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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-5, Chennai, dated 01.11.2016, for assessment year 2012-13, confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').
Shri R. Padmanabhan, the Ld. representative for the assessee, submitted that on the basis of Annual Information
Report, it was found that there was capital gain on sale of property at Jalore, Rajasthan. According to the Ld. representative, the property itself was sold for `6,00,000/-. However, the Assessing
Officer computed the capital gain at `8,09,935/- on the basis of the guideline value under Section 50C of the Act. The main contention of the assessee before this Tribunal is that for the purpose of levying penalty, the notional value adopted under Section 50C of the Act cannot be a basis. The Ld. representative further submitted that the assessee inadvertently omitted to offer the capital gain for taxation, but the moment it was brought to the notice of the assessee, the assessee accepted the same and paid the taxes, therefore, levy of penalty under Section 271(1)(c) is not called for. The Ld. representative further submitted that a similarly interest income was also offered for taxation. Hence, the CIT(Appeals) is not justified in confirming the penalty levied by the Assessing Officer.
On the contrary, Smt. Thirupurasundari, the Ld. Departmental Representative, submitted that the assessee has not disclosed the capital gain on sale of land at Jalore, Rajasthan. On the basis of AIR received by the Assessing Officer, the same was brought for taxation after giving a copy to the assessee. Even though the total consideration of property is `6,00,000/-, the value was taken at `11,41,200/- on the basis of the valuation adopted by the registration authorities under Section 50C of the Act. Therefore, the Assessing Officer has levied the minimum penalty of `1,84,576/- which was rightly confirmed by the CIT(Appeals).
We have considered the rival submissions on either side and perused the relevant material available on record. The assessee had not offered the interest income of `57,386/- and capital gain on sale of property at Jalore, Rajasthan. When it was brought to the notice of the assessee by the Assessing Officer, the assessee admitted and accepted the same and paid the tax. The question arises for consideration is whether the assessee concealed any part of his income or furnished inaccurate particulars of income for the purpose of levying penalty under Section 271(1)(c) of the Act. The Apex Court in Price Waterhouse Coopers Pvt. Ltd. v. CIT (2012)
348 ITR 306 examined an identical issue. The Apex Court found that to err is human. The moment it was brought to the notice of the assessee, he accepted and paid taxes without any hesitation.
Therefore, in such a situation, levy of penalty under Section 271(1)(c) of the Act is not justified.
Moreover, the total sale consideration was only `6,00,000/- 5. as per the document, which is not disputed. The notional value adopted by the Assessing Officer under Section 50C of the Act cannot be a basis for levy of penalty under Section 271(1)(c) of the Act. The notional value is adopted only for the purpose of computing income-tax on the sale of property. This value cannot be considered to be concealed by the assessee. When the assessee admittedly received `6,00,000/- as sale consideration, for the purpose of levy of penalty, the same has to be considered. Had there been any material to indicate that the assessee has received over and above the sale consideration disclosed in the sale deed, the matter would stand differently. In this case, there is no material or not even whisper that the assessee has received any money over and above the sale consideration disclosed. In those circumstances, this Tribunal is of the considered opinion that the levy of penalty is not justified. Therefore, we are unable to uphold the order of the lower authority. Accordingly, orders of both the lower authorities are set aside and the penalty levied by the Assessing Officer to the extent of `1,84,576/- is deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 29th June, 2017 at Chennai.