ASHA SONI, BILASPUR,BILASPUR V. .DCIT, CIRCLE-1(1), BILASPUR, BILASPUR

ITA 468/RPR/2024

AI Insights

The case involves Asha Soni, who appealed against the penalty imposed by the Deputy Commissioner of Income Tax, Bilaspur, for concealing income by claiming an exemption under Section 10(38) of the Income Tax Act, 1961, on the sale of shares. Initially, the assessee declared an income of Rs. 17,77,290 and claimed an exemption of Rs. 33,04,236 on capital gains from shares. The Assessing Officer (A.O.) rejected this claim and reassessed her income, leading to a penalty under Section 271(1)(c) for concealment of income. The CIT(Appeals) upheld the penalty, which was contested by the assessee in the Tribunal. The Tribunal found that the assessee's actions constituted deliberate concealment of income, thus affirming the penalty.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469800 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Other Referred Cases: Mak Data P. Ltd vs Commissioner Of Income Tax II, Union of India vs. Dharmendra Textile Processors, CIT vs. Atul Mohan Rindal, CIT vs. Suresh Chandra Mittal, K.P. Madhusudan vs. CIT, G.C. Aggarwal vs. CIT, Dy.CIT-1(1) Raipur vs Renu Behl, Pooja Upadhyay vs. ITO-5(1), Jaipur, CIT vs. Puspendra Surana, CIT vs. Rajib Garg
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: YOGESH SETHIA
• Keywords: Set aside; Revised return; Reassessment proceedings; Earning of tax free income; Penny stocks; FORM 26AS; Bogus
• Section: 147; 148; 271(1)(c); 251; 139(1); 113; 13; 139; 274; 133A; 264; 139(5)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 468/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2016-17 Asha Soni Priyadarshi Nagar, Bilaspur (C.G.)-495 001 PAN : AJEPS8536L .......अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax Circle-1(1), Bilaspur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Yogesh Sethia, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 13.12.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 19.12.2024 2 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.08.2024, which in turn arises from the order passed by the A.O under Sec.271(1)(c) of the Income- tax Act, 1961 (in short ‘the Act’) dated 12.01.2024 for the assessment year 2016-17. The assessee has assailed the impugned order on the following effective ground of appeal before us: “1. In the facts and circumstances of the case and in law, Ld. Commissioner of Income Tax (Appeals), National Faceless Centre (NFAC) has erred in confirming imposition of penalty of Rs.10,90,397/- under section 271(1)(c) of the Income Tax Act, 1961 for concealment of income without fulfilling stipulated conditions.” 2. Succinctly stated, the assessee had filed her return of income for A.Y.2016-17 on 29.03.2017 declaring an income of Rs.17,77,290/-. As the assessee had in her return of income raised a claim for exemption u/s 10(38) of “Capital gain” of Rs. 33,04,236/- arising on sale of shares of M/s Capital trade links, therefore, proceedings u/s. 147 of the Act were initiated by the A.O. Notice u/s. 148 of the Act, dated 29.06.2022 was issued to the assessee. 3 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 3. Assessment was, thereafter, framed by the A.O vide his order passed u/s. 147 r.w.s. 144B of the Act, dated 11.05.2023, wherein he declined the assessee’s claim for exemption u/s. 10(38) of the Act of Rs.33,04,236/-, and determined her income at Rs.49,21,530/-. The A.O while culminating the assessment initiated penalty proceedings u/s. 271(1)(c) of the Act for “concealment of income” by the assessee. Thereafter, the A.O called upon the assessee vide “Show Cause Notice” (SCN) dated 12.05.2023 and 26.06.2023 to put forth an explanation as to why she may not be saddled with the penalty u/s. 271(1)(c) of the Act. Although the assessee vide her reply dated 24.07.2023 tried to impress upon the A.O that no penalty u/s. 271(1)(c) of the Act was called for in her case but the same did not find favour with him. The A.O was of the view that as the assessee had wrongly claimed exemption u/s. 10(38) of the Act of Rs. 33.08 lacs (approx.), therefore, it was a fit case for levying penalty for “concealment of income” u/s. 271(1)(c) of the Act. For the sake of clarity, the observation of the A.O are culled out as under: “The assessee has filed her ITR for the A.Y.2016-17 declaring total income at Rs.17,77,290/-. The assessee has derived income from salary, house property, from other sources and agricultural income. During the assessment proceedings, the information available with the Revenue, it was observed that the assessee has claimed exempt income B/s 10(38) in her ITR of Rs 33,04,236/- by claiming long term capital gain on sale of shares of Capital Trade Links. Accordingly case of the assessee