12 March 2009
sir, Following is the case law of HC, My case is identical for same for Shares Transactions. Any one have such other decision/any other to delete penalty by A.O. for filed Original belated return/late filed & declared income of Shares transactions.
I have already filed appeal for CIT(A) my 2cases are as per below and one as above.
Any one have came across such case, pls also provide me any other case laws pls.
HIGH COURT OF PUNJAB AND HARYANA
Commissioner of Income Tax, Kamal
SATISH KUMAR MITTAL AND AUGUSTINE GEORGE MASIH, JJ.
I.T. APPEAL Nos. 353, to 356 of 2008
JULY 22, 2008
Section 271 (1) (c) of the Income-tax Act, 1961 – Penalty- For concealment of income – Assessment year 1998-99 – For relevant assessment year, assessee filed return of income declaring capital gain on sale of shares – Assessing Officer processed said return under section 143(1) (a) – Subsequently, Assessing Officer on basis of information received from revenue authorities that sale of shares which capital gain had been declared by assessee in original return, was bogus, issued notice under section 148 - In response to notice, assessee filed revised return surrendering entire amount of sale proceeds of shares allegedly in order peace of mind and to avoid hazards of litigation and also to save itself from any penal action – Assesing Officer framed assessment on basis of revised return – He Assessing Officer also imposed penalty under section 271(1) (c) upon assessee holding that assessee had filed revised return after detection of concealment of income by department and since assessee had intentionally played fraud to avoid higher rate of tax, he was guilty in terms of section 271(1) (c) – Whether since 1. Assessing Officer had simply rested his conclusion on act of assessee of having offered additional income in revised return Assessing Officer and had failed to take any objection that declaration of income made by assessee in his revised return and his explanation were not bonafide, imposed upon assessee was not justified and had been rightly set aside by appellate authorities – Held, yes
For the relevant assessment year, the assessee filed the return declaring certain income which included long term capital gain on sale of shares. The return was processed under section 143 (1) (a). Subsequently, the Assessing Officer on the basis of an information received from the Deputy Director of Income Tax (investigation), that the sale of shares, on which capital gain had been declared by the assessee in the original return, was indeed bogus, issued a notice under section 148 to the assessee. In response to the said notice, the assessee filed the revised return of income surrendering the entire amount of sale proceeds of the shares. The Assessing Officer also imposed penalty under section 271(1) (c) upon assessee holding that revised return was filed after detection of concealment of income by department and since assessee had intentionally played fraud to avoid higher rate of tax of 30 percent as against 20 percent applicable on declaration on capital gains, he was guilty in terms of section 271(1) (c). On appeal, the commissioner (Appeals) deleted the penalty by accepting the plea of the assessee that the additional income was declared only to buy the peace of mind and to avoid litigation with the revenue and no material was found by the Assessing Officer during the assessment to show that the stand of the assessee, reflected by the transaction resulting in long term capital gains, was either non-genuine or bogus. On further appeal, the Tribunal held that the Assessing Officer had not placed on record any material or evidence to discharge his burden of proving concealment, and that he had rested his conclusion simply on the act of assessee of having offered additional income in the return filed in response to notice under section 148. As the additional income so offered by the assesse was done in good faith, penalty under section 271(1)(c) could not be levied upon the assessee. The Tribunal, therefore, upheld the order of the Commissioner (Appeals).
On appeal to the High Court:
The revised return filed by the assessee 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. 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 had recoded a pure finding of fact to the effect that the Assessing Officer had not placed on record any material or evidence to discharge his burden of proving concealment. In the assessment order no such finding was recorded. The Assessing Officer had simply rested his conclusion on the act of assessee of having offered additional income in the return filed in response to the notice issued under section 148. The Tribunal had further held that the additional income so offered by the assessee was done in good faith and to buy peace. The Apex Court in case of CIT v. Suresh Chandra Mittal,  251 ITR 9/119 Taxman 433, has upheld the decision of the Madhya Pradesh High Court rendered in the case of CIT vs. Suresh Chandra Mittal  241 ITR 124, where in similar circumstances it was held that the initial burden lies on the revenue to establish that the assessee had concealed the income 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 Officer. In the instant case, in pursuance of the notice under section 148, 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 his explanation were not bonafide. Therefore the impugned order of Tribunal was justified and deserved to be upheld. [Para.7].