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TMI Blog2019 (9) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars of income as contemplated in the provisions of section 271(1)(c). Therefore, the surrender made by the assessee is voluntary, for which only addition can be made and penalty under section 271(1)(c) of the Act cannot be initiated. Coming to the reliance placed by the ld. D.R. on the decision of the Hon'ble Madras High Court in the case of Sundaram Finance Ltd. vs. ACIT [ 2018 (5) TMI 259 - MADRAS HIGH COURT] we find that defect in the notice issued under section 274 read with section 271 of the Act, but in the present case the penalty levied under section 271(1)(c) of the Act has been deleted by the CIT(A), dealing with the issue on merit and not on the basis of defect in the notice issued under section 274 read with section 271 of the Act. No infirmity in the order of the ld. CIT(A), deleting the penalty levied under section 271(1)(c) of the Act. - Decided in favour of assessee. - ITA No.181/LKW/2018, C.O. No.09/LKW/2018 [In ITA No.181/LKW/2018] - - - Dated:- 22-8-2019 - Shri. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Assessee : Shri Swarn Singh, FCA For the Department : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 9,63,357/ iv. Interest on bank account - ₹ 20,413/- 4. The A.O also initiated penalty proceedings under section 271(1)(c) of the Act on the amount surrendered during assessment proceedings, by issuing notice dated 31.03.2016 under section 274 r. w. s. 271(1)(c) of the Act. A notice dated 21.06.2016 was also issued for furnishing reply to the penalty proceedings initiated under section 271(1)(c) of the Act. The assessee filed her reply on 14.09.2016. The AO after considering the reply of the assessee, passed the penalty order under section 271(1)(c) of the Act on 30.09.2016 and imposed a penalty of ₹ 22,00,000/- under section 271(1)(c) of the Act. 5. Aggrieved by the order of the A.O levying penalty under section 271(1)(c) of the Act, the assessee preferred an appeal before the ld. CIT(A). The submission of the assessee before the ld. CIT(A) was that the AO has not specified the limb of section 271(1)(c) of the Act, under which penalty proceedings have been initiated; and that since the A.O has not specified the limb of section 271(1)(c) of the Act, under which penalty proceedings have been initiated, the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 271(1)(c) of the Income Tax Act, 1961, penalty proceedings were being initiated. In the notice issued u/s 271(1)(c) of the income tax act, 1961 dated 31.03.2016, Ld. AO has noted as under:- .......It appears to me that you have concealed the particulars of its income or furnished inaccurate particulars of such income.............. However as per para 10 of the penalty order it is seen that AO has imposed penalty for both limbs i.e. for concealing the particulars of its income furnishing of inaccurate particulars of such income. Hence it is not correct on the part of the appellant to say that the AO did not specify the charge on which the penalty proceedings have been initiated or imposed. No doubt AO needs to specify the particular limb of section 271(1)(c) of the I.T Act, it is seen that AO has used both the limbs of the section 271(1)(c) of the IT Act for initiating and imposing the penalty. Each case about the satisfaction of AO will depend on facts of each case but one thing is certain, satisfaction of only AO is relevant, legally. Satisfaction of any other person cannot be imposed while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income. A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Appellant has shown this income as a part of income. It is evident from the records that all the purchases and sales of share have been clearly shown in the income and expenditure account and also there is no inaccurate particulars furnished by appellant and nor it is established by Assessing Officer during any proceedings. It is undisputed fact that in the course of the assessment proceedings, complete details were duly submitted by the appellant and several case laws were also cited in support of the claim made by the appellant. The said addition was however made by the AO on the basis of certain investigation done by Investigation Wing. Appellant has raised some very pertinent questions challenging the investigation done that is relied upon by the AO. It is a matter of fact that the assessee submitted copies of bill for purchase of shares, physical share certificates of M/s Makeover Vintrade Pvt. Ltd. order of Hon'ble Kolkata High Court dated 25.08.2011, contract n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars or concealed its income. It is also admitted fact that appellant had a bonafide belief and adequate reasons, in the shape of copies of bill for purchase of shares, physical share certificates of M/s Makeover Vintrade Pvt. Ltd, order of Hon'ble Kolkata High Court dated 25.08.2011, contract note of brokers, copy of DMAT Statement, etc. for filing the return of income declaring the correct value of the transaction. Thus the penalty so levied is not based on any fresh finding of fact. AO has not brought on record anything to support that the appellant has filed certain evidence or details whose particulars were concealed or whose furnished particulars were inaccurate. Merely due to the fact that the AO has not agreed to the same, it does not disprove the bonafide of the appellant. There is no fact brought on record submitted by the investigation wing or by AO to prove that the return filed by the appellant is inaccurate or the assessee had introduced her own money by routing through various channels. In view of the aforesaid facts and circumstances of the case, it is clear that the Ld. AO failed to discharge onus cast upon him in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the Revenue to show that the amount in question constituted the income and not otherwise. Here appellant has discharged the onus by placing on record all the evidence available with her like copies of bill for purchase of shares, physical share certificates of M/s takeover Vintrade Pvt. Ltd., order of Hon'ble Koikata High Court dated 25.08.2011 in Company Petition No. 339 of 2011, 519 of 2011 under Companies Act, contract note of brokers, copy of DMAT Statement, etc. AO on the other hand has not collected any adverse material to prove that the evidence and documents submitted by the appellant are false. AP has not even given appellant any opportunity to rebut the evidence collected in Kolkata or cross-examine witnesses who collected the evidence at the back of the appellant. Inspector has not given a categorical finding that M/s Oasis Cine Communication is non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has discharged the primary burden by a cogent explanation and placing evidence on record and the AO has not been able to rebut it by bringing anything contrary to the evidence placed by appellant and in light of categorical exposition of law laid down by the apex court, I do not find action of the AO as justified in imposing penalty u/s 271(1)(C) of the Act, Penalty imposed by the AO is hereby deleted. 7. Before us, the ld. D.R. submitted that the ld. CIT(A) has erred in law and on facts in deleting the penalty of ₹ 22,00,000/- imposed by the Assessing Officer on account of undisclosed income of ₹ 67,98,770/- under the head long term capital gain, without appreciating the fact in the return of income filed by the assessee under section 139(1), a fictitious claim of long term capital gain was made and the assessee deliberately concealed the income by furnishing the inaccurate particulars of income, therefore, the ld. CIT(A) was not justified in deleting the penalty, without appreciating the fact that the assessee has not been able to substantiate as to why wrong claim of long term capital gain was made by her in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e surrender made by the assessee is voluntary, for which only addition can be made and penalty under section 271(1)(c) of the Act cannot be initiated. 10. Coming to the reliance placed by the ld. D.R. on the decision of the Hon'ble Madras High Court in the case of Sundaram Finance Ltd. vs. ACIT (supra), we find that in that case the Hon'ble High Court has dealt with the issue relating to the defect in the notice issued under section 274 read with section 271 of the Act, but in the present case the penalty levied under section 271(1)(c) of the Act has been deleted by the ld. CIT(A), dealing with the issue on merit and not on the basis of defect in the notice issued under section 274 read with section 271 of the Act. 11. We, therefore, do not find any infirmity in the order of the ld. CIT(A), deleting the penalty levied under section 271(1)(c) of the Act. We, accordingly, confirm the order of the ld. CIT(A) and reject the grounds of appeal taken by the Revenue. 12. Coming to the Cross Objection filed by the assessee, the ld. counsel for the assessee did not press the grounds raised in the cross objection, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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