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TMI Blog2018 (12) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... e wherein the assessee has shown long term capital gains of ₹ 9,01,537 and has claimed exemption under section 54. The computation so filed is silent on the nature and specifics of the property so purchased by the assessee. There is thus clearly lack of disclosure as far as nature of property so purchased by the assessee. On examination thereof, the AO has found that the assessee has sold an immoveable property in form of a shop and has purchased another shop and which is not eligible for exemption under section 54 of the Act. It is thus not a case where there is adequate disclosure of nature of property in the return of income and it is only the legal claim so made by the assessee u/s 54 on appreciation of such facts which has been denied by the AO. Therefore, it is clear case of furnishing inaccurate particulars of income and we see no infirmity in the findings of the AO in this regard. Regarding the contention of the ld AR that the assessee has suomoto revised the computation of income and even paid the taxes during the course of assessment proceedings, we are unable to accede to the said contentions of the ld AR - Appeal of the assessee is dismissed. - ITA. No. 104 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act on account of investment made towards purchase of shop against sale of shop during the year under consideration. On being asked as to why the exemption claimed of ₹ 17,80,000/- U/s 54 of the Act on account of purchase of commercial property may not be disallowed and added back to the total income, the assessee submitted a revised computation of total income vide letter dated 01.07.2016 wherein it was submitted that the assessee was in bona fide belief that the exemption allowable not only for residential house but on all type of properties and has wrongly claimed exemption which is hereby surrendered and the amount of tax has been duly deposited. 4. The AO however held that if the assessment proceedings were not initiated U/s 143(3) of the Act, the income to the extent of ₹ 17,80,000/- would have remained untaxed and it was held that the assessee has deliberately concealed his income to the extent of ₹ 17,80,000/- and same was brought to tax in the hands of the assessee and separately penalty proceedings U/s 271(1)(c) of the Act for filing of inaccurate of particulars of income/concealment of income were initiated by way of issue of notice U/s 271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vague findings giving in the penalty order, we find that a similar issue has been dealt with by this Bench in case of Smt. Shipra Jain and Ors. vs. ACIT (ITA No. 922/JP/2018 others dated 31.10.2018) wherein we have examined the issue at length in context of various authorities (including those which have been relied in the instant case by the ld AR) and our findings are contained at para 4.2 to 4.5 which are reproduced as under:- 4.2 Now coming to the first contention so raised by the ld. AR that in the absence of any specific charge against the assessee in the penalty notice and subsequently in the penalty order, consequent penalty imposed by AO is illegal and bad in law. We find that Explanation 5A to section 271(1)(c) is a deeming provision and subject to fulfilling the requisite conditions, it deems the assessee to have concealed the particulars of his income or furnished inaccurate particulars of such income similar to what has been provided in clause (c) to section 271(1) of the Act. In search cases as well, the legislature has thus envisaged applicability of one or both of these charges. It is settled position now as held by catena of judicial pronouncements that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given an opportunity to explain his position qua the imposition of penalty on the additions/disallowances made in the assessment. The AO considers the explanation of the assessee and then decides if the penalty is imposable or not. Further, the opinion of the AO as to concealment of particulars of income or furnishing of inaccurate particulars of such income has to be seen with reference to the day on which he initiates/imposes penalty. Later events, like confirmation or deletion of additions/disallowances in quantum appeals, are irrelevant in this context. 11. It transpires from the above discussion that, insofar as the issue before me is concerned, there are broadly two different stages having bearing on the imposition of penalty, namely, assessment and penalty. At the assessment stage, the AO has to record a satisfaction in the assessment order as to whether the additions/disallowances, on which penalty is likely to be imposed, represent concealment of particulars of income or furnishing of inaccurate particulars of income. There can be two sub-stages in penalty proceedings requiring the AO to record such satisfaction, viz., at the time of initiating the penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means getting satisfied as to whether it is a case of concealment of particulars of income or furnishing of inaccurate particulars of such income. It cannot be conceived that a direction to initiate penalty proceedings in the assessment order is only 'satisfaction' and not 'proper satisfaction'. This contention, if taken to a logical conclusion, would mean that after such a direction in the assessment order constituting his satisfaction, the AO should once again specifically record satisfaction with reference to each addition or disallowance as to whether it is a case of concealment or furnishing of inaccurate particulars. It is obviously an absurd proposition and goes against the unambiguous language of the provision. Thus, it is overt that after insertion of sub-section (1B) to section 271, invariably, the AO should be deemed to have recorded proper satisfaction with reference to each addition/disallowance as to concealment or furnishing of inaccurate particulars, once a direction is contained in the assessment order to initiate