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TMI Blog2022 (7) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same was ultimately extended upto 28th February 2022 in M.A No. 21 of 2022 dated 10th January 2022. Therefore, there is no delay as such in the filing of the appeal. 3. As transpires from the orders of the authorities below, penalty u/s. 271(1)(c) of the Act, for concealment/furnishing inaccurate particulars of income was levied on the assessee amounting to Rs. 2,92,210/- being 100% of the tax sought to be evaded on account of disallowance of claim of exemption u/s. 54F of the Act made in assessment amounting to Rs. 28,36,982/-. The same was deleted in appeal by the Ld. CIT(A). Hence the present appeal before us by the assessee raising the following grounds: (1) The ld. CIT(A) has erred in law and on the facts & in circumstances of the case by deleting the penalty of Rs. 2,92,210/- levied u/s. 271(1)(c) of the Act, 1961 for concealment of income even though the case falls under exception clauses envisaged in CBDJ Circular No. 03/2018, relevant excerpts of which read as under:-"where Revenue Audit Objection has been accepted by the Department". (2) It is, therefore, prayed that the order of ld. CIT(A) may be set aside and that of the Assessing Officer be restored. 4. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s. 54F is allowed and therefore, withdrawn. Since the assessee has furnished inaccurate particulars of his income and thereby concealed the particulars of his income, therefore, penalty proceedings u/s. 271(1)(c) of the IT, Act is hereby initiated separately." 6. But subsequently in appellate proceedings, the ld. CIT(A) held that the assessee was entitled to exemption u/s. 54F of the Act, taking the view that the deeming fiction created u/s. 50 of the Act, with respect to depreciable assets being treated as short term capital gains, would be confined for the purposes of mode of computation of capital gain contained in Section 48 & 49 of the Act and would not cover the claim of exemption u/s. 54F of the Act. Accordingly, the ld. CIT(A) directed the Assessing officer to verify the claim of the assessee for deduction u/s. 54F of the Act and if the conditions were found fulfilled he directed the AO to allow the same to the assessee. The findings of the Ld. CIT(A) to this effect find mention in the order of the AO dated 16-02-2017 giving effect to the CIT(A)'s order at para 2 as under: 2. The Learned CIT(A)-10, Ahmedabad Vide order No. CIT(A)-10/ITO.WD/1(2)(1)/354/15-16 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of income with regard to returning short term capital gain earned by it as long term capital gains and thereafter incorrectly claiming exemption u/s. 54F of the Act, the proceedings for levy of penalty were conducted on account of the assessee having been found ineligible to claim exemption u/s. 54F of the Act since it failed to fulfil the conditions specified therein. Thus penalty proceedings were conducted and penalty levied on a charge totally different from the charge on which it was initiated. 10. Penalty proceedings being quasi criminal proceedings, the charge in relation to which the assessee is being subjected to levy of penalty has to be clear and all proceedings have to be conducted on the basis of that charge only. It cannot be the case where the proceedings are initiated on account of one charge but conducted and levied on account of a totally different charge. The entire proceedings therefore for levy of penalty are illegal and against all tenets of law. 11. This glaring illegality in the penalty order passed in the present case was pointed out to the Ld. DR during the course of hearing before us. 12. The Ld. DR though was unable to controvert the facts as noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 290. 6. That commencement of construction is not material and placed reliance on the decision of Karnataka High Court in the case of CIT vs J R Subhramany Bhat [1996] 28 Taxman 578. 7. That he has not filed appeal on quantum as he was under tremendous mental stress because his wife was suffering from cancer. 8. That he has not furnished any inaccurate particulars of income, only dispute is regarding interpretation of section 54F. 15. The findings of the Ld. CIT(A) deleting the penalty levied taking note of the submissions of the assessee as above at Para 8 of his order as under: 8. I have gone through the submissions of appellant. The appellant has made a case that he was under bonafide belief that he would be able to make entire investment within two year from the date of sale deed but if because of some reason the construction is not completed or deed is not signed then he is not liable for furnishing inaccurate particulars of income. On the issue of Capital Gain account scheme also conflicting view has been taken by Madras High Court in the case of Venkata Dilip Kumar, Kartha-HUF vs. CIT (Madras High Court) W.P. No. 16249 of 2018 dated 05.11.209(sic) as under: "Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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