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TMI Blog2023 (4) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a particular amount assessed as income in the hand the assessee. As in case on hand the assessee in the original return of income filed under section 139 of the Act claimed exempted long-term capital which has been withdrawn in the return filed in response to notice under section 148 of the Act and due taxes on the same was deposited. The returned income was accepted by the Revenue in the assessment order finalized under section 143(3) r.w.s. 147 of the Act without being any further addition/disallowance. As relying on Kulwant Singh case [ 2019 (4) TMI 1287 - ITAT CHANDIGARH ] we set aside the finding of the learned CIT(A) and direct the AO to delete the penalty levied by him under the provisions of section 271(1)(c) - Decided in favour of assessee. - ITA No. 356/AHD/2022 - - - Dated:- 6-4-2023 - Shri Waseem Ahmed, Accountant Member For the Assessee : Shri Soham U Mashruwala, A.R For the Revenue : Shri SanjayKumar, Sr. D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals), Ahmedabad, dated 14/07/2022 arising in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brief are that assessee in the present case is an individual. The assessee filed his return of income under section 139 of the Act dated 29.03.2014 declaring an income of ₹ 1,30,000/- only. The assessee in the return of income has shown long-term capital gain of ₹ 6,23,680/- which was claimed as exempted under section 10(38) of the Income tax Act 1961. 4.1 However, subsequently case of the assessee was reopened under income escaping assessment on the reasoning that the information form DDIT(Inv.) Unit- 2(3) Kolkata was received regarding assessee being one of the beneficiaries of bogus long term capital racket in penny stock. The assessee in response to such notice under section 148 of the Act, filed his return of income dated 30.06.2020 by treating the so-called long-term capital gain which was claimed as exempted under section 10(38) of the Act as income from other sources. As such the assessee has declared an income of Rs. 7,53,680/- in the return filed under section 148 of the Act which was accepted as it is by the revenue in the assessment framed under section 147 read with section 143(3) of the Act. Nevertheless, the AO was of the view that the income from oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 271(1)(c) of the Act. In other words, the penalty proceedings being separate and independent, the assessee should be provided enough opportunity for his rebuttal on the allegations raised by the revenue. In simple words, the basis adopted during the assessment proceedings cannot be used in the penalty proceedings without following the due process. As such, to levy penalty under section 271(1)(c) of the Act, the revenue has to reach to unambiguous finding that the income assessed in the hand of the assessee represent actual income which has been either concealed or inaccurate particular has been furnished with regard to such income. In holding so, we draw support and guidance from the judgment of Hon ble Gujarat High Court in the case of National Textiles vs. CIT reported in 249 ITR 125, the Hon ble Gujarat High Court has held as under: In order to justify the levy of penalty, 2 factors must co-exist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee s income. It is not enough for the purpose of penalty that the amount has been assessed as income and (ii) the circumstances must show that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized under section 143(3) r.w.s. 147 of the Act without being any further addition/disallowances. Thus, question arises whether in such facts and circumstances penalty under section 271(1)(c) of the Act can be levied. The question has been answered by the coordinate bench of Chandigarh Tribunal in case of DCIT vs. Kulwant Sing reported in 104 taxmann.com 40 wherein it was held as under: 16. A perusal of the above referred to section 271(1)(c) of the Act reveals that there are two parts of this section. The first part speaks about the charge which may invite penalty i.e. a person has concealed ' particulars ' of his income or furnished inaccurate particulars of income, he may be directed to pay certain sum by way of penalty as penalty. Now, the second part speaks about the quantum of amount payable. As per clause (iii), the Assessing officer may direct such a person against whom the above charge is established to pay in addition to the tax, if any, payable a sum which is not less than, but which shall not exceed three times, the amount of tax sought to the evaded by a reason of such concealment of particulars of income or furnishing of inaccurate particulars of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income assessed but reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice u/s 148 of the Act. As per the above said provision what is material is the evasion of the tax and in that scenario, if a person does not file a return and, hence, does not disclose his particulars of income and meaning thereby concealed his particulars of income but if he before the issuance of notice for the reopening of the assessment u/s 148 of the Act, had deposited due taxes and the resultant addition after assessment does not create any liability to pay any further tax, there will be no tax sought to be evaded. 19. Now coming to the relevant clause (c) to Explanation 4, which is residuary clause which speaks that in any other case, the difference between the total income assessed and the tax that would have been chargeable, had such total income been reduced by the amount of income in respect of which particulars have been concealed which means that the tax payable on the income in respect of which particulars have been concealed or inaccurate particulars of income furnished. 20. A collective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of which particulars have been concealed. In a case, however, where on setting off the concealed income against any loss incurred by the assessee under other head of income or brought forward from earlier years, the total income is reduced to a figure lower than the concealed income or even to a minus figure, 'the tax sought to be evaded' will mean the tax chargeable on the concealed income as if it were the total income. Another exception to the general definition of the expression 'tax sought to be evaded' given earlier is a case to which Explanation 3 applies. Here, the tax sought to be evaded will be the tax chargeable on the entire total income assessed. 21. Even in the Explanation 1, what is relevant is any fact material to computation of total income of any person regarding which such person fails to offer an ' Explanation ' or Explanation which is found to be false by the Income-tax authorities or an Explanation which is not able to substantiate, then, the amount added or disallowed in computing total income of such person as a result thereof deemed to represent the income in respect of which particulars have been concealed. So, firstl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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