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TMI Blog2018 (7) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... GH COURT OF GUJARAT] In the case on hand, the assessee was well aware of all the provisions of Act and accordingly, he has rightly claimed the deduction u/s 54EC of the Act. The assessee in the instant case has claimed the deduction u/s. 54G of the Act against the transfer of agriculture land, which was not notified for the purpose of Section 54G of the Act. Thus the deduction claimed under section 54G of the Act is contrary to the provisions of law. In the given facts & circumstances the assessee cannot take the shelter of the ignorance of the provisions of law. Similarly, the assessee agreed to such addition in the proceedings under section 263 of the Act, cannot be the ground for not levying the penalty. Thus the assessee was guilty of furnishing the inaccurate particulars of income. Therefore, we do not find any infirmity in the order of lower authorities. - decided in favour of revenue - I.T.A. No. 762/Ahd/2018 - - - Dated:- 3-7-2018 - Shri Rajpal Yadav, Judicial Member And Shri Waseem Ahmed, Accountant Member Appellant by : Shri Jyotish M. Shah, A.R. Respondent by : Shri Prasoon Kabra, Sr.D.R. ORDER Per Waseem Ahmed, Accountant Member The captio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural land located at 8/6, Mouje Kadiyali, Taluka-Rajula, Dist-Amreli, Gujarat. The impugned land was not notified in the urban area for the exemption under section 54G of the Act. The assessee on the sale of such land has earned a long-term capital gain of ₹ 1,18,60,239/- only. The assessee against such long-term capital gain has claimed deduction u/s 54EC and 54G for ₹ 44,00,000/- 74,65,134/- respectively. The assessee, an individual, engaged in the business of forwarding and customs clearance. He filed his return of income dated 29/09/2011 declaring total income of ₹ 43,83,330/- only. The income tax return of the assessee was processed u/s 143(1) of the Act at the income declared in return. Subsequently, the case of the assessee was selected under scrutiny and accordingly, notices u/s 143(2)/142(1) was served upon the assessee. The assessment was completed u/s 143(3) of the Act after making the disallowances of certain expenses for ₹ 1,53,970/- on ad-hoc basis vide order dated 30.01.2014. Subsequently, the learned CIT u/s 263 of the Act observed that the order passed u/s 143(3) of the Act is erroneous in so far prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s defective as it does not spell out specific charge for levying the penalty whether it is for concealment of income or furnishing particulars of income. Therefore, in the absence of specific charge mentioned in the notice issued u/s 274 of the Act, the penalty u/s 271(1)(c) cannot be levied upon the assessee. The dispute in the instant case is relating to the claim for the exemption u/s 54G of the Act which is a debatable issue but the assessee to avoid the litigation with the department and to buy peace of mind agreed to such addition. It was also claimed that the AO allowed the deduction u/s 54G of the Act after due verification in the assessment proceedings. Therefore, it cannot be concluded that the assessee has deliberately furnished inaccurate particulars of income. However, the learned CIT(A) disregarded the contention of the assessee and confirmed the order of AO by observing as under: Decision: 3.3 In this case, the assessee has filed return of income in 29.09.2011. Assessment order u/s 143(3) of the Act was passed on 30.1.2014 determining total income at ₹ 45,37,300/-. Subsequently, the Pr. CIT, Ahmedabad-5 vide order u/s 263 of the Act, dtd. 16.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed disclosing full details of capital gain vis-a-vis claim made u/s.54G. It is also contended that original order u/s. 143(3) was passed after due verification of case bv two different officers in reference to claim u/s.54G also and the claim was allowed. It is contended that order u/s.263 automatically proves that claim was made by the assessee and allowed by the officers originally, question of nondisclosure of fact or filing inaccurate particulars of income does not arise. It is also contended that merely on account of different opinion no penalty can be imposed. Further ii is contended that if even claim is not sustainable in law no penalty can be imposed. 3.5. Facts of the case and the submissions are considered. A perusal of assessment order. it is found that penalty proceedings u/s.271(1)(c) of the Act was property initiated and penalty notice u/s.274 r.w.s. 271(1)(c) of the Act was issued on 30.08.2016 which was duly served upon the assessee. In the notice issued u/s.271(1)(c) of the Act the default has been clearly specified. Therefore, objections raised regarding the initiation of proceedings u/s.271(1)(c) of the Act are dismissed. The appellant has claimed deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the grounds of appeal are dismissed. 