Case Law Details

Case Name : Prabhjit Singh Sidhu Vs. Asst. DIT (International Taxation) (ITAT Chandigarh)
Appeal Number : ITA No. 909/Chd/2015
Date of Judgement/Order : 12/06/2017
Related Assessment Year : 2008-09
Courts : All ITAT (5167) ITAT Chandigarh (120)

Prabhjit Singh Sidhu Vs. Asst. DIT (International Taxation) (ITAT Chandigarh)

The facts before us also demonstrate that the disclosure in the return of income filed under section 148 of the Act was voluntary and before detection of the same by the Revenue. The payment of taxes on the said income two months prior to issue of notice under section 148 by the Revenue reveals that the assessee intended to disclose the same by way of revised return which he could have validly done in the said period since the limitation for filing the revised return expired on 31-3-2010 while the assessee had paid taxes on the impugned capital gain in the month of October, 2009. The explanation of the assessee that he did not disclose the same by way of a revised return in November, December, 2009 after paying taxes in October, 2009, on account of the fact or for the reason that he was out of the city has neither been controverted by the Revenue, nor provide to be false. Therefore, the disclosure of the same in the return filed in response to notice under section 148 of the Act on 2-1-2010 cannot be said to be after detection of the said income by the assessing officer.

Moreover, we find that the return filed in response to notice under section 148 disclosing the impugned capital gains has been regularized by the Revenue. Further, the bona fides of the assessee also stand established since he had bona fidely not disclosed the same in his return of income and intended disclosing thereafter by paying taxes on the same even before notice under section 148 was issued. Thus, the decision of the jurisdictional High Court in the case of Rajiv Garg (supra) squarely applies in the present case, following which we hold the assessee cannot be held to have concealed particulars of his income relating to capital grains amounting to Rs. 29,25,000.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

This appeal has been filed by the assessee against the order passed by the Commissioner (Appeals)-43, New Delhi, date 30-11-2015 pertaining to assessment year 2008-09 upholding the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).

2. The assessee has raised following grounds of appeal :–

“1. That the learned Commissioner (Appeals) has erred in upholding the imposition of penalty of Rs. 6,62,805 which is arbitrary and unjustified.

2. That no penalty under section 271(1)(c) of the Act is called for inasmuch as there has neither been any concealment of income nor furnishing of inaccurate particulars of income as such the order is unjustified and arbitrary.

3. The penalty upheld is on a highly debatable issue inasmuch as whether any capital gains accrued to the assessee on amount received in part and levied on flat which is not in existence and as such the penalty upheld is illegal, arbitrary and unjustified.

4. That the order of the learned Commissioner (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.”

3. The facts relevant to the issue are that a housing society, named as The Defence Services Co-operative House Building Society Ltd., Mohali (hereinafter referred to as ‘Society’) consisting of 207 members was formed, which was the owner of 27.3 acres of land in Village Kansal, District Mohali. This society entered into a tripartite joint development agreement (hereinafter referred to as ‘agreement’) on 27-4-2007 with M/s. Hash Builder (P) Ltd., Chandigarh, and M/s. Tata Housing Development Company Ltd., Mumbai (hereinafter referred to as THDC) by virtue of which the society would transfer its land for development in lieu of monetary consideration and also consideration in kind to the members of the society. The assessee was also a member of the said society owning 500 sq. yards land. The total consideration was settled at Rs. 80,00,000 plus allotment of one flat of 2,250 sq. feet to the assessee out of which the appellant had received Rs. 32 lacs. The assessee filed his return of income declaring income of Rs. 2,66,143 on 31-7-2008. Subsequently, another return was filed on 6-1-2010 in response to notice under section 148, in which capital gain of Rs. 29,25,000 on transfer of plot was declared. Thus, the assessee in his original return had not disclosed the capital gain amounting to Rs. 29,25,000. The assessing officer noticed that as per the agreement date 27-4-2007, each of the members of the society including the assessee, owning plot of 500 sq, yards were to receive Rs. 80,00,000 in cash and a furnished flat measuring 2,250 sq. ft., with market value of Rs. 1,01,25,000, calculated @ Rs. 4,500 per sq. ft. Thus, the total consideration received by the assessee for transfer of plot came to Rs. 1,81,25,000. The assessing officer computed the income by way of capital gains by adopting this amount as sale consideration. Finally, the assessment was made by taking capital gains income at Rs. 1,78,50,000. Penalty proceedings under section 271(1)(c) were also initiated. In the penalty proceedings, the assessee had filed a reply, but the assessing officer was not satisfied with the explanation and levied minimum leviable penalty of Rs. 60.7;». 171, stating that the assessee had deliberately concealed particulars of income as the capital gain was not declared in the original return filed on 31-7-2008 and even in response to notice under section 148 capital gain to the tune of Rs. 29,25,000 only was declared in the return filed on 6-1-2010.

