DEVI DASS SUKHANI v. INCOME TAX OFFICER
[Citation -2006-LL-0421-18]

Citation 2006-LL-0421-18
Appellant Name DEVI DASS SUKHANI
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 21/04/2006
Assessment Year 2001-02
Judgment View Judgment
Keyword Tags concealment of income • new residential house • bona fide mistake • original return • house property • capital gain • wrong claim • evade tax • new house
Bot Summary: The facts leading to the levy of penalty under s. 271(1)(c) of the Act are that the assessee filed return of income showing an income of Rs. 3,14,840, but during the course of assessment proceedings, a revised return was also filed showing an income of Rs. 12,59,075. In the computation of total income under the capital gains, it was narrated by the assessee that deduction allowed in asst. The assessee again purchased a new residential house and invested the amount and claimed a deduction although he had already withdrawn the same as mentioned above. The undisputed facts of the case are that the assessee had withdrawn the deduction allowed in the asst. No satisfaction recorded by the AO that the assessee has consciously concealed the taxable income. The finding of the learned CIT(A) that the assessee had deliberately furnished inaccurate particulars and claimed the deduction which he was not entitled to, is not supported by any evidence, fact or circumstance on record. In view of our foregoing discussion we cancel/delete the penalty of Rs. 3,31,425 levied upon the assessee.


This is appeal of assessee for asst. yr. 2001-02, filed in relation to penalty imposed under s 271(1)(c) of Act which was confirmed by learned CIT(A) vide order dt. 10th March, 2005. facts leading to levy of penalty under s. 271(1)(c) of Act are that assessee filed return of income showing income of Rs. 3,14,840, but during course of assessment proceedings, revised return was also filed showing income of Rs. 12,59,075. assessee had disclosed all facts regarding sale of house in original return itself. In computation of total income under capital gains, it was narrated by assessee that deduction allowed in asst. yr. 1999-2000 against investment of proceeds/gains of house sold in purchase of new house withdrawn due to sale of house at Rs. 9,44,232. assessee again purchased new residential house and invested amount and claimed deduction although he had already withdrawn same as mentioned above. AO ignored revised return having been filed beyond permitted time and levied penalty under s. 271(1)(c) of Act for concealment of income chargeable to tax. learned CIT(A), also confirmed penalty of Rs. 3,31,425. assessee is aggrieved and has assailed levy of penalty in this second appeal. We have heard rival submissions and perused evidence available on record. undisputed facts of case are that assessee had withdrawn deduction allowed in asst. yr. 1999-2000 and had claimed same again in this year under s. 54 of Act. This is case of deduction having been claimed under bona fide misconception and belief. There seems to be no evidence on record, which can establish any wilful attempt to evade tax by assessee. When assessee claims deduction, which is not permitted by Act, it does not tantamount to concealment. We have perused assessment order, copy of which is placed at page No. 22 of assessee s paper book. perusal of this order does not reveal that assessee had knowingly concealed taxable income. Moreover, no satisfaction recorded by AO that assessee has consciously concealed taxable income. Hon ble Jurisdictional High Court in case of Chandra Pal Bagga vs. ITAT & Anr. (2003) 182 CTR (Raj) 185: (2003) 261 ITR 67 (Raj), copy of which has been placed at p. 30 of assessee s paper book, has held that in case any wrong claim for exemption is made by assessee but he discussed basic facts regarding sale of house property and do not offer capital gain for tax, under bona fide mistake, it would amount only to technical fault and not concealment of taxable income therefore, no penalty for concealment under s. 271(1)(c) was leviable. facts of this case are mutatis mutandis identical to above case of Hon ble High Court and therefore, by following above decision it can be safely held that when bona fide mistake is committed by assessee, no penalty for concealment can be levied. We have also seen finding of learned CIT(A) on which learned Departmental Representative has placed heavy reliance. finding of learned CIT(A) that assessee had deliberately furnished inaccurate particulars and claimed deduction which he was not entitled to, is not supported by any evidence, fact or circumstance on record. Rather sum-total of evidences and circumstances go to establish that it was bona fide mistake committed by assessee. Therefore, in view of our foregoing discussion we cancel/delete penalty of Rs. 3,31,425 levied upon assessee. We set aside findings of both lower authorities and accept appeal. In result appeal of assessee is allowed. *** DEVI DASS SUKHANI v. INCOME TAX OFFICER
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