was reopened and notice u/s 148 of the Income Tax Act 1961 was issued to the assessee was 29.06.2022. In response to the statutory notice issued to the 4 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 issued to the assessee has submitted a copy of revised ITR filed on 06.02.2023 declaring total income at Rs. 49,21,530/- alongwith computation of income. During the penalty proceeding, assessee has submitted her reply which is considered and found to be not tenable as the assessee has wrongly claimed the exemption u/s 10(38) of the Act. Hence, the case of the assessee is found to be fit case for levy of penalty within meaning of Sec. 271(1)(c) of the Act for concealment of income to the tune of Rs.33,04,236/-. It is noticed that the assessee has not contested the assessment order before appellate authority. Accordingly, the assessee is directed to pay, by way of penalty @100% of the amount of tax sought to be evaded by the directed concealment of income at Rs. 10,90,397/- (Rs. Ten lakh ninety thousand three hundred ninety seven only) within meaning of provisions of Sec. 271(1)(c) of the Act for the year under consideration. The amount of maximum penalty leviable @300% stands at Rs.32,71,191/-. Accordingly, the A.O vide his order passed u/s. 271(1)(c) of the Act, dated 12.01.2024 imposed upon the assessee a penalty of Rs.10,90,397/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) assailing the penalty imposed by the A.O u/s. 271(1)(c) of the Act, dated 12.01.2024 but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “FINDINGS 7. The rival contentions have been carefully considered. In my considered opinion, the act of the appellant of paying tax prior to the issue of Notice u/s 148 cannot be attributed as \"Voluntary disclosure\", as the appellant herself admits that such action was taken only when she found out through newspaper articles that the courts/tribunals were taking adverse view on the issue of bogus LTCG claims. Thus, the appellant who was very well aware of her wrongdoing in claiming 5 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 incorrect exemption u/s 10(38) on bogus LTCG of Rs. 33,04,236 as a beneficiary of the widespread accommodation entry network involving Penny Stocks which were already exposed through extensive Investigations and search & seizure actions by the Income Tax department across the country. As remedial action in the hands of beneficiaries were being taken by the department in similar cases, thus, the appellant anticipated that sooner or later her actions would also be caught and thus decided to deposit the due tax evaded by claiming the exemption u/s 10(38) in the return filed originally u/s 139. Such subsequent act of paying the due tax cannot mitigate the deliberate default of concealment of true income committed by the appellant earlier so as to escape the levy of penalty, otherwise, it would give premium to dishonest taxpayers who try to take chances with the exchequer by first claiming bogus exemption for laundering their undisclosed income and then subsequently paying the due tax only when caught without any additional cost. 8. Further, this issue regarding levy of penalty u/s 271(1)(c), when the income was not declared in Original ITR but was declared later in the ITR filed u/s 148 or 139(5) has previously been decided in various judicial pronouncements which are quoted below for reference 1) If the act of concealment or furnishing of particulars of income is committed while filing original return, the revised return by itself would not mitigate the default- 171 ITR 390 All, 163 ITR 440 Raj, 32 ITR 677 Bom, 84 STC 271 Del, 96 STC 6 MP, 178 ITR 643 Pb,178 ITR 430 Ker, 186 ITR 571 SC. 2) If the revised return u/s 139(5) has been filed voluntarily before detection and conduct of 'A' is bona fide then penalty would not be leviable-100 JTR 524 Guj. 107 ITR 423 On, 129 ITR 703 Del 156 ITR 638 Mad. 145 12260 TR 5108 ITR 746 All, 113 ITR 74 Gau 31 D1553 ITR 259 Pb. 226 CTR 533 del 3) If revised 73/s filed after investigation by deptt. penalty can be levied-149 ITR 737 Ker, 110 ITR 602 Mad 4) If such return is filed under amnesty scheme or under any beneficial Circular, penalty cannot be levied.210 ITR 292 Raj, 131 ITR 643 Guj 6 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 5) If disclosure is not true in revised return, penalty can be levied. 172/575Guj 8.1. As per the ratio of the above judgments, Levy of penalty u/s 271(1)(c) depends on the facts of each case. If the revised return falls within the ambit of section 139(5) le to correct the bona fide mistake, penalty would not be leviable but if revised return is filed to cover the income detected by the revenue, then levy of penalty would be justified. 