Case Law Details
Gangotri Textiles Ltd. Vs. DCIT (Madras High Court)
The issue under consideration is whether the penalty u/s 271(1)(c) levied by the assessing officer is justified in law?
In the present case, the assessee did not disclose about the sale of the lands and windmill in the return of income, which was clear from the perusal of the return of income and in the relevant column, it is stated as ‘Nil’. In the course of assessment, the assessee admitted to have omitted the sale of land and windmill and filed a letter along with a computation of Long Term Capital Gain [LTCG] on the sale of lands and the Short Term Capital Gain [STCG] on the sale of windmill. Taking note of the admission made by the assessee, the LTCG and the STCG were added to the total income of the assessee and accordingly assessment was completed. Then AO initiated the penalty proceedings under Section 271(1)(c).
High Court states that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. The Assessing Officer placed reliance on the decision of the Hon’ble Supreme Court in Mak Data P. Ltd vs. CIT-II and stated that voluntary disclosure does not release the assesee from mischief of penalty proceedings under Section 271(1)(c) of the Act. Therefore, we find that the penalty order is a reasoned order. Further, the assessee, for the first time stated that due to inadvertence, they did not disclose the particulars relating to the capital gains. The above facts will clearly show that the assessee did not act bonafidely and the belated explanation sought to be offered deserves to be rejected. Hence, HC held that it will not only be a case of filing inaccurate particulars, but also a case of concealment of income. Therefore, the penalty levied u/s 271(1)(c) is justified.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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