JAGAT SINGH,NOIDA vs. ITO, NOIDA

The Assessee has filed these two appeals against the separate impugned Orders both dated 15.9.2016 of Ld. CIT(A)-I, Noida pertaining to assessment year 2007-08. 2. The ground raised in the Assessee’s appeal No. 5851/Del/16 (AY 2007-08) reads as under:-

1. That on the facts of the case and under the law, the impugned penalty order is bad.

2. That the ld CIT(A) had denied natural justice to the appellant.

3. That the ld ClT(A) had proceeded to dismiss the appeal , on the incorrect finding that the appellant had not contested the addition made and thus the assessment order had become final. (the appeal against the assessment order was pending as on that date). 4. That on the facts of the case an under the law, the penalty order passed u/s 271(1)(c) is liable to be quashed / annulled, because the "charge" was not specific. The ld. A.O. had initiated penalty proceedings vide notice dt. 27.03.2015 issued u/s 274 r.w.s. 271, by simply placing tick mark against the' printed line" you have concealed the particulars of income or furnish inaccurate particulars of such Income .

5. That on the facts of the case and under the law, the ld

CIT(A) had erred in confirming the penalty order passed by the ld A.O u/s 271(1)(c) without appreciating that though there was no reference of Explanation -1 of sec. 271 (1 ) (c) in the Show Cause Notice issued, yet the ld A.O. had levied penalty u/s 27 1 (l)(c) by invoking Explanation- 1 of sec. 271

(l)( c).

ClT(A) had erred in confirming the penalty order passed by the ld A.O. u/s 271 (l)( c), without appreciating that the penalty u/s 271(1)(c) is not leviable / sustainable because it was a case of application of deeming provision - sec. 50C.

Note:- The appellant craves leave to amend / modify any of these grounds of appeal and/ or to raise additional ground(s) of appeal. 3. The ground raised in the Assessee’s appeal No. 5852/Del/16 (AY 2007-08) reads as under:-

1. That on the facts of the case and under the law, the impugned penalty order is bad.

2. That the Ld. CIT(A) has denied natural justice to the appellant.

3. That on the facts of the case and under the law, the penalty order passed u/s. 271(1)(b) is liable to be quashed/ annulled, because the “charge” was not specific. The Ld. AO had initiated penalty proceedings vide

notice dated 27.3.2015 issued u/s. 274 r.w.s. 271, by simply placing tick mark against the printed line “you have without reasonable failed to comply with a notice u/s. 23(4)/ 23(2) of the Indian Income Tax Act, 1922 or u/s. 142(1)/143(2) of the I.T. Act, 1961 dated………” 4. That on the facts of the case and under the law, the penalty u/s. 271(1)(b) was not leviable.

because no specific date of non compliance was mentioned. 6. That on the facts o f the case and under the law, the penalty levied u/s. 271(1)(b) is liable to be deleted, because the non compliance was unintentional, as the assessee’s father (who used to look after the matters relating to income tax and follow up with the professional) was terminally ill due to cancer during such period and the ultimately died on 30.5.2015.

Note:- The appellant craves leave to amend / modify any of these grounds of appeal and/ or to raise additional ground(s) of appeal.

AO observed that the land sold was capital asset within the meaning of section 2(14) of the I.T. Act, 1961 on which long term capital gains were chargeable to tax. But neither the assessee filed return of income in response to notice u/s. 148 nor furnished any details as required vide notices issued under section 142(1) and 144 of the I.T. Act, 1961. Accordingly, the AO worked out the taxable capital gain at Rs. 31,63,066/- in which the share of the assessee was determined at Rs. 6,32,613/- and by considering the income declared in return of income dated 27.3.2008 the total income of the assessee was determined at Rs. 7,14,783/-. The AO, thereafter, imposed penalty u/s 271(l)(c) of the Act by observing that as per Explanation-1 of Section 271(1) of the Act the assessee has failed to offer any explanation vide his order dated 29.9.2015. Aggrieved by order of the AO, the Assessee filed the appeal before the Ld. CIT(A), who vide his impugned order dated 15.9.2016 has upheld the action of the AO of imposing the penalty.

5. Now the Assessee is aggrieved against the impugned order and filed the present appeal before the Tribunal.

6. At the threshold, Ld. Counsel of the Assessee has stated that the issues involved in the present appeal are squarely covered by the ITAT, ‘D’ Bench, Mumbai decision dated 22.12.2010 passed in (AY 2006-07) in the case of Renu Hingorani vs. ACIT, Mumbai. In this behalf, he filed the copy of the said decision and requested that by following the same reasoning, the penalty in dispute may be deleted and accordingly, the appeal of the assessee may be allowed.

addition of Rs. 9,00,824/- being difference between the sale consideration as per sale agreement and the valuation made by the Stamp Valuation Authority.

Thus, the addition has been made by the AO by applying the provisions of section 50C of the Act. It is evident from the assessment order that the AO has not questioned the actual consideration received by the assessee provisions of the Income Tax Act, 1961. The AO has not given any finding that the actual sale consideration is more than the sale consideration admitted and mentioned in the income or furnishing inaccurate particulars of income. It is also not the case of the revenue that the assessee has failed to furnish the relevant record as called by the AO to disclose the primary facts. The assessee has furnished all the relevant facts, documents/ material including the sale agreement and the AO has not doubted the genuineness and validity of the documents produced before him and the sale consideration received by the assessee. Under these facts and circumstances, it cannot be said that the assessee has not furnished correct particulars of income. Merely because the by the Stamp Valuation Authority would not be a conclusive assessee agreed for addition on the basis of valuation made proof that the sale consideration as per this agreement was incorrect and wrong.

Accordingly the addition because of the deeming provisions does not ipso facto attract the penalty u/s 271(1)(c). Hence in view of the decision of the Hon'ble

Supreme Court in the case of CIT Vis Reliance Petroproducts Pvt.Ltd (supra), the penalty levied u/s 271(1)( c) is not sustainable. The same is deleted.

9. The appeal of the assessee is allowed.”