SHRI KAMLA BHATT,DEHRADUN vs. ITO, DEHRADUN

ORDER

PER BEENA A PILLAI, JUDICIAL MEMBER

ITA 5554/Del/2015 A.Y. 2011-12 Mrs Kamla Bhatt vs. ITO That in the facts and circumstances of the case, the appellant has not 4. acted dishonestly or with any malafide intention to conceal her income or furnish inaccurate particulars of income. The imposition of penalty is unfair. That in facts and circumstances of the case, CIT(A) has not undergone 5. the complete reply while confirming the penalty but has quoted a distinguishable case while confirming the order, the same is bad at law. That in facts and circumstances of the case, the AO and the learned OT 6. (A) has not given a correct finding whether the assessee had concealed his income or furnished inaccurate particulars for which he is being penalized. That in facts and circumstances of the case, the ITO has recorded his 7. satisfaction for concealment of income whereas he has imposed the penalty on different charge i.e. furnishing inaccurate particulars of her income and to save his skin, in confusing mind he has added and has concealed her income in the penalty order. The same is bad at law and illegal. That the imposition of the penalty of Rs. 26,00,000/- as sustained by 8. the Id. CIT(A) may please be deleted. That in fact and circumstance of the case, appellant be permitted to 9. add or delete any grounds of appeal

.”

2. Brief facts of the case are as under: Assessee for the year under consideration had filed its original return declaring income of Rs. 2,22,513/-being interest earned on fixed deposits with bank. Subsequently Assessing Officer came in possession of information from Registrar of Properties, Dehradun that assessee had sold a property for Rs.1.55 crores during the year under consideration. Ld.AO observed that assessee has not declared capital gains on such sale in original return of income. Ld.AO accordingly issued notice under section 148 of the Income Tax Act,1961 (hereinafter referred to as "the Act") on 18/02/14. In compliance to the notice issued, assessee submitted return of income on 27/03/14 declaring income of Rs.1,26,68,090/-. Ld.A.O. thereafter issued notice under section 2 ITA 5554/Del/2015 A.Y. 2011-12 Mrs Kamla Bhatt vs. ITO 143(2) and 142(1) of the Act, in response to which representative of assessee appeared before Ld.AO and furnished written submissions. Based upon such submissions made by assessee, Ld.A.O. completed assessment at total income of Rs.1,26,68,090/-. Ld.AO also initiated penalty proceedings for concealment of income, on the ground that, assessee had not declared long term capital gain initially but disclosed the same after receipt of notice under section 148 of the Act.

3. During penalty proceedings, assessee submitted vide reply dated 09/05/2014, that it was upon advice received by her from her Counsel, based upon which she deposited entire sale proceeds in bank as fixed deposits. State Bank of India, Dehradun branch accordingly had issued fixed deposit receipts of Rs.1,50,00,000/-on 17/01/11. It has been submitted before Ld. AO during penalty proceedings in reply itself that upon receipt of notice under section 148 of the Act assessee contacted her advisor professional, who then suggested her to pay the long term capital gain tax because she had not deposited the said amount with the bank under special scheme which was notified by Central Government. Assessee thereafter paid the taxes. 3.1. Ld. AO however rejected assessee’s submissions and levied penalty for concealment of income.

4. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT(A) who upheld penalty levied by Ld.A.O.

5. Aggrieved by order of Ld.CIT(A) assessee is in appeal before us now.

6. Ld.Counsel submitted that assessee never intended to conceal any particulars of income and it was a bonafide mistake ITA 5554/Del/2015 A.Y. 2011-12 Mrs Kamla Bhatt vs. ITO on behalf of assessee due to mis-guidance by her adviser Professional. He submitted that, upon realising the mistake assessee was immediately asked to rectify the same, by paying taxes on sale proceeds. It has been submitted that admittedly tax was paid subsequent to receipt of notice under section 147 of the Act, however, he submitted that it does not amount to concealment under section 271(1)(c) of the Act. Ld.Counsel submitted that merely because taxes and interest thereon were paid subsequent to receipt of notice under section 147 of the Act, it cannot be inferred that, there was concealment on behalf of assessee, as explanation offered by assessee was bona fide.

7. On the contrary Ld.Sr.DR submitted that had notice under section 147 of the Act not been issued to assessee, taxes would not have been paid on sale proceeds. It definitely amounts to concealment of income as return of income originally filed by assessee did not reveal capital gains earned by assessee upon sale of property. He supported the order passed by authorities below in levying penalty.

by assessee.

10. In the result appeal filed by assessee stands allowed. Order pronounced in the Open Court on 14/09/2018.