9911796707
TMI Blog2020 (8) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the Managing Director of the Company. If such is the factual position, it will not only be a case of filing inaccurate particulars, but also a case of concealment of income. The information came to the Department through the AIR, which was forwarded by the Registration Department and after verifying the same, when notice was issued under Section 143(2), the assessee, for the first time statef that due to inadvertence, they did not disclose the particulars relating to the capital gains. The above facts will clearly show that the assessee did not act bonafidely and the belated explanation sought to be offered deserves to be rejected. One more attempt made by the assessee was 24 months after the assessment were completed by attempting to file a revised statement of income on 01.03.2017. This statement can never improve the case of the assessee nor exonerate them from penalty. Another contention advanced by M/s.S.Yogalakshmi is that the AO had not recorded his satisfaction that penalty proceedings have to be initiated, by relying to the decision in the case of D.M.Manasvi to support the argument that the enire circumstances should have been considered, more particularly, the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold two landed properties at Kalapatti and Dharapuram and the capital gain was worked out for both the properties at ₹ 1,37,31,142/-. However this was not admitted by the assessee in the return of income. Further, the Assessing Officer found that the sale of windmill amounting to ₹ 21,60,00,000/- was not admitted by the assessee in the return of income filed and the short term capital gain arising on the sale of windmill was ₹ 21,59,90,469/- after reducing the opening WDV of ₹ 9,531/-. The Assessing Officer called upon the assessee to explain this aspect and in the course of assessment, the assessee admitted to have omitted the sale of land and windmill and filed a letter dated 03.03.2015 along with a computation of Long Term Capital Gain [LTCG] on the sale of lands and the Short Term Capital Gain [STCG] on the sale of windmill. Taking note of the admission made by the assessee, the LTCG and the STCG were added to the total income of the assessee and accordingly assessment was completed. The assessment order stated that the penalty proceedings under Section 271(1)(c) is initiated separately. A notice under Section 274 r/w. 271(1)(c) of the Act dated 12.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no willful concealment of particulars and prayed for deleting the penalty. The Tribunal took note of the submissions, more particularly, the submission that it was an inadvertent mistake and rejected the same, after noting the conduct of the assessee and accordingly confirmed the order passed by the CIT(A) and dismissed the appeal. 6. M/s. S.Yogalakshmi, learned counsel for the appellant strenuously contended that the notice dated 12.03.2015 issued under Section 274 r/w. 271(1)(c) of the Act is defective and it is an outcome of non-application of mind and therefore, the notice is non-est in law. Consequently, all proceedings culminating in the order of the Tribunal have to be declared as non-est. Secondly, it was submitted that the assessee acted with bonafide that there was no malafide intention on the part of the assessee, that the assessee incurred huge loss, that there was no positive income as the banks have sold the property and that on re-working of the capital gains, the loss got reduced from RS.33 Crores to ₹ 11 Crores which was a paper loss. It is further submitted that the imposition of penalty under Section 271(1) of the Act is not automatic and the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hotels Private Limited vs. CIT ITA No.240/2010 III- Sec 271 (1) (C) of IT Act Concealment of income Furnishing inaccurate particulars of income have different connotations: 1. Sri T.Ashok Pai vs. CIT [(2007) 292 ITR 11 (SC)] 2. Dilip N Shroff [291 ITR 519 (SC)] 3. CIT Vs Lakhdhir lalji [85 ITR 77(Guj),] 4. CIT Vs Raj Trading Co. [(1996) 217 ITR 208 (Raj.)] 5. CIT vs Samson Perinchery [(2017) 392 ITR 4 (Bom.)] IV- Sec 271 (1) (C) of IT Act Satisfaction of the AO is essential while holding penalty: 1. Mak Data P. Ltd vs Commissioner Of Income Tax- (2013) 358 ITR 593 2. D.M. Manasvi - 86 ITR 557 (SC) 3. CIT vs. SSA Emerrald Meadows - ITA No. 380/2015 (Kar) 4. PCIT vs M/S Deccan Mining Syndicate Pvt - 2018 I.T.A. No.501/2017 (Kar HC) 5. Madhushree Gupta Vs UOI - 317 ITR 143(Del) 6. Commissioner of Income Tax vs. Dee Control and Electric Pvt. Ltd (2017) 100 CCH 0185 AllHC 7. CIT vs. Jain Export Private Ltd - ITA No.235/2013 8. CIT vs. MWP Ltd - ITA No.332/2007 9. CIT vs. Rucha Engineers Pvt. Ltd 2015-ITRV-HC-MUM-025 10. CIT vs. Dalmia Dyechem Industries - ITA No.1396/2013. V- Question of Law can be raised at any stage: K. LUBNA ORS. VS BEEVI ORS (2020) CIVIL APPEAL NOs.2442-2443 OF 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and