares to buy peace of mind and avoid hazards of litigation and also to save himself from any penal action, cannot be said to be bonafide. The Hon'ble....
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....suance of the notice under section 148 of the Act. By filing the revised return, the assessee owned the amount in question as his income and he had earlier filed the original return, concealing the said income by deliberately furnishing inaccurate particulars of that income in the original return. This amounts to admission of the assessee itself that it has earlier furnished inaccurate particulars of income and on its detection by the Department, the assessee offered the concealed income for tax after issuance of the notice under section 148 of the Act. Learned counsel submitted that this fact itself proves that the assessee had deliberately furnished inaccurate particulars of his income with the intention to avoid higher rate of tax. Learned counsel further submitted that the assessee had accepted the order of assessment passed by the Assessing Officer under section 143(3) of the Act and no further appeal has been filed by it against the said order. Learned counsel submitted that the explanation submitted by the assessee that he surrendered the entire amount of sale proceeds of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal a....
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....stablish that the assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by the assessing authority. In the present case, in pursuance of the notice under section 148 of the Act, the revised return of income was filed in which the entire income was surrendered with an explanation. The revised assessment was regularized by the Revenue. The assessing authority had failed to take any objection that the declaration of income made by the assessee in his revised return and in his explanation were not bona fide. Therefore, in view of the aforesaid finding, the Tribunal was justified in upholding the order of the Commissioner of Income-tax (Appeals), whereby the penalty imposed under section 271(1)(c) of the Act by the Assessing Officer was ordered to be deleted. 8. In view of the aforesaid discussion, we are of the opinion that no substantial question of law is arising in this appeal. Hence, finding no merits in the appeals, the same are hereby dismissed." 45. Also, we find that similar view that wh....
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.... the case of CIT Vs. Suresh Chandra Mittal (2001) 251 ITR 9 (SC). Also, a similar view had been taken by the ITAT, Surat in the case of Ashvin Narayan Bajoria (HUF) Vs. ITO, ITA No.369/SRT/2022. The Tribunal had held that a simpliciter offer of additional income by the assessee in its return of income filed in response to notice u/s. 148 of the Act, i.e. without dislodging the bonafide of the assessee's explanation would not justify imposition of penalty u/s. 271(1)(c) of the Act. 46. We are of the view that in the present case before us, as the A.O had failed to dislodge the bonafide of the assessee's explanation based on which it had withdrawn its claim of exemption u/s 10(38) of LTCG of Rs. 2.78 crore (supra) on sale of shares of "CCL International Ltd.", and had offered the corresponding amount as his income from "Other sources" in its return of income filed in response to notice u/s. 148 of the Act, therefore, drawing support from the aforesaid judicial pronouncements we are of the view that there was no justification on his part to have imposed penalty u/s. 271(1)(c) of the Act. 47. At this stage, we may herein observe that had it been a case where the assessee woul....
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....ticularly, blank transfer deeds duly signed, had as per its reply filed on 22.11.2006 came up with a disclosure of Rs. 40.74 lakhs with a view to avoid litigation, buy peace and to make an amicable settlement of the dispute. It was in the backdrop of the aforesaid facts that the Hon'ble Supreme Court deliberating on the facts involved in the said case observed, viz. (i). the Explanation to section 271(1) raises a presumption of concealment when a difference is noted by the Assessing Officer between reported and assessed income; (ii). that as the surrender of income was made by the assessee in view of the detection made by the A.O. in the search conducted on the sister concern, therefore, the same could not be held as voluntary; (iii). that the assessee had come forth with disclosure only after being confronted and called upon to put forth its explanation in respect of documents, viz. share application forms, bank statements, memorandum of association of companies, affidavits, copies of income-tax returns, assessment orders, and blank share transfer deeds duly signed, as were impounded in the course of survey proceedings conducted under Sec. 133A on 16.12.2003 in the case of its....