Kantibhai Tulshibhai Bhadani Vs ITO (ITAT Surat)
The appeal before the Income Tax Appellate Tribunal (ITAT), Surat arose from an order of the Commissioner of Income Tax (Appeals) confirming a penalty of ₹18,41,949 imposed under Section 271(1)(c) of the Income Tax Act for Assessment Year 2014–15. The assessee had originally filed a return declaring income of ₹2,97,370. However, the assessment under Section 143(3) resulted in a total income of ₹91,91,500 after an addition of ₹89,14,121 relating to disallowance of Long Term Capital Gain. Subsequently, penalty proceedings were initiated for alleged furnishing of inaccurate particulars of income.
The assessee challenged the penalty, contending that the notice issued under Section 274 read with Section 271(1)(c) did not specify whether the penalty was for concealment of income or for furnishing inaccurate particulars, as both limbs were mentioned without clarity. It was also argued that there was no concealment, as the assessee had sold agricultural land and was under the belief that such income was not taxable as capital gains. The omission to offer the income was described as a bona fide mistake rather than deliberate concealment. It was further pointed out that the assessee was one of the co-owners of the land and that no addition had been made in the cases of other co-owners.
