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TMI Blog2022 (7) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... Undisclosed LTCG - assessee submitted that the assessee has failed to offer the Capital gain under the bonafide belief that the land is outside the statutory limit of 8 kms hence the sale is not taxable as capital gain - As facts of the case as they exist at the time of penalty order, there is concealment of income by the assessee from sale of impugned land - assessee has now filed additional evidence to claim that the land is agricultural land and beyond 8 kms. Therefore, in the interest of justice, we set aside the Penalty levied on the issue of sale of impugned land to the file of the assessing officer with a direction to decide the issue afresh after giving opportunity to the assessee. Assessee is directed to file all the relevant documents before the AO - AO shall also verify from the returns and other documents whether the assessee had offered income from agricultural activity from the impugned land in earlier years. The Assessing Officer shall be at liberty to collect necessary evidence independently. We specifically mention here that we have gone through the Penalty notice issued by the AO, it was observed that the AO has struck off the appropriate words in the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 3635/2014 with Shri Nandkishor Chaudhary Smt. Vijayalaxmi Chaudhary. It was further submitted vide submission dtd 05/12/2017 that the capital gain on the sale of aforesaid lands was not included in the return of income filed for AY 2015-16, under the bonafide belief that the land in question was situated beyond 8 Kms from the limits of Pune city. Hence it was inferred that the land did not come within the meaning of capital asset u/s 2(14) of the I T Act. A certificate to the effect was also issued by the Talathi of Bhukum/Bhugaon. However, the transactions were entered in books of accounts maintained by the assessee. This being the factual background, the assessee stated that inadvertently the income was not offered for taxation in the return filed for AY 2015-16. It was also submitted that, the assessee wanted to volunantarily offer the income to tax. Further in letter dated 19/12/2017, the assesse once again expressed that he had inadvertently not offered the capital gain on sale of land at Bhukum for tax and on realizing the mistake he was voluntarily offering the income to tax without being asked anything by the assessing officer in this regard. He filed a revised comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant Section 275 is reproduced here as under : Section 275. (1) No order imposing a penalty under this Chapter shall be passed- (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the 8[Principal Chief Commissioner or] Chief Commissioner or 8[Principal Commissioner or] Commissioner, whichever period expires later : Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of land, construction of Buildings, sale of land for many years through his firms. The Ld.DR further submitted that the Assessee have support of legal experts and CAs. The ld.DR for the Revenue further submitted that only on verification of Bank accounts the Assessing Officer noted the transaction and confronted it to the assessee, then the assessee accepted it. Thus, the claim of the assessee that he voluntarily offered the income is factually incorrect. Ld.DR further submitted that the assessee vide letter dated 05/12/2017 has admitted that the aerial distance is less than 8 km. The Ld.DR opposed the admission of additional evidence. 7. We have heard both the parties and have gone through the orders of the Lower Authorities.It is a fact that during the scrutiny proceedings the AO asked assessee to explain the deposits appearing in the HDFC bank. Vide letter dated 05/12/2017, the assessee accepted the fact of Sale of land, but it was only after the AO had issued a notice dated 27/11/2017. Thus, the so-called act of the assessee offering the Capital gain was not a voluntary act but it was in response to notice issued by the AO. The assessee s claim that he was not aware about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had sold two landed properties at Kalapatti and Dharapuram and the capital gain was worked out for both the properties at Rs. 1,37,31,142/-. However this was not admitted by the assessee in the return of income 14.We have carefully perused the penalty order dated 25-9-2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. The decisions relied on by the assessee were also taken note of and each of the decisions was dealt with. The Assessing Officer placed reliance on the decision of the Hon'ble Supreme Court in Mak Data (P.) Ltd. (supra) and stated that voluntary disclosure does not release the assessee from mischief of penalty proceedings under section 271(1)(c) of the Act. Therefore, we find that the penalty order is a reasoned order. 15. The learned counsel had argued 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be aware of the law and its intricacies. Being a professional, he could not have committed a mistake as was attributed to him. The tax paid is undisputedly an inadmissible expenditure from the profits of the business. Hence this amount should have been statutorily added back. Further, from the computation of income, the assessee added back certain inadmissible expenditure. However, he excluded the amount of income tax paid to the extent of Rs. 48,90,114/-. Thus, the addition was only partial and not full. Unless and until the legal provision then in force permitted exclusion of the amount of income tax already paid, the Chartered Accountant could not have done this. The Chartered Accountant cannot feign ignorance of Section 40(ii) of the Income-tax Act as he is well trained and well versed in law representing not only the assessee, but various other clients. As far as the assessee's malafide intention is concerned, the burden was entirely on the assessee to then show in terms of Explanation-I to the provision permitting imposition of penalty that such intention never existed when the above act was committed. For that, there was no material either in the form of evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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