2022 (4) TMI 1275 - AT - Income Tax

Levy of penalty of concealment u/sec. 271(1)(c) - difference in stamp value in sale consideration as disclosed in return of income and as assessed by registrar stamps - matter was referred under section 50C(2) to departmental valuer - HELD THAT - We are of the opinion that the AO has considered the full value consideration U/s 50C as against the actual sale consideration declared by the assessee . The increased of value by the AO in the full value consideration does not amount either concealment of particulars of income or furnishing inaccurate particulars of income. Further we observed additions made on values of Dy. Registrar office being deemed value and even additions on such deemed value accepted by assessee it cannot be said furnishing of inaccurate particular for levy of penalty of concealment u/sec. 271(1)(c). We are of the opinion that said claim made under the provisions of the Act is disallowed by the AO would not attract the penalty provisions of Section 271(1)(c) - in case of CIT vs. Reliance Petroproducts Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT has held that where the information given by the assessee is not found to be incorrect the assessee cannot be held guilty of furnishing inaccurate particulars of income for the purpose of levying the penalty U/s 271(1)(c) - Hon ble Supreme Court has also observed that merely making a wrong claim does not amount to furnishing inaccurate particulars of income in the absence of finding that any detail by the assessee is incorrect or false. Based on the ld. AR for the assessee has referred to various decisions of the High Courts and Coordinate Bench of the Tribunal on the point that penalty order passed by the AO based on different charges in the show cause notice is not valid. Accordingly, in view of the facts and circumstances of the case the penalty levied by the AO u/s 271(1)(c) of the Act is not sustainable and the same is deleted. Decided in favour of assessee.

Summary

Issues Involved:
1. Levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Determination of income under Section 50C of the Income Tax Act, 1961.
3. Whether the assessee concealed income or furnished inaccurate particulars of income.

Issue-wise Detailed Analysis:

1. Levy of Penalty under Section 271(1)(c):
The primary issue is the confirmation of a penalty of ?500,000 levied under Section 271(1)(c) for the assessment year 2012-13. The assessee argued that the penalty was unjustified as the discrepancy arose from a bona fide belief and was based on expert advice. The assessee cited several case laws, including CIT V/s Skyline Auto Products (P) Ltd. and Hindustan Steel Ltd. V/s State of Orissa, to support the argument that a bona fide mistake does not constitute concealment or furnishing of inaccurate particulars. The Tribunal agreed with the assessee, noting that the addition was based on the valuation by the departmental valuer under Section 50C, which does not automatically imply concealment or furnishing inaccurate particulars.

2. Determination of Income under Section 50C:
The assessee had filed a return declaring a total income of ?1,30,00,000 and paid tax on the long-term capital gain based on actual sale consideration. However, a notice under Section 148 was issued due to a difference in the stamp value of the sale consideration, leading to a reassessment under Section 50C. The departmental valuer assessed the property at ?1,71,72,400, resulting in an addition of ?23,23,310. The Tribunal noted that the variation in the sales value versus the value adopted by the departmental valuer does not amount to concealment or misrepresentation of facts by the assessee.

3. Concealment of Income or Furnishing Inaccurate Particulars:
The Tribunal emphasized that concealment is always with reference to facts and cannot be imposed based on a difference of opinion or estimates. The Tribunal cited the Supreme Court's decision in CIT Vs. Reliance Petroproducts Pvt. Ltd., which held that merely making a claim that is not sustainable in law does not amount to furnishing inaccurate particulars. The Tribunal concluded that the assessee had not concealed any particulars of income nor furnished inaccurate particulars, as the details provided in the return were not found to be incorrect or false. Consequently, the penalty under Section 271(1)(c) was deemed unsustainable and was deleted.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the deletion of the penalty levied under Section 271(1)(c). The judgment was pronounced in the open court on 25/04/2022.