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TMI Blog2022 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... the present facts and circumstances of the case we are of the view that concealment of income is quite different from furnishing of inaccurate particulars of income. No hesitation on this point to delete the penalty and the addition made. In support, reliance was placed on the judgments referred by the AO and CIT(A) without appreciating that facts of the case are on different facts than that the assessee s case where the assessee not only provided explanation regarding the source of amount but also explained the reasons for its claim as exempt when the assessee came to know about error in return as per advice of erstwhile tax consultant and the assessee deposited the tax amount along with interest due u/s 234B 234D. CIT(A) and the AO impose the penalty is unjustifiable. Reliance was placed on the judgments in case of CIT vs. reliance Petrochemicals Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT ] and in case of M/s Rane Industries Pvt. Ltd. [ 2022 (6) TMI 1298 - ITAT PUNE] where the assessee s case is similar and identical where no hesitation to delete the penalty by following precedents where the excess claim of deduction was due to bona fide and unintentional mistake. Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from salaries, house property, capital loss and income from other sources. Subsequently, Re-assessment proceedings were initiated u/s 147 of the Act vide notice dated 13.10.2014 u/s 148 of the Income Tax Act. It would not be out of place to mention here that during the year under appeal, assessee was employed with a company at Jaipur till July 2011 and thereafter joined a company at Ahmedabad. In order to attract him, new employer at Ahmedabad (M/s Adani Wilmar Limited), offered assessee one time allowance of Rs. 21,00,000/- to compensate him equivalent to shares of old company which were due to be allotted to assessee. Sum so paid, was termed as Special Allowance in Form 16 of assessee. At the time of filing original return of Income, tax consultant of the assessee was of the view that sum of Rs.21,00,000/- was a capital receipt and thus was not liable for taxation. On the basis of such advice, in good faith, assessee filed the return of Income, wherein such receipt was claimed as capital receipt not chargeable to tax. 4. Subsequently, in response to notice issued u/s 148 also, assessee furnished Return of Income declaring same income as declared in the return filed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,43,584/- Net Taxable salary income Rs. 59,24,484/- Rounded off Rs. 59,24,480/- Loss from LTCG of Rs. 18,03,526/- allowed to be carry forward Assessed u/s 143(3)/148 at Rs. 59,24,480/-. Issue demand notice and challan. Charge interest u/s 234 of the I.T. Act, 1961. Prepare ITNS-150 which enclosed with this order. Issue penalty notice u/s 271(1)(c) r.w.s. 274 of the Income-tax Act, 1961 for concealing particulars of income and furnishing of inaccurate particulars of income. 6. Being aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee has reiterated its arguments. The ld. CIT(A) for the reasons stated in his order has rejected the arguments and submissions made by the assessee. 7. In first appeal the CIT(A) has confirmed the action of the AO by observing as under:- On perusal of penalty order it is observed that the AO clearly mentioned in his speaking order that the assessee has contended that the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings - Presumption of concealment of income not rebutted -Levy of penalty valid - Income Tax Act, 1961, s. 271(1)(c). 271(1)(c) COMMISSIONER OF INCOME-TAX v. MAHABIR PRASAD BAJAJ, [2008]298 ITR 109 (JHARKHAND) Penalty-Concealment of Income-Incriminating documents found during search-Contention by assessee that -Revised return accepted -Revised return filed not voluntarily but owing to search and seizure- Levy of penalty proper Income tax Act, 1961, .271(1)(c). 271(1)(c) CIT V. HANDLOOM EMPORIUM [2006]282 ITR 431 (ALL.) Penalty u/s. 271(1)(c) is applicable even when concealment of income is admitted by filing a revised return after detection of concealment. During the appellate stage the appellant given explanation about the claim of exemption of Rs. 21,00,000/- and subsequent withdrawing the claim of exemption which was simultaneously supported by the payment of tax along with due interest, has been accepted by the AO during reassessment proceedings. In support of the above explanation the appellant relied upon the various judicial decisions, which is found not relevant in this case. In view of the above facts and circumstances the observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing inaccurate particulars of income. Hon'ble Karnataka High Court in the case of Commissioner of Income Tax vs. Manjunatha Cotton And Ginning Factory (2013) 359 ITR 565, has held that the notice issued by the Assessing Officer under section 274 r.w.s. 271(1)(c) of the Act as bad in law as it does not specify as to under which limb of section 271(1)(c) of the Act the penalty has been initiated. Similar view is pressed in following case laws: In CIT Vs. SSA'S Emerald Meadows ITA No. 380/2015 decided by hon'ble Karnataka H/C, SLP of the department was also dismissed by Hon'ble Supreme Court, as reported in [2016] 73 taxmann.com 248 (SC). 396 ITR 398 Muninaga Reddy Vs. ACIT (Karnatka) S. Chandra Shekhar Vs. ACIT 396 ITR 538 (Karn.) M/s. Sai Venkata Construction Vs. Addl. CIT (ITA Nos. 994 995/2013, order dated 11.03.2016) (Pune ITAT) Sanjog Tarachand Lodha Vs. ITO (ITA Nos. 688 and 689/PN/2014 order dated 31-082015 ) (Pune ITAT) Sanghavi Savla Commodity Brokers P. Ltd. Vs. ACIT (ITA No.1746/Mum/2011, order dated 22.12.2015) (ITAT Mumbai) Shri Deepak Kumar Patwari Vs. ACIT (ITA Nos. 616 to 618/Kol/2013 order dated 03.