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TMI Blog2014 (11) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed the return of income on 31.07.2009 wherein long term capital gains of Rs. 5,84,27,373/- on sale of paintings, were offered to tax at the normal tax rate of 20% applicable to the long term capital gains under the Act. Thereafter, the assessee filed revised return on 08-09-2009 wherein the aforesaid long term capital gains are offered to tax at the concessional tax rate of 10% under proviso to sub section (1) of section 112 of the Act. In order to scrutinize the return filed by the assessee notice u/s. 143(2) of the Act was issued on 05-09-2010, followed by the notice u/s. 142 (1) of the Act dated 24-05-2011. During the pendency of scrutiny proceedings, assessee filed the second revised return on 11- 07 -2011, in which, the aforesaid long term capital gains were offered to tax back @ 20% tax rate as in the original return and the taxes due on the impugned capital gains were paid along with interest. While completing the assessment, the AO. in his assessment order noted that the second revised return filed on 11.7.2011 is beyond the time allowed under the Act and therefore, no cognizance can be taken thereof. Accordingly the AO considered the first revised return file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming concessional tax rate on capital gain arising from sale of paintings was due to bonafide belief which was later on corrected without any show cause notice given by the department. The assessee contended that the assessee did not furnish any inaccurate particulars of her income and there was only a wrong claim of a lower tax rate thereon due to the bonafide belief, hence the penalty u/s 271(1)(c) cannot be levied. The CIT(A) accepted the explanation of the assessee and was of the view that all the facts related to the impugned capital gain were fully disclosed by the assessee in the returns filed by her. The CIT(A) held that in the given facts and circumstances, the assessee cannot be held guilty of furnishing inaccurate particulars of her income and further the explanation furnished by her in this regard is found to be bonafide. Accordingly the penalty levied u/s 271(1)(c) was cancelled by the CIT(A). 4. Before us, the Ld. DR has submitted that in the original return, the assessee has offered the tax at the rate of 20% on capital gain arising from sale of paintings but subsequently the assessee filed revised return on 8.09.2009 in which the assessee had offered tax on Long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no penalty can be levied u/s 271(1)(c) on the basis of the revised return but only the original return has to be considered for the purpose of section 271(1)(c). He has submitted that the assessee has correctly offered the tax in the original return and, therefore, there is no question of levy of penalty based on the revised return wherein the assessee claimed concessional rate of tax at 10% instead of 20% due to the fact that the assessee did not claim index cost while computing Long Term Capital Gain. In support of his contention he has relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Onkar Saran & Sons (1992) 195 ITR 1 (SC) as well as the decision of Hon'ble Allahabad High Court in the case of Shree Ashray Lal Vs. CIT (223 ITR 705) and submitted that only the original return of income should be taken into consideration for determination of assessee's liability for penalty u/s 271(1)(c) and it cannot be said that the assessee concealed particulars of income already shown in the original return merely because such income was not shown subsequently in the revised return. The second argument of the Ld. Authorized Representative is regarding the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished, had such income being the total income. The difference between the tax on the total income assessed and the tax that would have been chargeable at such total income have been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished, therefore, the concealment of the income will be considered in the context of the tax assessed and paid by the assessee is less than what would have been if the correct particulars of income was furnished. 7. We have considered the rival submissions as well as relevant material on record. The question arises for our consideration and adjudication is whether offering the tax at a concessional rate applicable on a different category of income would amount to furnishing inaccurate particulars of income attracting the provisions of section 271(1)(c). The facts in the case of the assessee are not in dispute as the assessee filed its original return of income on 31.07.2009 and offered the Long Term Capital Gain on sale of paintings to tax at the normal rate of 20% as appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Term Capital Gain in question is arising from the transfer of listed shares, bonds, securities etc., however, in the return of income the assessee has specifically and categorically mentioned the capital gain arising from the sale of paintings. The source of income has been explained by the assessee in all the return of income which remains same and, therefore, there is no change in the source of income and the category of income which is specified as capital gain from sale of paintings then even if the assessee has applied incorrect rate of tax in the revised return, it would not constitute that the assessee has changed the class/nature of income eligible for concessional tax u/s 112(1) of the Income Tax Act. When there is no attempt on the part of the assessee to show the Long Term Capital Gain in a different category then merely because a concessional rate of tax was applied in the revised return does not ifso facto lead to the conclusion that the assessee has concealed the particulars of income. Even otherwise, all these facts and circumstances supports the explanation of the assessee that the concessional rate of tax on Long Term Capital Gain was applied on the basis of the ad ..... 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