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TMI Blog2025 (1) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from the bona fide belief that the offender is not liable to act in the manner prescribed by the statute." The assessee being a regular tax payer, having failed to disclose the Capital gains income in the original return of income has also failed to disclose the same in the return of income filed in response to notice u/s 148 of the Act. This clearly proves that the assessee has an intention to conceal the particulars of income by not disclosing the Capital Gains earned during the relevant year as well as furnished inaccurate particulars of income in both the return of income filed. This default in the hands of the assessee clearly fits into the definition of s.271(1)(c) of the Act for imposing Penalty under this section. 3. The CIT(A) has further held that the facts of the case show that the assessee was under the bonafide belief that there was no tax liability to be discharged by him on account of his residential status, NRE accounts and TDS deductions made by the Abu Dhabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital Gains (STCG) which reached up-to the level of Tribunal. By the order of Tribunal, the assessment was restored back to the file of Ld. AO for re-computation of capital gains since there was error in the computation of STCG. Pursuant to the same, another assessment order was passed on 31-12-2018. The Ld. AO finally determined Short Term Capital Gains of Rs. 40.33 Crores and raised certain demand against the assessee. This assessment has reached finality. 2.2 Against quantum addition, penalty proceedings were initiated against the assessee and the assessee was show-caused. The assessee assailed the same on the ground that the assessee had purchased the shares through Ventura Securities Ltd., Mumbai utilizing the funds lying in the assessee's equity portfolio investment account (NRE Account) which was managed by the Mumbai branch of Abu Dhabi Commercial Bank Ltd. (Bank). The assessee was under the impression that any profit / dividend or other income realized from NRE account would be fully exempt to tax and therefore these transactions were not reflected in the return of income. 2.3 The Ld. AO rejected the explanation on the ground that the fact of gains came to light only fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct income. The Ld. CIT-DR, referred to the decision of Hon'ble High Court of Madras in the case of Gangotri Textiles Limited (276 Taxman 356) as confirmed by Hon'ble Supreme Court (reported as 286 Taxman 357). The Ld. CIT-DR submitted that the above case law is on similar facts and involve imposition of concealment penalty arising out of failure of the assessee to report capital gains through 'inadvertence'. It has further been submitted that the decision of Hindustan Steels Ltd. (supra) as relied upon by Ld. CIT(A) has duly been considered in this decision. The Ld. CIT-DR also referred to the provisions of Sec.191 which, inter-alia, provide that in the case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee directly. Thus, the assessee has defaulted in meeting his statutory liability in reporting correct income and paying correct amount of tax which certainly make him liable for penalty u/s 271(1)(c). The Ld. CIT-DR further submitted that after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income wherein these transactions were not again reflected. The plea of the assessee is that the computation of tax liability on these transactions would lie with the banker managing the equity portfolio. This argument is liable to be rejected at its threshold since the banker is not an authority to compute the final tax liability of the assessee. The role of remitter banker is simply to follow the extant procedure and to deduct Tax at source as prescribed under the statute. The banker has deducted TDS of Rs. 353.33 Lacs as against final tax liability of Rs. 479.08 Lacs. It could be seen that the final tax liability has been determined after series of litigation. The assessee has earned Long Term Capital Gains as well as Short Term Capital Gains (STCG) on these transactions. Initially, an assessment was framed wherein STCG was computed at Rs. 52.10 Crores raising tax demand of Rs. 479.08 Lacs. However, the order was rectified and the STCG were recomputed and corresponding tax demand was reduced to Rs. 283.75 Lacs in rectification order passed u/s 154 on 31-03-2016. The matter reached up-to Tribunal wherein the matter was restored back to the file of Ld. AO for re-computation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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