8.2 It is noted that the Hon'ble Supreme Court had an occasion to deal with similar issue in the case of Mak Data P. Ltd vs Commissioner Of Income Tax II, (2013) 358 ITR 593 (SC), the relevant part of the said judgment is extracted below for reference: 4. The department initiated penalty proceedings for concealment of income and not furnishing true particulars of its income under Section 271(1)(c) of the Income Tax Act. During the course of the hearing, the assessee contended that penalty proceedings are not maintainable on the ground that the AO had not recorded his satisfaction to the effect that there has been concealment of income/furnishing of inaccurate particulars of income by the assessee and that the surrender of income was a conditional surrender before any investigation in the matter. The AO did not accept those contentions and imposed a penalty of Rs.14.61.547/- under Section 217(1)(c) of the Act. The assessee challenged that order before the Commissioner of Income Tax (Appeals) by filing Appeal No.2/07-08, which was dismissed vide order dated 17.2.2010. The assessee filed an appeal being ITA No. 1846/Del/10 before the Income Tax Appellate Tribunal, Delhi. The Tribunal recorded the following findings:- \"The assessee's letter dated 22.11.2006 clearly mentions that \"the offer of the surrender is without admitting any concealment whatsoever or any intention to conceal. The Tribunal took the view that the amount of Rs.40,74,000/- was surrendered to settle the dispute with the department and since the assessee, for one reason or the other, agreed or surrendered certain amounts for assessment, the imposition of penalty solely on the basis of assessee's surrender could not be sustained. The Tribunal, therefore, allowed the appeal and set aside the penalty order. 5. The Revenue took up the matter in appeal before the High Court by filing ITA No.415 of 2012. The High Court accepted the plea of the Revenue that there was absolutely no explanation by the assessee for 7 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 the concealed income of Rs.40,74,000/-. The High Court took the view that in the absence of any explanation in respect of the surrendered income, the first part of clause (A) of Explanation 1 is attracted. Holding so, the judgment of the Tribunal was set aside and the appeal filed by the Revenue was allowed. 6. We have heard counsel on either side. We fully concur with the view of the High Court that the Tribunal has not properly understood or appreciated the scope of Explanation 1 to Section 271(1)(c) of the Act, which reads as follows:- “Explanation 1 - Where in respect of any facts material to the computation of the total income of any person under this Act,-- A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or B) Such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed.\" 7. The AO, in our view, shall not be carried away by the plea of the assessee like \"voluntary disclosure\", \"buy peace\", \"avoid litigation\", \"amicable settlement\", etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the Revenue to show that the amount in question constituted the income and not otherwise. 8. Assessee has only stated that he had surrendered the additional sum of Rs.40,74,000/- with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does 8 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 not recognize those types of defences under the explanation 1 to Section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the Appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961. 10. The AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of Section 271(1)(c) has also been elaborately discussed by this Court in Union of India vs. Dharmendra Textile Processors (2008) 13 SCC 369 and CIT vs. Atul Mohan Rindal (2000) SCC 580. 11. The principle laid down by this Court, in our view, has been correctly followed by the Revenue and we find no illegality in the department initiating penalty proceedings in the instant case. We, therefore, fully 9 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 agree with the view of the High Court. Hence, the appeal lacks merit and is dismissed. There shall be no order as to costs. 