2012 (6) TMI 718 - AT - Income Tax

Penalty u/s 271(1)(c) - sale of land - addition made in the revisionary proceedings on the basis of deeming provisions of section 50C - Held that - In present case, AO has not disputed the consideration received by the assessee. The addition has been made on the basis of deeming provisions of section 50C. The assessee has furnished all the facts of sale, documents/ material before the AO, genuineness of which has not been doubted by AO. Only because the assessee agreed to the additions because of the deeming provisions it cannot be construed to be filing of inaccurate particulars on the part of the assessee. Hence, penalty cannot be levied on the basis of deeming provision - Decided in favor of assessee.

Summary

Issues:
Assessment of capital gains under section 50C | Penalty proceedings under section 271(1)(c) for alleged concealment of income

Assessment of Capital Gains under Section 50C:
The case involved the sale of agricultural land by the assessee and the subsequent assessment of capital gains. Initially, the assessee offered capital gains based on his share in the land. However, a notice was issued under section 148 as the sales consideration was not in accordance with section 50C. The revised return was filed, reflecting the stamp duty value as per section 50C, and taxes were paid accordingly. The AO accepted the revised return but initiated penalty proceedings under section 271(1)(c) for alleged concealment. The CIT(A) upheld the penalty, stating that the revision was not voluntary but in response to the notice. The assessee argued that the stamp duty value exceeded the fair market value, no excess amount was received, and penalty should be independent of assessment findings. The Tribunal noted that the addition was based on deeming provisions of section 50C, the AO did not dispute the consideration received, and the genuineness of documents was not questioned. It was held that agreeing to additions due to deeming provisions did not constitute furnishing inaccurate particulars, and penalty was unjustified. Consequently, the penalty was deleted.

Penalty Proceedings under Section 271(1)(c) for Alleged Concealment of Income:
The penalty proceedings under section 271(1)(c) were initiated based on the alleged concealment of income by the assessee. The AO imposed a penalty for not showing capital gains as per section 50C in the original return. The CIT(A) upheld the penalty, considering the revision as not voluntary but in response to a notice. The assessee contended that penalty should be based on independent findings in penalty proceedings and cited relevant case laws. The Department argued that since the assessee admitted the proposed income and revised the return after notice, the penalty was justified. The Tribunal observed that the addition was made under deeming provisions of section 50C, the consideration received was not disputed, and the genuineness of documents was not questioned. It was held that agreeing to additions due to deeming provisions did not amount to furnishing inaccurate particulars, leading to the deletion of the penalty. Consequently, the appeal of the assessee was allowed, and the penalty was set aside.

In conclusion, the Tribunal ruled in favor of the assessee, highlighting that the penalty for alleged concealment of income was unjustified as the additions were made based on deeming provisions without questioning the genuineness of the documents. The decision emphasized that agreeing to additions under such provisions did not constitute furnishing inaccurate particulars, resulting in the deletion of the penalty.