Dy. CIT v. Madhu Raj Lalwani - Taxpublishers.in

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The Tax Publishers2012 TaxPub(DT) 0599 (Del-Trib) : (2011) 132 ITD 0109 INCOME TAX ACT, 1961 --Penalty under section 271(1)(c)--SatisfactionNon-recording--Assessee had claimed the capital gain to be exempt under section 10(38). Assessing officer requested her to furnish bills. Assessing officer completed assessment in which, it was inter alia mentioned that in view of above discussion, the amount of Rs. 33,34,973 was treated as income of assessee from capital gains arising out of the transaction of listed securities as per section 112. Penalty under section 271(1)(c) had been initiated on this point separately. *Held:* The claim of assessee had been rejected by treating the said amount as income liable to be taxed under the head 'capital gains' and penalty proceeding had been initiated on this issue. Thus, this amounted to recording a prima facie satisfaction that assessee furnished inaccurate particulars of income. Coming to the facts of this case, the assessing officer gave a finding that assessee was asked to submit proof of purchase and sale of shares, in response to which purchase note and sale notes were filed. Thereafter, the assessee offered capital gains for taxation on 29-8-2008 by filing a letter to that effect. In the concluding paragraph, following observations were made : 'In view of the above discussion the amount of Rs. 33,34,973 is treated as the income of assessee from capital gains arising out of transaction of listed securities as mentioned in the proviso to section 112 of the Income Tax Act, 1961. Penalty under section 271(1)(c) has been initiated on this point separately.' Thus, it transpires that the claim of the assessee has been rejected by treating the amount of Rs. 33,34,973 as income liable to be taxed under the head 'Capital gains' and penalty proceedings have been initiated on this issue. Accordingly amounted to recording a prima facie satisfaction that assessee furnished inaccurate particulars of income. [Para 6] Income Tax Act, 1961, Section 271(1)(c) INCOME TAX ACT, 1961 --Penalty under section 271(1)(c)--ConcealmentVoluntary surrender of income--Assessee claimed capital gain on sale of shares to be exempt under section 10(38). The assessing officer requested her to furnish purchase and sale bills. The details were furnished in two different letters and surrender of capital gain was made on third hearing. assessing officer levied penalty under section 271(1)(c) on this transaction. Assessee gave explanation that the error occurred due to the accountant who did not properly interpret the section 10(38) that securities transaction tax had not been paid. No affidavit had been filed from the accountant in support of this explanation. Commissioner (Appeals) held that assessee pointed out the mistake suo motu and explanation was bona fide. Assessing officer argued that surrender of income was not voluntary as this was done on third hearing and not immediately. *Held:* Claim and explanation of assessee were not supported by any material on record except a bland argument. The findings of Commissioner (Appeals) that the surrender was made prior to detection by department and explanation was bona fide, could not be upheld. Therefore, assessee was liable to penalty for concealment of income. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0599 (Del-Trib) : (2011) 132 ITD 0109

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--SatisfactionNon-recording--Assessee had claimed the capital gain to be exempt under section 10(38). Assessing officer requested her to furnish bills. Assessing officer completed assessment in which, it was inter alia mentioned that in view of above discussion, the amount of Rs. 33,34,973 was treated as income of assessee from capital gains arising out of the transaction of listed securities as per section 112. Penalty under section 271(1)(c) had been initiated on this point separately. Held: The claim of assessee had been rejected by treating the said amount as income liable to be taxed under the head 'capital gains' and penalty proceeding had been initiated on this issue. Thus, this amounted to recording a prima facie satisfaction that assessee furnished inaccurate particulars of income.

Coming to the facts of this case, the assessing officer gave a finding that assessee was asked to submit proof of purchase and sale of shares, in response to which purchase note and sale notes were filed. Thereafter, the assessee offered capital gains for taxation on 29-8-2008 by filing a letter to that effect. In the concluding paragraph, following observations were made : 'In view of the above discussion the amount of Rs. 33,34,973 is treated as the income of assessee from capital gains arising out of transaction of listed securities as mentioned in the proviso to section 112 of the Income Tax Act, 1961. Penalty under section 271(1)(c) has been initiated on this point separately.' Thus, it transpires that the claim of the assessee has been rejected by treating the amount of Rs. 33,34,973 as income liable to be taxed under the head 'Capital gains' and penalty proceedings have been initiated on this issue. Accordingly amounted to recording a prima facie satisfaction that assessee furnished inaccurate particulars of income. [Para 6]

Income Tax Act, 1961, Section 271(1)(c)

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--ConcealmentVoluntary surrender of income--Assessee claimed capital gain on sale of shares to be exempt under section 10(38). The assessing officer requested her to furnish purchase and sale bills. The details were furnished in two different letters and surrender of capital gain was made on third hearing. assessing officer levied penalty under section 271(1)(c) on this transaction. Assessee gave explanation that the error occurred due to the accountant who did not properly interpret the section 10(38) that securities transaction tax had not been paid. No affidavit had been filed from the accountant in support of this explanation. Commissioner (Appeals) held that assessee pointed out the mistake suo motu and explanation was bona fide. Assessing officer argued that surrender of income was not voluntary as this was done on third hearing and not immediately. Held: Claim and explanation of assessee were not supported by any material on record except a bland argument. The findings of Commissioner (Appeals) that the surrender was made prior to detection by department and explanation was bona fide, could not be upheld. Therefore, assessee was liable to penalty for concealment of income.