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.AO is not in accordance with law, therefore penalty proceedings initiated vide re assessment order deserves to be deleted in toto. It is further submitted that exemption of Rs.21,00,000/- was claimed by assessee on the basis of expert advice of tax professional on the issue, which eventually turned out to be not in accordance with law. In fact, no sooner it came to the knowledge of assessee that exemption was claimed incorrectly, assessee suo-moto withdrew the claim and paid due taxes along with interest amount. Your goodself would appreciate that assessee is not well versed with complicated provisions of taxation and acted in good faith on the advice of Tax Consultant, therefore assessee should not be penalized. In this regard reliance is placed on the judgement of Hon'ble Apex Court in the case of M/s Price Waterhouse Coopers Pvt. Ltd. v/s Commissioner of Income Tax, Kolkata-I reported in 348 ITR 306 dated 25.09.2012, wherein it has been held as under: 17. Having heard learned counsel for the parties, we are of the view that the facts of the case are rather peculiar and somewhat unique. The assessee is undoubtedly a reputed firm and has great expertise avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is accepted then in case of every Return where the claim made is not accepted by the AO for any reason, the assessee will not invite penalty u/s 271(1)(c). Recently, Hon'ble Pune Bench of ITAT in its decision dated 13.06.2022 in the case of M/s Rane Industries Pvt. Ltd. in ITA No. 555/PUN/2020, relying upon the decision of Hon'ble Apex Court in case of Price Water house coopers (supra) has held as under (copy enclosed) : 3. We have heard the rival contentions and gone through the relevant material on record. It is apparent from the assessment order itself that the assessee, when pointed out by the AO, admitted its inadvertent mistake in not adding back the above amounts totaling to Rs. 78.26 lacs in the computation of total income, which were debited to the Profit Loss account. It is clear from the nature of the amounts and the way of their depiction thereof in the Profit Loss account that the assessee inadvertently committed a mistake in not adding back the amount of income tax, etc. paid by it in the accepted the disallowance and paid due tax thereon. It is not a case where the assessee tried to mislead the Revenue by intentionally claiming higher amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/HYD/2014 (Hyderabad ITAT) - CIT Vs Ms. Sania Mirza in I.T.T.A. No. 526 of 2011reported in All High Courts (5353) Andhra Pradesh HC (84) It is further submitted that ld. CIT (A) has brushed aside the submission and case laws relied upon without assigning any reason. In fact, case CIT(A) placed reliance on the judgments referred by Id. AO without appreciating that facts of the same are on different facts than that of assessee's case which is summarized as under: S.No Judgement Referred Facts of Judgment Referred Facts of Assessee Case 1. Kamal Chand Jain v. ITO (2005) 277 ITR 429 (Del) Assessee was unable to offer explanation of Source of amount and surrendered the amount submitting a letter stating that he was not aware of tax affairs. Assessee not only provided the explanation regarding source of amount but also explained the reason for its claim as exempt and later on, once assessee came to know about error in return as per advice of erstwhile tax consultant assessee deposited the tax amount along with interest due u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex court in the case of Eilly Lilly Company reported in 312 ITR 225 has held that the penalty proceedings is not an automatic or mandatory fallout of the addition made during the assessment proceedings, therefore, the same should not be levied in routine manner. Thus it is humbly prayed that error while filing return of income u/s 139(1) of the Act isabsolutely inadvertent and was rectified as soon the same came to the notice of assessee, it is therefore, requested that penalty 6,48,900/- levied u/s271(1)(c) of the Income Tax Act may please be deleted. In support reliance was placed on the decision in case of M/s Rane Industries Pvt. Ltd vs. DCIT in ITA No. 555/PUN/2020 vide order dated 13.06.2022. 9. On the other hand, the ld. DR supported the order of the lower authorities. 10. We have heard both the parties, perused materials available on record. We observed that all grounds which are interconnected. During the course of assessment proceedings, the assessee submitted that he has derived income of Rs. 44,53,415/- as salary and loss of Rs. 22,51,000/- under the head capital gain and Rs. 21,990/- under the head income from other sources taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee as Rs. 44,53,415/- shown by him in his return of income filed for the assessment year 2012-13 as escaped income. We observed that the exemption of Rs. 21,00,000/- was claimed by the assessee on the basis of expert advice of tax professional regarding the special allowance. During the course of reassessment proceedings when the assessee came to known that the exemption was claimed incorrectly the assessee himself withdrew the claim and paid due taxes along with interest amount. We also observed that the ld. CIT(A) has recorded the written submissions filed by the assessee during the appellate proceedings which is considered carefully and but in holding the finding of the AO is unjustified. Going through the present facts and circumstances of the case we are of the view that concealment of income is quite different from furnishing of inaccurate particulars of income. We do not have any hesitation on this point to delete the penalty and the addition made. In support, reliance was placed on the judgments referred by the ld. AO and ld. CIT(A) without appreciating that facts of the case are on different facts than that the assessee s case where the assessee not only provided explan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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