Penalty cannot be levied on the basis of deeming provision

2. The assessee was owner of agricultural land at Adajan Gaon along with eight other co-owners. During the year the land was sold for a total consideration of Rs.36 lacs and the assessee in the original return of income filed u/s 139(1) on 31.5.2006 offered capital gains by taking the sales consideration at Rs.4,50,000 (being his share in the said land). Thereafter a notice u/s 148 was issued on the assessee on 8.2.2008 on the ground that in the original return of income the sales consideration of the aforesaid land was not offered as per the provisions of section 50C of the Act. In response to the notice, the assessee filed revised return wherein his share of sales consideration was taken at Rs. 11,84,065 being the stamp duty value as per the provisions of section 50C of the Act. The assessee paid the taxes alongwith the interest. The AO vide his order u/s 143(3) rws 147 accepted the revised return. Subsequently the AO initiated penalty proceedings u/s 271(1)(c) for the reason that the assessee in the original return had not shown capital gains as per the provisions of section 50C. The submissions and explanations made by the assessee were rejected by the AO and he levied a penalty of Rs. 1,39,305/- u/s 271(1)(c). The assessee preferred appeal before CIT(A). CIT(A) confirmed the action of the AO for the reason that the revision of return was done only after the receipt of notice u/s 148 and was not a voluntary revision done in a suo motto manner. CIT opined that the present was a case where inaccurate particulars were furnished and the correct particulars were suppressed from the Revenue with intent of concealment. Aggrieved by the action of the CIT(A), the assessee is now in appeal before us.

3. The Ld. A.R. submitted that the property was owned by nine co-owners and the assessee was of the view that the value adopted by stamp duty authority was more than the fair market value of such property. The assessee has not received any amount in excess of what is shown in the sale deed but the tax has been levied by invoking the deeming provisions of section 50C. It was further stated that the stamp duty and the additional stamp duty was paid by the purchaser and not by the assessee. There is nothing on record which suggests that the assessee has received amount over and above the sale value declared in the sale deed or purchaser has paid additional amount to the assessee. It was further submitted that the penalty proceedings are apart and separate from assessment proceedings and therefore the additions made in the assessment proceedings cannot be the basis for concluding that the assessee is guilty of concealment. Before the assessee is held liable for concealing the particulars of income or furnishing of inaccurate particulars of income, it has to be independently found in penalty proceedings that the disputed amount represents his income. The assessee further relied on the decisions of Prakash Chand Nahar Vs ITO (2007) 110 TTJ (Jd) 886, ACIT vs Mrs. N. Meenakshi (2009) 125 TTJ (Chennai) 856 and Renu Hingorani Vs ACIT (ITA No 2210/Mum/2010).