2013 (2) TMI 424 - AT - Income Tax

Penalty for concealment Assessee filed return admitting nil income During the relevant previous year sold land - consideration shown in ROI was Rs. 41,29,500/- and Rs. 80,76,100/- respectively But value adopted by stamping authority was 41,33,280/- and Rs. 1,02,02,400/- AO levied penalty u/s 271(1)(c) Held that - Section 50C calls for substitution of the actual consideration, with the value adopted by stamping authority But, the actual consideration received by the assessee will not get altered by such substitution - It is only for the purpose of computation of capital gains, the substitution is done by AO - Clause (2) of Section 50C clearly gives the assessee a right to claim before AO that the value adopted by the stamp valuation authority exceeded fair market value. Further it can not be said that assessee was non-cooperative just because the registered sale deed copies were not furnished Sale deeds in general are collected by the buyers and unless buyers give a copy to sellers, it may not be easy for a seller to get copies thereof. Just because there is a substitution of valuation mentioned in Section 50C of the Act as the fair value, it cannot be said that there was any concealment of income or furnishing of inaccurate particulars No penalty should be levied u/s 271(1)(c) - Against the revenue.

Summary

Issues:
Penalty under Section 271(1)(c) of the Income-tax Act, 1961 for furnishing inaccurate particulars of income.

Detailed Analysis:
The appeal filed by the Revenue challenged the deletion of penalty under Section 271(1)(c) of the Income-tax Act, 1961 by the Commissioner of Income Tax (Appeals)-XII, Chennai. The case involved the assessee admitting nil income in the return for a particular assessment year but transferring vacant lands at Guduvanchery, Chennai, with sale consideration differing from the value adopted by the stamping authority. The Assessing Officer substituted the stamping authority's values for computing capital gains, leading to a penalty of Rs. 4,65,718 being levied on the assessee.

In the appeal before the Commissioner of Income Tax (Appeals), the assessee contended that the values stated in the return were the actual sale consideration, lower due to market conditions, and had not challenged the addition made by the Assessing Officer to avoid litigation. The Commissioner of Income Tax (Appeals) agreed that not every addition of income necessarily attracts a penalty under Section 271(1)(c) of the Act and deleted the penalty, citing a Tribunal decision that the guideline value adopted by the Registration Department was not conclusive proof of market price.

The Tribunal, in its analysis, noted that the assessee had cooperated during assessment proceedings but did not furnish copies of the sale deed. It clarified that the substitution of values by the Assessing Officer as per Section 50C of the Act does not alter the actual consideration received by the assessee. The Tribunal emphasized that the assessee had the right to claim if the value adopted by the stamp valuation authority exceeded the fair market value and that non-furnishing of sale deed copies did not necessarily indicate non-cooperation. The Tribunal concluded that there was no concealment of income or furnishing of inaccurate particulars to attract the penalty under Section 271(1)(c) of the Act, upholding the decision of the Commissioner of Income Tax (Appeals).

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the deletion of the penalty under Section 271(1)(c) of the Income-tax Act, 1961 by the Commissioner of Income Tax (Appeals)-XII, Chennai.