4. Aggrieved by the same, the assessee carried the matter in appeal before the learned Commissioner (Appeals). The learned Commissioner (Appeals) found that the Hon’ble High Court had restricted the addition made to the amount of consideration actually received by the assessee vide their order in IT Appeal No. 200 of 2013 (Q&M), date 22-7-2015 (C.S. Atwal & Ors. v. CIT & Am. (2015) 279 CTR (P&H) 330–Ed.). Consequently, the learned Commissioner (Appeals) gave a specific opportunity to the assessee to make its submission on why penalty should not be levied on the capital gain which has been held by the Hon’ble High Court as taxable in the impugned order since the same had not been declared in the original return filed by the assessee but only in the return filed in response to notice under section 148 of the Act. In response to the same, the assessee vide his letter date 17-11-2015 submitted that though the impugned capital gain had not been included in the original return filed, the positive intention of the assessee was to disclose the same in its revised return of income which is evident from the fact by the assessee on 27-10-2009 well before notice under section 148 was received by the assessee on 21-12-2009. The assessee contended that the revised return could not be filed immediately thereafter since the assessee was out of city in November and December, 2009. The assessee contended that its bona fides are demonstrated by the fact that the tax and interest were deposited two months before the receipt of notice under section 148 of the Act on his own despite the fact that the tax ability of transaction was mired in ambiguity and transaction was subject to different opinions and doubts. The assessee further stated that the total relief has been granted by the Commissioner (Appeals), Chandigarh, in the case of Mrs. Surjit Kaur with exactly same circumstances as in the case of the assessee. The learned Commissioner (Appeals) after considering the assessee’s submissions upheld the levy of penalty on the capital gains not disclosed in the original return of income to the extent of Rs. 29,25,000 which was taxable in the impugned year as per the order of the Hon’ble High Court. The learned Commissioner (Appeals) held that the assessee having failed to disclose the same in its original return filed on 31-7-2008 had concealed particulars of his income and merely because the assessee had admitted the capital gains and paid taxes thereon, did not absolve him of his guilt or wrongdoing. The relevant finding of the learned Commissioner (Appeals) at para 5 of his order is as under :–

“5. It is noted that the appellant in his return filed originally on 31-7-2008, did not show the amount of capital gain on the undisputed consideration of Rs. 32,00,000. It was only in the return of income which was filed on 6-1-2010, after a notice under section 148 was received that the appellant owned up/showed the undisputed admitted amount of capital gains amounting to Rs. 29,25,000 (arising on the consideration of Rs. 32,00,000). The appellant himself admits that capital gains arising on consideration of Rs. 32,00,000 was taxable. It is clear that the appellant failed to show this amount of capital gains amounting to Rs. 29,25,000 in the return of income filed originally on 31-7-2008. The mere fact that the appellant admitted the capital gains of Rs. 29,25,000 and paid taxes there upon does not absolve him of his guilt or wrongdoing. It is the duty of every taxpayer to pay taxes truly and fully on the income which admittedly is undisputed. It was the appellant’s duty to disclose his true income in the return of income filed originally on 31-7-2008, But he failed to do so. Further, the order of Hon’ble Commissioner (Appeals), Chandigarh, date 5-11-2013, in case of Smt. Swjit Kaur in Appeal No. 625 of 2012-13 was passed when the illumination/guidance of order of Hon’ble Punjab and Haryana High Court date 22-7-2015, in ITA No. 200 of 2013 (O&M) was not available. In the order of the Hon’ble High Court it has been clearly held that capital gains arising out of the amounts that had already been received was taxable.

