2013 (8) TMI 516 - AT - Income Tax

Penalty u/s 271(1)(c) - Application for reduction of penalty u/s 273A - Long term capital gain - Sale of ancestral property - CIT upheld penalty - Held that - it is seen that the penalty was deleted by the Tribunal in the case of late Harshadrai Contractor, i.e. father of these two assessees, and also in the case of Shri Balvantrai S. Contractor, uncle of these two assessees, who was co- owner of this land having 73% right of ownership. - long term capital gain was not declared in the regular return of income by these assessees and the same was declared along with petition filed by the assessee under section 273A of the I.T.Act. Following decision of Late Harshadrai Contractor Through L/H. Paresh Contractor v. Income-Tax Officer 2013 (7) TMI 823 - ITAT AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) of the Act for long term capital gain not declared in the original return but subsequently declared with an application under Section 273A.

Analysis:

Issue 1: Penalty Imposed by AO
The appeals involved penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Act for long term capital gain not initially declared in the original return but later disclosed by the assessee along with an application under Section 273A.

Issue 2: Tribunal Decision Precedents
The learned AR of the assessee cited a Tribunal decision in a similar case where penalty was deleted for non-disclosure of long term capital gain. The AR argued that the facts in the present case were identical to the precedent case, where penalty was deleted for the late Harshadrai Contractor and Shri Balvantrai S. Contractor.

Issue 3: Tribunal's Analysis
The Tribunal analyzed the facts, noting that the capital gain on the property was not declared in the original return but disclosed later in response to a notice issued under section 148 of the Act. The Tribunal referred to the previous decision where penalty was deleted for non-disclosure of income in a similar scenario.

Issue 4: Decision and Ruling
Based on the precedent set by the Tribunal in similar cases, the Tribunal ruled in favor of the assessee. The Tribunal held that penalty was not justified in the present cases and subsequently deleted the penalty imposed by the AO for all three assessment years.

Conclusion
The Tribunal allowed all the appeals of the assessee, concluding that the penalty under section 271(1)(c) of the Act for non-disclosure of long term capital gain was not justified in the present cases, following the precedent set in similar cases.

This detailed analysis covers the issues involved in the judgment, the arguments presented, the Tribunal's analysis, and the final ruling provided in the case.