2015 (9) TMI 1107 - AT - Income Tax

Levy of penalty u/s. 271(1)(c) - contention of the assessee is that when Capital Gains are computed by invoking the provisions of section 50C and the assessee has computed Capital Gains on actual sale price, it is not a case of filing of inaccurate particulars - Held that - In the present case the assessee has not correctly disclosed the sale consideration in the original return of income. The penalty has not been levied for not adopting market price in accordance with the provisions of section 50C but for not fully and truly disclosing the sale consideration in the return of income. Therefore, the ratio laid down in the case of Commissioner of Income Tax Vs. Madan Theatres Ltd. (2013 (6) TMI 96 - CALCUTTA HIGH COURT ) will not be applicable in the present case. From the appreciation of facts of the case, we are of the considered opinion that the assessee has not fully and truly disclosed all material facts which are necessary for the assessment. The assessee has furnished inaccurate particulars of his income. The assessee in his return of income suppressed the actual sale consideration of land and also the rental income, thus, making him liable for levy of penalty u/s. 271(1)(c) of the Act. - Decided against assessee.

Summary

Issues:
Levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 for not fully and truly disclosing income in the return of income.

Detailed Analysis:

Issue 1: Background and Initiation of Penalty Proceedings
The appeal pertains to the confirmation of penalty u/s. 271(1)(c) by the Commissioner of Income Tax (Appeals) for the assessment year 2004-05. The penalty was levied against the assessee for not disclosing income fully and truly in the return of income, specifically related to Long Term Capital Gains and rental income. The Assessing Officer observed that the revised return filed by the assessee was beyond the time limits specified u/s. 139(5) of the Act, hence not considered as a valid revised return.

Issue 2: Assessee's Arguments
The assessee contended that the revised return was filed in compliance with the Assessing Officer's direction to adopt the market value of land as per stamp valuation under section 50C of the Act. The assessee argued that there was no concealment or furnishing of inaccurate particulars, citing a judgment of the Hon'ble Calcutta High Court in support of their position.

Issue 3: Revenue's Arguments
The Revenue, on the other hand, alleged that the assessee deliberately suppressed the actual sale consideration of land and rental income. They highlighted discrepancies between the original and revised returns, including the inclusion of non-allowable expenses and previously undisclosed rental income.

Issue 4: Tribunal's Decision
Upon reviewing the facts and submissions, the Tribunal found that the assessee had indeed admitted to a higher sale consideration in the revised return compared to the original return. The Tribunal rejected the assessee's argument that the revised return was filed in compliance with the Assessing Officer's direction under section 50C, emphasizing that the assessee failed to fully and truly disclose all material facts necessary for assessment.

Issue 5: Conclusion
Ultimately, the Tribunal upheld the penalty imposed by the Commissioner of Income Tax (Appeals) under section 271(1)(c), stating that the assessee had furnished inaccurate particulars of income by suppressing actual sale consideration and rental income. The Tribunal dismissed the appeal, affirming the penalty and the impugned order.

This detailed analysis covers the background, arguments presented by both parties, the Tribunal's decision, and the conclusion regarding the penalty imposed on the assessee for not fully and truly disclosing income in the return of income.