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TMI Blog2016 (10) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed deduction u/s 54B of the Act. The assessee has not challenged the findings of the authorities below that the assessee is not eligible for deduction u/s 54B of the Act and has accepted the taxability of the same. The AO has initiated the penalty proceedings for concealment of income, whereas the CIT (A) has confirmed the penalty on the ground of furnishing of inaccurate particulars of income. Therefore, it is seen that the AO and the CIT (A) are not on the same page for levy of penalty u/s 271 (1)(c) of the Act. Further, mere disallowance of a claim will not automatically attract the levy of penalty. Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Ltd, (2010 (3) TMI 80 - SUPREME COURT ) has held that a mere mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prior to amendment made by the Finance Act 2012 w.e.f 01-04-2013. 5. The learned CIT (A)-VI erred in not considering that the issue was debatable, hence no penalty cannot be levied. 6. The learned CIT (A)-VI erred in stating that investment was made prior to sale of the land whereas the purchase was made only out of the sale proceeds. 7. For these other ground which may be raised during or before the appeal is heard. It is prayed that the relief be granted . 2. Brief facts of the case are that the assessee is a society registered under the Societies Registration Act. It filed its return of income for the A.Y 2009-10 on 9.9.2009 declaring an income of ₹ 44,19,890. During the assessment proceedings u/s 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O observed that the lands were purchased prior to the sale of the original asset and that the assessee, being a society, is not eligible for deduction u/s 54B of the Act. Therefore, assessee s explanation was called for. In response, the assessee submitted that as per section 54B, the deduction is available to an assessee and since the society is also an assessee as per the Income Tax Act, it is eligible for exemption u/s 54B of the Act. AO, however, observed that the words used in section 54B are assessee or a parent of his and since the assessee is a society, it cannot have a parent and therefore, the provisions of section 54B are not applicable to the assessee. Further he also observed that the assessee has invested in acquisition of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the claim of section 54B was not applicable to the assessee s society even before filing of the return of income, the AO held that the assessee has suppressed the income to the tune of ₹ 5,10,18,594 u/s 54B of the Act. He accordingly, levied the minimum penalty u/s 271(1)(c) of the Act. Aggrieved, assessee preferred an appeal before the CIT (A) who confirmed the order of the AO holding that the assessee has furnished inaccurate particulars of income. Aggrieved by the order of the CIT (A), the assessee is in appeal before us. 4. The learned Counsel for the assessee, Shri Laxminiwas Sharma, submitted that the assessee was an educational society whose income was exempt from tax. However, the assessee had filed its retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions: i) Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Ltd, 322 ITR 158 ii) Hon'ble Supreme Court in the case of Bhavana Thanawala vs. ITO in ITA No.1171/Mum/2009 iii) Hon'ble High Court of Delhi in the case of CIT vs. Jakson Ltd in ITA No.48/2013 49/2013 iv) Hon'ble Punbaj Haryana High Court in the case of CIT vs. Shahbad Cooperative Sugar Mills Ltd, 322 ITR 73 v) Hon'ble Punjab Haryana High Court in the case of CIT vs. Sidhartha Enterprises, 322 ITR 80 vi) Hon'ble Bombay High Court in the case of CIT vs. Nalin P. Shah (HUF), Income Tax Appeal (LOD) No.49 of 2013 vii) ITAT Bangalore in the case of ITO vs.Shri M. Narayanaswamy in ITA No.723/bang/2010 viii) ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee which is chargeable to tax is the Long Term Capital Gain. The assessee has declared the LTCG, but has claimed deduction u/s 54B of the Act. The assessee has not challenged the findings of the authorities below that the assessee is not eligible for deduction u/s 54B of the Act and has accepted the taxability of the same. The AO has initiated the penalty proceedings for concealment of income, whereas the CIT (A) has confirmed the penalty on the ground of furnishing of inaccurate particulars of income. Therefore, it is seen that the AO and the CIT (A) are not on the same page for levy of penalty u/s 271 (1)(c) of the Act. Further, mere disallowance of a claim will not automatically attract the levy of penalty. Hon'ble Supreme Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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