windmill and the copy of the annual report was not placed before the Assessing Officer or before the CIT(A). The learned standing counsel placed reliance on the decisions in the case of N.G. Technoligies (In Liquidation) vs. Commissioner of Income Tax [(2016) 70 Taxmann.com 37 (SC)], Kuldeep Wines vs. Commissioner of Income Tax [(2014) 52 Taxmann.com 248(SC)], Jivanlal and Sons vs. Assistant Commissioner of Income Tax [(2019) 103 Taxmann.com 208 (SC)], Hamirpur District Cooperative Bank Ltd. vs. Commissioner of Income Tax, Kanpur [(2020) 113 taxmann.com 447 (SC)], Sundaram Finance Ltd. vs. Deputy Commissioner of Income Tax [(2018) 99 taxmann.com 152 (SC)] and [(2018) 93 taxmann.com 250(Madras)] and Chemmancherry Estates Co. vs. Income Tax Officer, Ward-VIII(2) [(2019) 111 taxmann.com 66 (Madras)]. 8. After elaborately hearing the learned counsels on either side and carefully perusing the materials placed before this Court including the decisions relied on by the learned counsels on either side, the first issue to be considered is whether the notice dated 12.03.2015 issued under Section 274 r/w. 271(1)(c) of the Act is defective. The argument of M/s. S.Yogalakshmi, learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t columns have been marked, more particularly, when the case against the assessee is that they have concealed particulars of income and furnished inaccurate particulars of income. Therefore, the contention raised by the assessee is liable to be rejected on facts. That apart, this issue can never be a question of law in the assessee s case, as it is purely a question of fact. Apart from that, the assessee had at no earlier point of time raised the plea that on account of a defect in the notice, they were put to prejudice. All violations will not result in nullifying the orders passed by statutory authorities. If the case of the assessee is that they have been put to prejudice and principles of natural justice were violated on account of not being able to submit an effective reply, it would be a different matter. This was never the plea of the assessee either before the Assessing Officer or before the first Appellate Authority or before the Tribunal or before this Court when the Tax Case Appeals were filed and it was only after 10 years, when the appeals were listed for final hearing, this issue is sought to be raised. Thus on facts, we could safely conclude that even assuming that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir return and attached a summary of total income adjusting profit on the LTCG and the STCG. To be noted, the assessee did not file a revised return. The assessment was completed under Section 143(3). In response to the penalty notice dated 12.03.2015, the assessee stated that there is no concealment of income or furnishing of any inaccurate particulars and therefore, Section 271(1)(c) will not stand attracted. Further opportunity was given to the assessee and submissions were made, after which, the Assessing Officer considered and levied penalty which order has been affirmed by the CIT(A) and the Tribunal. From the above dates and events, it is seen that the assessee took 19 months to respond to the notice dated 13.08.2013 issued under Section 143(2) and for the first time stated that due to oversight the sale of the lands and windmll have not been offered under the capital gains. It is not in dispute that the assessee did not disclose about the sale of the lands and windmill in the return of income. This is clear from the perusal of the return of income and in the relevant column, it is stated as Nil . The assessee relies upon the annual report and substantial portion of the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that the defect in the penalty notice is a question of law which can be raised by the assessee at any point of time. We have considered this submission and we have rejected it. The learned counsel relied on the decision of the Hon ble Supreme Court in the case of K.Lubna to submit that if the factual foundation for a case has been laid and the legal consequences of the same having been examined, the examination of such legal consequences would be a pure question of law. We have noted the factual position. The assessee understood the notice to be under both heads, namely, furnishing of inaccurate particulars and concealment of income. This is evident from the assessee s reply dated 08.04.2015 to the show cause notice dated 12.03.2015. Therefore, the decision in the case of K.Lubna does not help the assessee, as there is no substantial question of law arising from such contention. 16. The learend counsel argued that the financial condition of the assessee Company was also a relevant factor to assess their bonafides. This contention cannot be accepted because the settled legal position is that penalty cannot be cancelled on the mere ground that return of income and assessed inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