4. Accordingly, the appeal stands dismissed. Being aggrieved by order of learned CIT(A) assessee is in the second appeal before us. The learned AR before us filed a paper book which is running from Pages 1 to 79 and made written submissions which are reproduced as under: Invalid Bad Penalty Penalty levied is invalid bad as Notice u/s 274 r.w.s 271 for penalty u/s 271(1)(C) does not state clear default for which it is issued. Penalty Notice does not mention specifically, whether it is issued for concealment of income or for furnishing inaccurate particulars of income. It specifies ..... have concealed the particulars of your income and furnished inaccurate particulars of such income....................... While issuing notice for penalty AO has to apply mind for specific default. (S.C.) SSA's Emerald Meadows 386 ITR 13 (Mumbai (TAT) Meherjee Cassinath Holding P. Ltd. ITAT online 11- 05-2017 Without prejudice to above Facts Return of Income was filed disclosing full details of capital gains vis-a- vis claim made u/s 54-G. Original order u/s 143(3) dated 30-01-2014 was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue loss - No concealment Guj H.C. - BTX Chemicals P. Ltd. 288 ITR 796 /205 CTR 252 5. No evidence-Assessee concealed Ahmedabad ITAT- Gruh Finance Ltd. 316 ITR 441 Concealment implies deliberate Act S.C. K.C. Builders 265 ITR 562 6. Assessee admitting mistake - Applying provision of s. 263- before levying penalty, admitted NO penalty. Guj.H.C Milex Cable Industries -261 ITR 675-182 CTR 442 The learned AR also further submitted as under: During the course of hearing today on 17/05/2018, your Honours instructed to give clarification regarding how the claim u/s 54G was made on the basis of the facts of the case. I, Devendra N. Thakker, solemnly declare the following: This is regarding the claim mad u/s 54G. Sir, I was under the bonafide belief that if on the sale of a capital asset, if the sales proceeds are invested in another capital asset, then exemption would be available. The concerned gain was from sale of Land at Rajula. Against the sale, I purchased another commercial property. I made inquiries regarding the distance of Rajula from Kadiyali. I also invested the sums in new property for the purpose of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxation laws. In this regard, information available on internet is also attached herewith. 2. Further, assessee claim that he has been advised on the basis of case laws wherein the Court had allowed deduction saying that one should not go in to the intricacies of laws and if the intention of INVESTING the funds within time limit is fulfilled, then exemption would be allowable . However, assessee has failed to inform that who has given him such legal advise and what are the case laws on which he relied. 3. Section 54G was introduced to promote balance regional and industrial development in industrially backward non-urban areas. It stipulated two essential conditions (i) capital gain should arise transfer of land used for the purpose of business situated in a Urban Area and the assessee has within a period of one years or 3 years of transfer purchased / achieved land or building for the purpose of his business, in a Non Urban Area. In this case, not only legislative intent has been defeated but both the conditions are also not fulfilled as firstly the land which is sold is not in urban area and land which is purchased is in urban area i.e. proper Ahmedabad. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Jurisdictional High Court in the case of Snita Transport Pvt. Ltd. vs. ACIT reported in 42 taxman.com 54, wherein it was held as under: 9. Regarding the contention that the Assessing Officer was ambivalent regarding under which head the penalty was being imposed namely for concealing the particulars of income or furnishing inaccurate particulars, we may record that though in the assessment order the Assessing Officer did order initiation of penalty on both counts, in the ultimate order of penalty that he passed, he clearly held that levy of penalty is sustained in view of the fact that the assessee had concealed the particulars of income. Thus insofar as final order of penalty was concerned, the Assessing Officer was clear and penalty was imposed for concealing particulars of income. In light of this, we may peruse the decision of this Court in case of Manu Engineering Works (supra). In the said decision, the Division Bench came to the conclusion that language of and/or may be proper in issuing a notice for penalty, but it was incumbent upon the Assessing Authority to come to a positive finding as to whether there was concealment of income by the assessee or whether an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued u/s 274 of the Act cannot make the penalty proceedings u/s 271(1) of the Act as invalid. Similarly, the case law relied on the assessee, i.e. Price Waterhouse Coopers Pvt. Ltd. (supra) also does not support the case of the assessee. In the case of Waterhouse Coopers Pvt. Ltd. (supra), there was disclosure in the tax audit report for the disallowance to be made in the tax audit for the provision of gratuity under section 40A(7) of the Act. But the same was not disallowed in the computation of income. Therefore, there was no deliberate act either to conceal the income nor to furnish the inaccurate particulars of income. Similarly, we also note that the facts of the case, i.e. Reliance Petroproducts Pvt. Ltd. does not support the case of the assessee. It is because the related transactions were disclosed in the accounts, but the same was not disclosed in the statement of income inadvertently. Thus there was no deliberate act either to conceal the income nor to furnish the inaccurate particulars of income. In the case on hand, the assessee was well aware of all the provisions of Act and accordingly, he has rightly claimed the deduction u/s 54EC of the Act. The assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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