penalty u/s. 271(l)(c) of the Act. Requiring the recording of separate satisfaction, once again, by the AO would militate against the dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curate particulars of income', he must again specify it so in the notice at the time of initiation of penalty proceedings and also in the penalty order. After initiating penalty on the charge of 'furnishing of inaccurate particulars of income', he cannot impose penalty by finding the assessee guilty of 'concealment of particulars of income'. Again, he cannot be uncertain in the penalty order as to concealment or furnishing of inaccurate particulars of income by using slash between the two expressions. When the AO is satisfied that it is a clear-cut case of imposition of penalty u/s. 271(l)(c) of the Act on two or more additions/disallowances, one or more falling under the expression 'concealment of particulars of income' and the other under the 'furnishing of inaccurate particulars of income', he must specify it so by using the word 'and' between the two expressions in the notice at the time of initiation of penalty proceedings. If he remains convinced in the penalty proceedings that the penalty was rightly initiated on such counts and imposes penalty accordingly, he must specifically find the assessee guilty of 'concealment of partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finally held that the assessee would be deemed to have concealed the particulars of income or to have furnished inaccurate particulars of such income.' 19. Thus it is evident that when the AO is satisfied at the stage of initiation of penalty proceedings of a clear-cut charge against the assessee in any of the three situations discussed above (say, concealment of particulars of income), but imposes penalty by holding the assessee as guilty of the other charge (say, furnishing of inaccurate particulars of income) or an uncertain charge (concealment of particulars of income/furnishing of inaccurate particulars of income), the penalty cannot be sustained. 20. Another crucial factor to be kept in mind is that the satisfaction of the AO as to a clear-cut charge leveled by him in the penalty notice or the penalty order must concur with the actual default. If the clear-cut charge in the penalty notice or the penalty order is that of 'concealment of particulars of income', but it turns out to be a case of 'furnishing of inaccurate particulars of such income' or vice-versa, then also the penalty order cannot legally stand. 21. Apart from the above three situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said that the assessee had concealed its income and/or that it had finished inaccurate particulars of such income . Now, the language of and/or may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi-criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee.' 23. It is thus evident that uncertain charge at the stage of initiation of penalty proceedings can be made good with a clear-cut charge in the penalty order. In any case, existence of a clear-cut charge in penalty order is a must so as to validate any penalty order. 4.4 In the instant case, the Assessing officer has recorded his satisfaction in respect of the five items of disallowance/additions including undisclosed investment on construction of house amounting to ₹ 938,800 leading to penalty, as 'concealment of income' in the assessment order passed under section 143(3) r/w 153A, thereafter initiated penalty by issuance of notice u/s 274 r/w 271 dated 21.30.2014 in respect of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer and the contentions so raised by the ld AR in this regard are not accepted. 9. In the instant case, we find that the notice initiating the penalty proceedings is uncertain where the AO uses the expression concealment particulars of income or furnished inaccurate particulars of income . However, during the penalty proceedings, he has given a decisive and clear finding as reflected in the penalty order that the assessee is guilty of furnishing inaccurate of particulars of income' as the assessee, in its original computation has deliberately avoided disclosing true particulars and furnished inaccurate particulars by claiming wrong exemption u/s 54, which was as such not available to the assessee. Therefore, following the legal proposition as discussed above, we are unable to accede to the aforesaid contention of the ld AR. 10. Further, regarding the contentions of the ld AR on merits, we have gone through the computation of income so filed by the assessee along with the original return of income wherein the assessee has shown long term capital gains of ₹ 9,01,537 and has claimed exemption under section 54 of the Act amounting to ₹ 17,80,000. The computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant to furnish the documents relating to sale and purchase of properties during the year under consideration. The appellant has filed revised computation of income as its wrong claim would have seen the light of the day as soon as it file these documents required by the AO. Thus, it can be said that the filing of revised computation of income was not voluntarily and it revised its computation of income only when cornered by the AO. There is no ambiguity in the provisions of section 54 of the Act that the deduction under said section can be claimed only on the purchase or construction of a residential property and not for purchase of a commercial property. The appellant has made a patent wrong claim, which cannot be allowed to it as per the clear provisions of section 54 of the Act. 12. Before parting, we may add that we have gone the other decisions which have been relied upon by the ld AR and find that the same doesn t support the case of assessee. 13. In light of above discussions and in the entirety of facts and circumstances of the case, the order levying penalty u/s 271(1)(c) is hereby confirmed. In the result, the appeal of the assessee is dismissed. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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