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Facts
The Revenue appealed against the deletion of penalty imposed under Section 271(1)(c) for AY 2012-13. The penalty was levied on income offered by the assessee as capital gain from the sale of land. The assessee initially declared income, but later disclosed a higher amount as capital gain after an investigation report flagged a suspicious transaction.
Held
The Tribunal held that no penalty could be levied in this case because the assessee had already disclosed the capital gain in the return of income, which was accepted by the AO without any disallowance. The penalty proceedings were initiated after the assessment was completed, and no inaccurate particulars were found.
Key Issues
Whether penalty under Section 271(1)(c) can be levied when the assessee has voluntarily disclosed the income in the return of income and the AO has accepted it without disallowance, and the penalty proceedings were initiated post-assessment.
Sections Cited
271(1)(c), 139, 139(4), 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the Revenue against order dated 17/04/2024 passed by NFAC, Delhi in relation to penalty proceedings u/s. 271(1)(c). 2. The Revenue is aggrieved by deletion of penalty of Rs.3,00,58,858/- which was levied by the ld. AO on the income offered by the assessee in the return of income filed u/s.139(4).
Dayanand Damodar Patil 3. The brief facts are that assessee has filed return of income for A.Y.2012-13 on 24/02/2014 declaring income of Rs.3,09,82,840/-. In this case a suspicious transaction report has been received from the FIU- INDIA regarding verification of the genuineness of high value transaction made in the saving bank account. On perusal of bank account, it was found that the account was credited through cheques from the account of individuals and debited to the account of individual through transfers. Total credits were made of Rs 5,62,62,500/- In response, the assessee submitted that he had sold a agricultural land at village Walve, Palghar, on 31/10/2011. During the course of investigation, it was found that land was non- agricultural land. Thereafter, the assessee offered Rs.3 Crores out of total consideration of Rs. 5.62 Crores received for sale of land over as capital gain in his regular return of income for the A.Y.2012-13.
In the assessment order, ld. AO held that Investigation Wing of the Income Tax department detected certain transaction of sale of land undertaken by the assessee and it is only after the detection by the investigation wing, assessee has disclosed said transaction and filed return of income on 24/02/2014. Even though he has accepted the return, he has initiated penalty u/s. 271(1) (c) on the declaration of capital gain on sale of land in the return of income.
5. From the perusal of the records it is seen that, even though assessee has filed its return of income on 24/03/2024, however, Dayanand Damodar Patil assessee’s case was selected for scrutiny and notice u/s.143(2) was issued on 02/09/2014 that is much after the disclosure in the return of income. In the assessment order return of income filed on 02/09/2014 and the income offered as short term capital gain on sale of land has been accepted and there is no disallowance or any adverse drawn by the ld. AO with regard to disclosure of short term capital gain. Only addition which has been added by the ld. AO is in respect to adhoc disallowance of expenses and disallowance on account of depreciation. No way, the ld. AO has found that assessee has furnished any inaccurate particulars of income during the course of assessment proceedings. It is also not brought on record that it is only the enquiry conducted by the Investigation department which prompted assessee to offer short term capital gain but the fact of the matter is that assessee had short term capital gain in the return filed u/s.139 which has been accepted by the ld. AO. Thus in such a case, no penalty can be levied. Accordingly, the ld. CIT(A) has rightly deleted the penalty.
In the result, appeal of the Revenue is dismissed.
Order pronounced on 28th February, 2025.