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Facts
The assessee declared a total income of Rs. 2,97,370/- for AY 2014-15. The Assessing Officer determined the total income at Rs.91,91,500/- with an addition for Long Term Capital Gain. Penalty proceedings under section 271(1)(c) were initiated, and a penalty of Rs.18,41,949/- was imposed for furnishing inaccurate particulars.
Held
The Tribunal held that the notice issued under section 274 r.w.s. 271(1)(c) was vague as it did not specify whether the penalty was for concealment of particulars or furnishing inaccurate particulars. Furthermore, the Tribunal noted that the assessee genuinely believed the sale of agricultural land was tax-neutral and that other co-owners in a similar situation did not face additions.
Key Issues
Whether the penalty levied under section 271(1)(c) is valid when the show cause notice is vague and whether the assessee's belief about taxability of agricultural land sale constitutes concealment or furnishing inaccurate particulars.
Sections Cited
271(1)(c), 274, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: DR. BRR Kumar & Ms. Suchitra Kamble
IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT Before: DR. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member
ITA No: 363/SRT/2025 Assessment Year: 2014-15
Kantibhai Tulshibhai The ITO Bhadani Ward-3(2)(4), 32, Madhavkunj Society, Vs Surat Nr. Govindji Hall, Dabholi Road, Surat Surat-395004, Gujarat PAN: AMHPB5472A (Respondent) (Appellant) Assessee Represented: Shri Rasesh Shah, CA Revenue Represented: Shri Ajay Uke, Sr. D.R.
Date of hearing : 22-01-2026 Date of pronouncement : 06-04-2026 आदेश/ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:-
This appeal is filed by the Assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), on 21-01-2025 for Assessment Year 2014-15.
The assessee has raised the following grounds of appeal: 1 On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of the assessing officer in levying penalty of Rs.18,41,949/- u/s. 271(1)(c).
I.T.A No. 363/Srt/2025 A.Y. 2014-15 2 Kantibhai Tulsibhai Bhadani Vs. ITO
2 It is therefore prayed that the penalty levied by the assessing officer may please be deleted 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.
The assessee filed Return of Income for Asst. Year 2014-15 on 31-03-2015 declaring total income of Rs.2,97,370/-. The assessment order u/s. 143(3) of the Act was passed on 13-12-2016 determining total income at Rs.91,91,500/- with addition of Rs.89,14,121/- in respect of disallowance under Long Term Capital Gain. Penalty proceedings u/s. 271(1)(c) of the Act were initiated for furnishing inaccurate particulars of income thereby concealment of income. In respect of u/s. 274 r.w.s. 271(1)(c) of the Act dated 13-12-2016 was issued and served to the assessee. The Assessing Officer after taking on record, the reply of the assesse imposed penalty of Rs.18,41,949/- u/s. 271(1)(c) of the Act in respect of furnishing inaccurate particulars.
Being aggrieved by the penalty order, the assessee filed appeal before Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee.
The Ld. A.R. submitted that notice u/s. 271(1)(c) r.w.s. 274 of the Act has not mentioned under which the penalty will be imposed on the assessee as both the limbs of Section 271(1)(c) of the Act were mentioned and no specific charge was made out in the notice u/s. 274 r.w.s. 271(1)(c) of the Act. Besides this, the Ld. A.R. submitted that there was no concealment of income or furnishing of inaccurate particulars as the assesse has sold agricultural land and was under the impression that the same is tax neutral. Besides this, the assessee has not offered the said income for Long Term Capital Gain. Thus merely having a second opinion cannot be treated as concealment of income or furnishing of inaccurate particulars.
The Ld. D.R. relied upon the assessment order in the order of the Ld. CIT(A).
I.T.A No. 363/Srt/2025 A.Y. 2014-15 3 Kantibhai Tulsibhai Bhadani Vs. ITO
We have heard both the parties and perused the relevant materials available on record. It is pertinent to note that notice issued u/s. 274 r.w.s. 271(1)(c) dated 13- 12-2016 has not given the details as relates to whether the penalty will be imposed for concealment of particulars of income or furnishing inaccurate particulars of such income. Thus the decision of the Hon’ble Apex Court in the case of CIT vs. M/s. SSA’s Emerald Meadows (CC No. 11485/2016 order dated 05.08.2016) emerging from Karnataka High Court decision in case of CIT vs. Manjunatha Cotton & Ginning Factory order dated 23-11-2015. Besides this, the assessee has given all the details and in fact has not offered Long Term Capital Gain in light of the land sold where the assessee is one of the co-owners. The assesse was under impression that the same should have not been offered for Long Term Capital Gain and hence it is merely a mistake on the part of the assessee as the land he sold is an agricultural land and was under impression that the same amount to agriculture income. The assessee is one of the co-owners and in fact and other co-owners case, the Assessing Officer has not made any addition. Therefore the question of concealment of income or furnishing of inaccurate particulars of income does not arise in present assessee’s case.
In the result, the appeal of the Assessee is allowed.
Order pronounced in the open court on 06 -04-2026
Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) VICE PRESIDENT True Copy JUDICIAL MEMBER Ahmedabad : Dated 06/04/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue
I.T.A No. 363/Srt/2025 A.Y. 2014-15 4 Kantibhai Tulsibhai Bhadani Vs. ITO 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत