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TMI Blog2014 (8) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of assessment proceedings in the case of M/s Bedi Automobiles, Jalandhar Road, Hoshiarpur for the assessment year 2007-08, it was noticed that Smt. Bhupinder Kaur, partner of the said firm had made/introduced capital addition of Rs. 37,00,000/- in her capital account. Sources of the said capital addition were explained to be out of sale of 13 Kanals, 12 Marlas agricultural land which was sold @ Rs. 4,00,000/- per acre (for total consideration of Rs. 11,90,000/-) as per sale deed dated 08.08.2007 whereas, the land was stated to be sold @ 23,00,000/- per acre to prove the investment of Rs. 37,00,000/-. Perusal of the copy of the said sale agreement reveals that it does not prove to be a genuine agreement due to the following: The agreement for sale of land was executed between Smt. Bhupinder Kaur W/o Sh. Maninder Pal Singh (seller) and Sh. Surjit Singh S/o- Sh. Bir Singh, (purchaser) r/o- Mehli Gate, Phagwara. The said agreement has not been signed by the purchaser party i.e. Sh. Surjit Singh, S/o- Shri Bir Singh, but it was signed by one Shri Mohan Singh on behalf of Sh. Surjit Singh. Moreover, Shri Mohan Singh was not having any power of attorney from the said Shri Surjit S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral land not liable to Income Tax. Taxable Income then was worked out at Rs. 26,85,903/- Tax payable thereon after payment of advance Tax was Rs. 12,89,333/- and I was short of finances I could make deposit of self assessment Rs. 2,25,000/- on 03.02.2010 much before the receipt of notice u/s 148 I. Tax Act. It is not a case where I have shown lesser income in return filed u/s 139(1) or u/s 139/148 thereafter I filed the Income Tax return u/s 148 Tax Act. Showing the escaped income as taxable income. It is a case where return is filed late, not within stipulated time u/s 139(1) or 139(4) I. Tax Act. Cause for the delay is bona fide belief that Income is not liable to exceed the taxable limit excluding the Income arises from sale of agricultural land situated outside Municipal limit. Thereafter financial shortage causes delay in submitting the Income tax return. Your kind attention is invited to the provisions of sec. 271(1)(c) Income Tax Act. Penalty cannot be imposed in following circumstances:- Where assesses has concealed the particulars of his Income or furnished inaccurate particulars. I have not concealed any Income in my Income Tax return filed in response to notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that "Penalty under U/s 271(1)(c) - Concealment - Original assessment completed - search at assessee's premises - Disclosure that income from a firm K was assessee's income which was not included - Notice under section 148- Assessee now including income of K- Imposition of penalty- sustained to the extent of minimum imposable by AAC - AAC's order upheld. In the light of the above stated facts when the assessee itself filed revised returns it owned the amounts of concealed income as its own income and the fact that the revised returns were filed only after the issuance of notice under Section 148, and that too, when the I. T. Department was able to lay hands on evidence and documents incriminating to the assessee from where extra income could be proved, considering the material on record and the entirety of the circumstances and the fact that there was a difference of income between the original returned income and the revised returned income and no particular of item of income had been pointed out to explain that the revised returns were merely the result of inadvertent mistake or omission, coupled with the statements of the partners of the assessee firm as also the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l land produced by the assessee is not found to be genuine by the Assessing Officer. (v) The assessee has concealed the particulars of income and also filed inaccurate particulars of income. (vi) The explanation offered by the assessee that the income disclosed in the return under the head "Income from other sources" is undisclosed income of the assessee from the sale of land. 6.7 On the other hand the assessee has submitted during the course of assessment and penalty proceedings that the assessee has disclosed this income (Rs. 25,10,000/-) to be peace of mind as income from other sources. The assessee throughout the assessment and penalty proceedings has taken the stand that the income of Rs. 25,10,000/- has been earned from the sale of agricultural land and was not taxable as per provisions of Income Tax Act, 1961 but to by peace of mind, the income earned apart from mentioned in the sale deed of the agricultural land has been offered for tax as income from other sources. According to the assessee as the particulars of land mentioned in the agreement to sell and in the sale deed are same, it cannot be said that the assessee has earned income from any other source apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of doubt should go in favour of the assessee in all probability. Let us presume for the argument sake that the return has been filed in response to notice u/s 148 of the Income Tax Act, 1961. After this presumption, we have now find that under what provisions of the Income Tax Act, 1961, the assessee has concealed or deemed to have concealed or filed inaccurate particulars or deemed to have filed inaccurate particulars of income. Certainly, the case of the assessee does not fall under the provisions of Explanation 1 & Explanation 2 to Section 271(1)(c) of the Income Tax Act, 1961 as the returned income has been accepted by the Assessing Officer while completing assessment/reassessment and no separate addition/disallowance has been made. Although the Assessing Officer has not invoked the provisions of Explanation 3 to Section 271(1)(c) of the Income Tax Act, 1961 specifically but it appears that he levied penalty in the case of the assessee by invoking the provisions of this explanation which reads as under:- Explanation 3: "Where any person fails, without reasonable cause, to furnish within the period specified in sub-section (1) of Section 153 a return of his income which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Act and as such, eth second condition is also satisfied. However, as noticed earlier, in the present case a notice had been issued to the petitioner under section 148 of the Act on 10th March, 1997 which was within eth period specified under s. 153(1) of the Act. In the circumstances, the third condition namely, that no notice under s. 142(1) or s. 148 of the Act should have been issued within the period specified under sub-s (1) of s. 153 of the Act is clearly not satisfied. As discussed earlier, the conditions for applicability of Expln. 3 to s. 271(1) are commutative and each of the conditions has to be established for the purpose of invoking the said provision. In the present case, all the conditions are not cumulatively satisfied the failure on the part of the petitioner to furnish the return of income within the specified period, therefore, cannot be deemed to be concealment within the meaning of the Extn. 3 to s. 271(1)(c) of the Act. 15. In the light of the aforesaid, it is apparent that the case of the petitioner, does not fall within the ambit of Expl. to s. 271(1) of the Act and as such, no penalty could be levied on the petitioner under s. 271(1)(c) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee was very much aware of the fact that the assessment in the case of M/s. Bedi Automobiles had been made that is why they deposited Rs. 2.25 lacs being part payment on 03.02.2010 and depositing such tax before issuance of notice u/s 148 and pleading that consideration received on sale of agricultural land was exempt under Income Tax Act, cannot help the assessee to plead that the return has been filed voluntarily. This act of the assessee by depositing tax on 3.2.2010 of Rs. 2.25 lacs makes it evident that it was in the knowledge of the assessee that he has concealed the income and that is the reason that he has filed the return of income on 18.02.2010. In any case, the Ld. DR argued that it is not a voluntarily return and therefore, the ld. CIT(A) is not justified in canceling the penalty. 6. On the other hand, the ld. counsel for the assessee, relied upon the order of the Ld. CIT(A) and the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Rajiv Garg & Ors, reported in (2009) 323 ITR 256. 7. We have heard the rival contentions and perused the facts of the case. In the present case, the main issue is whether the return filed by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished inaccurate particulars of thereof and the assessee is liable to penalty u/s 271(1)(c) of the Act. 7.2. The Ld. CIT(A) has observed that it cannot be said in certainty that as to whether the return filed by the assessee is a voluntarily return or it has been filed in response to notice u/s 148 of the Act and the benefit of doubt should go in favour of the assessee in all probability. The Ld. CIT(A) cannot blow hot and cold in the same breath. This finding of the ld. CIT(A) cannot hold good for the reasons that the return filed by the assessee is a non est return, as has been held hereinabove by us. The return cannot be said to be voluntary return as per our findings hereinabove. The assessee falls under the main section 271(1)(c) of the Act and reference to Explanation 3 to section 271(1)(c) by the ld. CIT(A) for canceling the penalty is not a correct approach. Further, the decision relied upon by the ld. Counsel for the assessee in the case of CIT vs. Rajiv Garg & Ors. (supra) does not help the assessee. Therefore, the penalty so cancelled by the ld. CIT(A) is against the facts and circumstances of the case and accordingly, the order of the ld. CIT(A) is reversed and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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