As such, I agree with the findings of the assessing officer who had held in his penalty order (at 5th last paragraph), “The assessee had deliberately concealed the particulars of income as the capital gain was not declared in the original return filed on 31-7-2008 and even in response to notice under section 148, capital gain to the tune of Rs. 29,25,000 was declared in the return filed on 6-1-2010. Thus, it was a deliberate concealment by the assessee”. I find that the appellant had not reported his income leading to concealment, within the meaning of provisions of section 271(1)(c) of the Income Tax Act, 1961. The assessing officer had calculated the long-term capital gain on which penalty was to be levied at Rs. 1,78,50,000. However, pursuant to the order of Hon’ble Punjab and Haryana High Court, the capital gains upon which penalty under section 271(1)(c) is to be levied is determined at Rs. 29,25,000. Tax thereupon @ 20 per cent being LTCG and Surcharge and Educational Cess thereupon totals to Rs. 6,62,805 (Tax @ 20 per cent amounting to Rs. 5,85,000 plus Surcharge @ 10 per cent on tax Rs. 58,500 plus Education Cess @ 3 per cent on 6,43,500 (Rs. 19,305). Penalty under section 271(1)(c) at 100 per cent of Rs. 6,62,805 is hereby levied.

Penalty amounting to Rs. 60,76,171 is down scaled to Rs. 6,62,805. The appeal is disposed of accordingly.”

5. Aggrieved by the same, the assessee has now come up in appeal before us. Before us, the learned counsel for assessee reiterated his contentions made before the learned Commissioner (Appeals). The learned counsel for assessee stated that since the issue was mired in controversy, capital gains had not been disclosed in the original return of income filed on 31-7-2008. The learned counsel for assessee submitted that thereafter the assessee with the intent to disclose capital gains in the amount actually received by it had paid taxes and with the intent of filing a revised return but since he was out of city in November and December, the revised return could not be filed. The learned counsel for assessee contended that in the meanwhile notice under section 148 was received by him on 27-12-2009 in response to which return was filed disclosing impugned capital gain. The learned counsel for assessee contended that the assessee bona fldely wished to disclose the said amount in his return of income and that the disclosure in the return filed in response to notice under section 148 was not on account of the fact that the assessee had been cornered by the assessing officer. The learned counsel for assessee, therefore, stated that no penalty in the present circumstances was leviable.

6. The learned Departmental Representative, on the other hand, relied upon the order of the learned Commissioner (Appeals).

7. We have heard the rival contentions. The issue before us pertains to levy of penalty under section 271(1)(c) of the Act for concealing or furnishing inaccurate particulars of income relating to capital gains amounting to Rs. 29,25,000.

8. The facts which emerge before us and which are relevant for the adjudication of the issue are that the original return was filed by the assessee under section 139(1) on 31-7-2008 which did not disclose the said capital gain. The assessee paid taxes on the impugned capital gain in October, 2009. The capital gains earned on transfer of plot amounting to Rs. 29,25,000 was disclosed in the return filed in response to notice under section 148 on 6-1-2010. The said capital gain has been held by the Hon’ble jurisdictional High Court to the amount to be assessed in the impugned year vide its order in ITA No. 200 of 2013 (O&M), date 22-7-2015.

9. The learned Commissioner (Appeals) after appreciating the said facts upheld the levy of penalty under section 271(1)(c) of the Act on account of the fact that the capital gain was not disclosed in the original return of income disregarding the return filed under section 148, since he held that it was assessee’s duty to disclose the said income in the return originally filed. The learned Commissioner (Appeals) held that the assessee had deliberately concealed the particulars of income in the original return filed. The contention of the learned counsel for assessee, on the other hand, has been that the disclosure in the original return was not deliberate, the assessee bona fldely disclosed the said capital gains in the return of income filed under section 148 before detection of concealment by the assessing officer which is evident from the fact that the tax on the said income was paid two months prior to the receipt of notice under section 148 of the Act. As per the assessee, concealment has to be seen vis-a-vis return filed under section 148 and not vis-a-vis original return filed.

10. The limited question before us is whether concealment of income has to be seen vis-a-vis original return filed or vis-a-vis the return revised under section 148 of the Income Tax Act, 1961.

