2018 (1) TMI 732 - AT - Income Tax

Penalty u/s 271(1)(c) - concealment of long term capital gain arised on account of sale of agricultural land - as per assessee sale transaction and long term capital gain were shown in the return of income of HUF on the advice of Tax consultant - Held that - the assessee has filed all the details of the alleged transaction of sale of agriculture land as well as various rebates and exemptions claimed which have been shown in the income tax return filed by the assessee in the capacity of his HUF. It cannot be presumed that the assessee concealed particulars of income or furnished inaccurate particulars of income because the assessee has shown transaction of sale of agriculture land in the hands of assessee s HUF as the property in question was ancestral. We, therefore find no reason to interfere in the findings of Ld. CIT(A) deleting the penalty u/s 271(1)(c) - Decded in favour of assessee

Summary

Issues Involved:
- Appeal against penalty u/s 271(1)(c) of the Income Tax Act
- Alleged concealment of income in the case of long term capital gain arising from the sale of agricultural land

Analysis:

1. Background and Assessment by AO:
The appeal before the Appellate Tribunal ITAT Indore pertains to a penalty imposed under section 271(1)(c) of the Income Tax Act. The case originated from an assessment under section 143(3) where the Income Tax Officer re-opened the case due to discrepancies in the sale of land valuation. The AO calculated the long term capital gain at &8377; 96,93,340 due to non-compliance by the assessee.

2. Penalty Proceedings and CIT(A) Decision:
Penalty proceedings under section 271(1)(c) were initiated by the AO, leading to an imposition of &8377; 19,38,700 for alleged concealment of income. The CIT(A) later deleted this penalty, stating that the transaction was shown through the Hindu Undivided Family (HUF) and all necessary details were disclosed, hence no incorrect particulars were furnished.

3. Tribunal's Consideration:
The Tribunal analyzed whether the AO was justified in imposing the penalty on the long term capital gain. The CIT(A) had observed that all relevant details were available on record, and the claim that the property belonged to the HUF was based on consultation. The Tribunal concurred with the CIT(A) that the penalty was not warranted as there was no suppression of facts or furnishing of false information.

4. Legal Ruling and Dismissal of Appeal:
The Tribunal referred to the judgment of the Hon'ble Supreme Court in CIT vs. Reliance Petro Products, emphasizing that an incorrect claim, even if disallowed, does not amount to furnishing inaccurate particulars of income. Considering the facts and circumstances, the Tribunal upheld the CIT(A)'s decision to delete the penalty. The Tribunal dismissed the revenue's appeal, concluding that the assessee had provided all necessary details in the return filed by the HUF, and there was no concealment of income.

In conclusion, the Tribunal upheld the decision of the CIT(A) to delete the penalty imposed under section 271(1)(c) as the assessee had disclosed all relevant details in the return, and the claim regarding the property being ancestral and belonging to the HUF was considered valid.