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TMI Blog2014 (6) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the assessee liable for penalty of concealment of income - all the relevant facts were disclosed by the assessee and it is not the case of the Revenue that any facts disclosed by the assessee in the return of income were found to be incorrect or erroneous or false – thus, the levy of penalty u/s 271(1)(c) of the Act was not justified – Decided in favour of Assessee. - ITA No. 5115/Del/2013 - - - Dated:- 6-6-2014 - Shri G. D. Agrawal And Shri I. C. Sudhir,JJ. For the Appellant : Shri R. M. Mehta, CA. For the Respondent : Ms. Sudha Kumari, CIT-DR. ORDER Per G. D. Agrawal, VP : This appeal by the assessee is directed against the order of learned CIT(A)-VI, New Delhi dated 25th July, 2013 for the AY 2006-07. 2. Ground No.1 of the assessee s appeal reads as under:- The order passed by the CIT(A) confirming the levy of penalty of Rs.7,26,45,992/- imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 (the Act) is erroneous both on facts and in law and, therefore, liable to be set aside on this ground itself. 3. The other grounds are only arguments in support of above ground No.1. 4. At the time of hearing befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the return of income and the computation filed along with the return of income and pointed out that in the return of income, the assessee disclosed long term capital gain on sale of shares amounting to Rs.32,27,119/-. However, in the computation itself, assessee gave the note that the capital gain on sale of shares is not liable to be assessed in the year under appeal. Further, in another note which was filed alongwith return of income, it was explained by the assessee that the assessee had entered into an agreement dated 25.09.2005 for sale of its shareholding in Escorts Heart Institute and Research Centre Ltd. (hereinafter referred to as EHIRCL ) to M/s Fortis Healthcare Services (P) Ltd. for a consideration of Rs.32,49,51,257/-. However, the very formation of EHIRCL has been challenged in Hon'ble Delhi High Court and Hon'ble Delhi High Court has passed the status quo order 30th September, 2005 in respect of aforesaid sale transaction. In view of the above, it was claimed that capital gains arising out of the aforesaid transaction may not be considered for taxation in AY 2006-07. It is further submitted that the above belief of the assessee is based on the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. Therefore, merely because in the subsequent year the income from capital gains is not offered by the assessee, it cannot be inferred that there was concealment of income by the assessee in the year under appeal. 9. We have carefully considered the arguments of both the sides and perused relevant material placed before us. The facts have been recorded by the Assessing Officer in the penalty order and therefore, for ready reference, we reproduce herein below the relevant portion thereof:- Return of income declaring an income of Rs.307028354/- was filed by the assessee on 11.12.2006. However, this entire taxable income related to long term capital gains on sale of the assessee s share holding in EHIRCL to M/s Fortis Healthcare Services (P) Ltd. The assessee disputed its liability to pay tax on these capital gains even though the liability was self computed by the assessee in the electronic return filed by it. The return of the assessee was processed u/s 143(1) of the Act and a demand of Rs.130006605/- was raised on account of this long term capital gain. The case of the assessee was taken up for scrutiny u/s 143(3) and the income under the head capital gain was assessed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has disclosed the income in the return of income, paid tax thereon but claimed that the income is not taxable. The Assessing Officer did not accept the assessee s claim and also levied penalty under Section 271(1)(c) in respect of the capital gains which is already disclosed by the assessee in the return of income. If the view of the Assessing Officer and learned CIT(A) is accepted, it may lead to a situation where the assessee would be debarred from making any claim before the Assessing Officer. Whether making of a claim before the Assessing Officer that certain part of income is non-taxable is an offence? We are really surprised to see the levy of penalty under Section 271(1)(c) on the facts of the assessee s case. The very basis of the levy of penalty under Section 271(1)(c) is the concealment of income or furnishing of inaccurate particulars of income. Where is the concealment of income in this case? Whether making of a claim is a concealment? The reply is certainly NO. Hon ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt.Ltd. (2010) 322 ITR 158 (SC) held as under:- Where there is no finding that any details supplied by the assessee in its return are found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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