11. The Hon’ble Courts have dealt with this issue in a number of cases and the position of law which emerges is that the concealment of income has to be seen vis-a-vis original return of income filed under section 139(1). But, at the same time it has been held in a number of decisions that an inadvertent or omission in the original return of income, corrected by way of revised return shall not attract penalty under section 271(1)(c) of the Act. The Madras High Court in the case of CIT v. J.K.A. Subramania Chettiar (1977) 110 ITR 602 (Mad) held as under :–

“There would appear to be a mixing up of two things–(1) the act of filing of the subsequent return giving full particulars of the income, while in the original return the assessee had deliberately furnished inaccurate particulars of income, and (2) the stage and the time at which the subsequent return was filed, namely, whether it was done voluntarily or at the time when the Department had probed into the matter and was at the point of discovering the concealment made by the assessee. The second aspect will have no relevancy whatever to a case where there was concealment in the original return, because the concealment must necessarily imply a deliberate and intentional act, on the part of the assessee. After having originally concealed the income, if an assessee subsequently files a fresh return voluntarily before the Income Tax Department has made any investigation or detected concealment of income, even then he cannot escape from the consequence of his having concealed the income and he will be liable to penalty. If, on the other hand, the defect in the original return was merely an inadvertent omission or unintended wrong statement, certainly the assessee had a right to have the same corrected and to file a revised return under section 22(3) of the 1922 Act or under section 139(5) of the Act and whether the assessee so files a revised return voluntarily or after the Income Tax Officer has noticed the omission or wrong statement will be totally immaterial.”

12. It has also been held that voluntary disclosure of income in revised return before detection by the assessing officer and assessment on the basis of such disclosure would not attract penalty. The Hon’ble Allahabad High Court in the case of Cheap Cycle Stores v. CIT (2006) 281 ITR 166 (All) laid down the said proposition as under :–

“The order-sheet entry date 27-9-1978, does not mention anything about concealment in the closing stock having been detected by the assessing officer. Revised return was filed on 26-10-1978. It may be mentioned here that the applicant having filed original return within the statutory period as provided under section 139(1), it was entitled to file a revised return under the provisions of section 139(5). Thus, the revised return filed under section 139(5) was a valid return and was to be taken into consideration. No concealment having been found in the revised return, the penalty in respect of the income declared in the return originally filed could not have been taken as the concealment had not yet been detected by the assessing officer up till the time revised return was filed. The AAC had rightly considered the order-sheet entry date 27-9-1978, while recording finding that till then no concealment had been detected. The Tribunal was not justified in upholding that the applicant had concealed the particulars of the turnover and revised return was only a cover up.”

13. Hon’ble Courts have also held that disclosure of additional income in revised return shall not absolve the assessee of the charge of concealment if the omission to disclose the same in the original return was conscious and wilful. In the case of Mohd. Ibrahim Azimullah v. CIT (1981) 131 ITR 680 (All), the Hon’ble Allahabad High Court held as under :–

“In case of discovery or wrong statement the assessee may file revised return under section 139(5), the acceptance of which depends on fulfillment of these essentials. It is not the voluntary disclosure but the disclosure in the circumstances mentioned in the section which enures to benefit of assessee as a disclosure may be voluntary yet dishonest. If the disclosure is to cover up or was in knowledge of assessee or made in bad faith then it does not come within ambit of section 139(5) nor can assessee claim any benefit on it. The original and revised return become one if they are in accordance with section 139(1) and (5) but not otherwise. The guilt of non­disclosure is not washed off by admission or confession. The mere filing of revised return therefore does not rule out applicability of section 271.”

14. In the case of CIT v. Suresh Chandra Mittal (2001) 251 ITR 9 (SC), the Hon’ble Apex Court upheld the order of the Hon’ble Madhya Pradesh High Court which had held that where the revised return has been regularized by the Revenue and the explanation of the assessee for declaring additional income in the said return found to be bona fide, there was no case for levy of penalty under section 271(1)(c) of the Act. The relevant findings of the Hon’ble High Court, upheld by the Hon’ble Apex Court, at paras 6 and 7 of the order are as under :–

“6. We find ourselves in agreement with the view taken by the Tribunal. It is well-settled that under section 271(1)(c), initial burden lies on the Revenue to establish that assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers explanation which is found to be false by the assessing authority. However, proviso to Expln. 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide.

7. In the present case, though it is true that assessee had not surrendered at all and that he had done so on the persistent queries made by assessing officer but once the revised assessment was regularized by the Revenue and once the assessing authority had failed to take any objection in the matter, the declaration of income made by the assessee in his revised returns and his explanation that he had done so to buy peace with the Department and to come out of vexed litigation could be treated as bona fide in the facts and circumstances of the case. Therefore, Tribunal was justified in cancelling the penalty levied by assessing officer and affirmed by Commissioner (Appeals) in the facts and circumstances of the case. This reference is accordingly answered in affirmative holding that Tribunal was justified in doing so.”

