2022 (11) TMI 73 - AT - Income Tax

Penalty u/s 271(1)(c) - Disallowance of exemption u/s 54F and 54EC - HELD THAT - As in the computation of total income furnished with the return of income for A.Y. 2013-14 filed on 14.03.2014, the assessee has done nothing but made an attempt to show less Long Term Capital Gain by making false claim under Section 54EC of the Act, without making any investment and therefore, the same was not legally admissible for the year under consideration. On this premise, the Revenue, in our considered opinion, rightly imposed penalty for intentionally furnishing inaccurate particulars of income within the meaning of Section 271(1)(c) of the Act. Thus, we do not find any iota of doubt in holding that the appellant is consciously and continuously mis-represented the facts and furnished inaccurate particulars of her income by making computation for this claim under Section 54EC of the Act and 54F of the Act. We therefore confirm the order passed by authorities below in imposing impugned penalty under Section 271(1)(c) of the Act. Assessee s appeal is dismissed.

Summary

Issues Involved:
1. Appeal against penalty imposed under Section 271(1)(c) of the Income Tax Act for disallowance of exemption under Section 54F and 54EC.
2. Failure to provide evidence for claimed investments.
3. Incorrect claims of deductions under Section 54F and 54EC.
4. Misrepresentation of facts and inaccurate particulars of income.
5. Imposition of penalty for furnishing inaccurate particulars of income intentionally.

Detailed Analysis:
1. The appeal was filed against the penalty imposed under Section 271(1)(c) of the Income Tax Act due to the disallowance of exemption under Sections 54F and 54EC. The penalty was imposed for concealing income by furnishing inaccurate particulars intentionally to avoid tax liabilities. The appellant claimed deductions under these sections based on investments made but failed to provide evidence during assessment proceedings.
2. The appellant sold a capital asset and claimed deductions under Section 54F and 54EC by stating investments in bonds and a Capital Gain Account Scheme. However, investigations revealed discrepancies in the claimed investments. The appellant did not invest the claimed amounts within prescribed time limits, leading to rejection of claims and imposition of penalty.
3. The appellant's revised statement of income revealed inconsistencies in the claimed investments. The appellant withdrew the claim under Section 54EC and admitted to investing a different amount in a property. The purchase of a readymade bungalow was beyond the prescribed time limit under Section 54F, rendering the deduction claim incorrect. The appellant's attempts to evade tax liabilities through false claims were highlighted, leading to the imposition of the penalty.
4. The appellant's actions were deemed as intentional misrepresentation of facts and furnishing inaccurate particulars of income. The appellant's attempts to show less Long Term Capital Gain by making false claims under Section 54EC without actual investments were considered legally inadmissible. The penalty was upheld for intentionally providing inaccurate income particulars.
5. The authorities confirmed the penalty under Section 271(1)(c) of the Act, citing the appellant's continuous misrepresentation of facts and inaccurate income particulars. The order dismissing the appeal was pronounced on 31/10/2022, upholding the penalty for intentional misrepresentation of income details.