15. In the case of CIT v. Rajiv Garg & Ors. ((2009) 224 CTR (P&H) 321–Ed.), the Hon’ble jurisdictional High Court has applied the aforesaid proposition of the Hon’ble Apex Court and deleted the levy of penalty. The Hon’ble High Court held in the said case that :–

“After hearing the learned counsel for the appellant, we do not find, any merit in this appeal. Undisputedly, the assessee filed the return of income declaring its total income at Rs. 47,05,230, which inter alia included long-term capital gain on sale of shares amounting to Rs. 29,74,951. The return was processed in terms of section 143(l)(a) of the Act on 15-3-1999. Subsequently, on the basis of some information with regard to sale proceeds of the shares amounting to Rs. 32,40,385 on which the capital gain was declared at Rs. 29,74,951 by the assessee in the original return, a notice under section 148 of the Act was issued. Pursuant to the said notice, the assessee filed the revised return of income showing higher income. The said return of income was accompanied by a note in which the assessee submitted that he surrendered the entire amount of sale proceeds of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. Later on, on the basis of revised return, the assessment was framed and the return submitted by the assessee was regularized as it is. During the course of assessment, the aforesaid explanation given by the assessee was neither rejected nor it was held to be mala fide. The Tribunal has recorded a pure finding of fact to the effect that the Revenue has not placed on record any material or evidence to discharge its burden of proving concealment. In the assessment order no such finding was recorded. The Department has simply rested its conclusion on the act of assessee of having offered additional income in the return filed in response to the notice issued under section 148 of the Act. The Tribunal has further held that the additional income so offered by the assessee was done in good faith and to buy peace. The Tribunal has relied upon the decision of the Apex Court in case of CIT v. Suresh Chandra Mittal (2001) 251 ITR 9 (SC) wherein the Supreme Court has upheld the decision of the Madhya Pradesh High Court in CIT v. Suresh Chandra Mittal (2000) 241 ITR 124 (MP), where in similar circumstances it was held that the initial burden lies on the Revenue to establish that the assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by the assessing authority. In the present case, in pursuance of the notice under section 148 of the Act, the revised return of income was filed in which the entire income was surrendered with an explanation. The revised assessment was regularized by the Revenue. The assessing authority had failed to take any objection that the declaration of income made by the assessee in his revised return and in his explanation was not bona fide. Therefore, in view of the aforesaid finding, the Tribunal was justified in upholding the order of the Commissioner (Appeals), whereby the penalty imposed under section 271(1)(c) of the Act by the assessing officer was ordered to be deleted.

8. In view of the aforesaid discussion, we are of the opinion that no substantial question of law is arising in this appeal. Hence, finding no merits in the appeals, the same are hereby dismissed.”

16. The position which emerges, therefore, is that the assessee cannot be charged with having concealed particulars of his income if :–

(i) non-disclosure in the original return was not wilful;

(ii) the same is disclosed in the return of income filed under section 148 or revised return under section 139(5), before detection by the assessing officer;

(iii) the return under section 148/139(5) is regularized by the Revenue; and

(iv) the explanation of the assessee for including the same in the revised return or return filed in response to notice under section 148 is found to be bona fide.

17. Applying the aforesaid legal position to the facts of the present case, we find that the assessee had demonstrated that the non-disclosure of the capital gain amounting to Rs. 29,25,000 was not willful. The reasons given by the assessee during assessment proceedings for not including the capital gain in the return of income, vide his reply dt. 14-12-2010, reproduced in the assessment order are as under :–

“1. As already mentioned in our earlier letter dt. 5-10-2010 that the amount received under the agreement is actually advances received and not the sale consideration and the land transferred in favor of THDC Ltd. is only on account of security. A letter from the society to that effect had also been enclosed. The handing over the possession of the land was only to facilitate TATA’s for securing of various permissions from the agreement. And till date all those permission have not yet been obtained.

2. Moreover handing over of the part possession of land does not have the effect of transferring or enabling the enjoyment of any immovable property or any right therein as the transfer was conditional i.e., subject to grant of various permissions from the Government authorities. The agreement under reference is only an agreement to sell and not a sale deed and hence capital gain should not arise.

3. Tax liability should arise only to the extent of completed transaction and for which consideration has been received. The assessee has fully discharged his liability along with interest even before the issue of notice to that extent. There can be only tax liability on an incomplete transaction.

4. In the letter full notional value of flat has been considered, which will be given only after full land has been transferred, but at present only a part of. land has been transferred, no consideration on account of flat is available and even the monetary consideration has only been received only in part (in that assessment year only) till date.

5. The developer has not even acquired the land till date has not even obtained the permissions to start development. The matter is at present mired in whole lot of controversies and is at present subjudice. So, there is no question of construction of flats in the near future at least, and even the whole project may be shelved there is no capital asset in existence as on date which the notional value is being considered.

6. As per column 9.3 of the agreement, ownership has not been transferred, only the development right has been transferred, therefore there is no property under section 53A of Transfer of Property Act.

7. It is mentioned in the agreement that allotment rights have been surrendered by the members in favor of society and not in favor of buyers. So i,t does not fall within the definition of transfer of property under section 2(14) and 2(47).

8. As per the termination clause of the agreement, the agreement can be terminated under various conditions. And in that event land transferred will be retained by TATA and no further consideration shall be given to the members. It is clearly evident that an inordinate delay has already occurred and it will not be fair and equitable to tax a person on a money which has not been received even after more than 3 and half years after the date of agreement and there is a high possibility that it may never be received at all.

9. It is clearly mentioned in the agreement that the possession of the property has been handed over only to develop the property as it is a tripartite joint development agreement. The payment to members was to be made by the members on pro rota on transfer of land. The payment of consideration is directly linked to the transfer of land in favor of developer. The consideration will not be received if the land is not transferred. And the possession has been transferred only for development and the termination clause states that if the agreement is terminated the TATA will retain the land already transferred and the remaining land will be handed over back to members. And actually, no development work has been undertaken till date because the stipulated conditions have not been complied with section 53A of Transfer of Property Act does not apply except to the extent of land transferred by way of transfer deed.”

18. The above arguments did not find favor either with the assessing officer, the Commissioner (Appeals) or even the Tribunal who held that the transfer took place in the impugned year and thus, the entire consideration receivable was liable to be taxed in the impugned year. The Hon’ble High Court in turn held only the portion of lands transferred by way of registered sale deed as being transferred and consequently the compensation received on account of the same as taxable during the year. The learned counsel for the assessee drew attention to the orders of the Tribunal and the Hon’ble High Court in this regard.

19. The above clearly proves that non-disclosure of the capital gains in the original return was based on a bona fide belief and even otherwise the taxability of the capital gains arising from the said transaction was mired in controversy. Thus, clearly the non-disclosure of the capital gain in the original return of income was not willful on the part of the assessee. The contention of the learned Departmental Representative that the payment of taxes on the same by the assessee in October, 2009 and his intention to disclose the same reveals that the assessee was aware that the said income was taxable in the impugned year merits no consideration. That the issue was controversial having been established, merely because the assessee voluntarily intended to disclose the same in the return of income does not take away the controversy in the same or for that matter establish that it was free of controversy.

20. Further, the facts before us also demonstrate that the disclosure in the return of income filed under section 148 of the Act was voluntary and before detection of the same by the Revenue. The payment of taxes on the said income two months prior to issue of notice under section 148 by the Revenue reveals that the assessee intended to disclose the same by way of revised return which he could have validly done in the said period since the limitation for filing the revised return expired on 31-3-2010 while the assessee had paid taxes on the impugned capital gain in the month of October, 2009. The explanation of the assessee that he did not disclose the same by way of a revised return in November, December, 2009 after paying taxes in October, 2009, on account of the fact or for the reason that he was out of the city has neither been controverted by the Revenue, nor provide to be false. Therefore, the disclosure of the same in the return filed in response to notice under section 148 of the Act on 2-1-2010 cannot be said to be after detection of the said income by the assessing officer.

21. Moreover, we find that the return filed in response to notice under section 148 disclosing the impugned capital gains has been regularized by the Revenue. Further, the bona fides of the assessee also stand established since he had bona fidely not disclosed the same in his return of income and intended disclosing thereafter by paying taxes on the same even before notice under section 148 was issued. Thus, the decision of the jurisdictional High Court in the case of Rajiv Garg (supra) squarely applies in the present case, following which we hold the assessee cannot be held to have concealed particulars of his income relating to capital grains amounting to Rs. 29,25,000. The penalty levied under section 271(1)(c) of the Act is, therefore, deleted and the order of the Commissioner (Appeals) is set aside. 22. In the result, the appeal of the assessee is allowed.

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Category : Income Tax (27491)
Type : Judiciary (11690)
Tags : ITAT Judgments (5351) section 147 (445) section 148 (371) section 271(1)(c) (374)

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