8.3 In the instant case, the appellant has failed to offer any satisfactory explanation for claiming the income of Rs. 33,04,236 as exempt u/s 10(38) in the original ITR filed u/s 139 and its subsequent withdrawal and offer as taxable income under the head Income from Other Sources' in the return filed in response to notice u/s 148, hence explanation 1 to section 271(1)(c) is attracted in this case. The investigation wing's report had already unearthed the LTCG arising on shares of the scrip 'Capital Trade Links' to be bogus being a penny stock and a mere accommodation entry to launder the unexplained own money of the beneficiaries. In such background, the claim of the appellant that its claim of exempt LTCG was genuine does not hold any force. If the claim was genuine, why did the appellant subsequently withdrew the claim and offered the same as taxable income from 'Other Sources'? Voluntary' disclosure to buy 'peace of mind' or to avoid litigation etc. have already been held by the Hon'ble Apex Court in the above quoted judgment in Mak Data case (supra) as no good defenses to avoid imposition of penalty u/s 271(1)(c). Thus, it is noted that judgment of Hon'ble SC in Mak Data P. Ltd vs Commissioner Of Income Tax II (supra) is squarely applicable in the instant case and respectfully following the judgment of the Apex court, the instant case is also found to be a fit case for levy of penalty. 9. The case laws relied upon by the appellant in her submissions have also been gone through, however the same are found to be not applicable to the instant case as discussed below: i) Judgment of Hon'ble Supreme court in CIT vs Suresh Chandra Mittal (SC) 251 ITR 0009 whereby the judgment of Hon'ble jurisdictional Madhya Pradesh High Court in [2000] 241 ITR 124 (MP) dated 20.07.1999 was upheld. In the said case, disclosure was made in revised return in pursuance of notice u/s 148 after search. Facts of that case show that revised returns were filed in respect of earlier years and not in respect of the year of search. Further, there was no search material in respect of earlier years. The revised returns were filed just to avoid litigation. On such facts, the Hon'ble High Court, following the Apex Court's decision in the case of Sir Shadilal 168 ITR 705 held that penalty was not leviable. This judgment has been affirmed by SC by passing a short order (251 ITR 9). 10 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 However, subsequently, the apex court in the case of K.P.Madhusudan 251 ITR 99 has held that decision in Sir Shadilal case (supra) is no more good law after insertion of Expl-1 to section 271(1)(c) inserting a deeming fiction in favour of presumption of concealment of income. Further, in the case of G.C.Aggarwal 186 ITR 571 SC, the Apex court upheld the levy of penalty where higher income was disclosed in revised return without any justification. In view of the above facts & the subsequent legal developments, the reliance of the appellant on the judgment in case of Suresh Chand Mittal (supra) is of no use to it. ii) CIT vs Rajib Garg (2009) 313 ITR 256 (P&H):- The said case law is not found applicable in the instant case as the facts of the case are distinguishable from those of the instant appeal in question. In the case-law referred to, the assessee had failed to file the ITR despite having taxable interest income from fixed deposits which was declared subsequently in the return filed in response to notice u/s 148 and the penalty levied u/s 271(1)(c) was deleted by the Hon'ble High Court, whereas in the instant case the appellant had claimed bogus Long Term Capital Gain in the return filed by it u/s 139(1), In the instant appeal, the appellant had deliberately tried to conceal her income by claiming bogus exemption, and is thus a case of active and deliberate concealment of income involving mens rea and thus attracting penal provisions u/s 271(1)(c). In view of the clear distinguishable facts, the referred case law is found not applicable to the instant case and, thus, does not come to the appellant's rescue. iii) Dy.CIT-1(1) Raipur vs Renu Behl order dated 11.12.2023 by ITAT, Raipur in ITA No.289/RPR/2022:- Perusal of the said order of Hon'ble Jurisdictional ITAT, Raipur Bench shows that the Hon'ble Tribunal upheld decision of the CIT(A) who deleted the penalty levied by the Assessing Officer u/s 271(1)(c) in similar facts by relying upon the judgment of the Hon'ble SC in the case of CIT vs Suresh Chandra Mittal (supra), which is no-more a good law as held by the Hon'ble SC itself in K.P.Madhusudan 251 ITR 99 case, as already discussed in preceding point (i). Further it is noted that in the above case, the revenue specifically pointed out an grounds of appeal itself the decision of Hon’ble Supreme Court in the case of Mak Data (P) Ltd vs CIT (supra) wherein the apex court has held that Voluntary disclosure does not release the assessee from 11 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 mischief of penal proceedings u/s 271(1)(c). However, perusal of referred ITAT order shows that the judgment of the Hon'ble Apex Court in KP Madhusudan (supra) and MAK Data (supra) cases was probably not brought to the attention of the Hon'ble ITAT as none of these very relevant judgments of the Apex Court are not found considered by the Tribunal. Thus, with due respect, this decision relied upon by the appellant is found to be 'per incuriam’ and ‘sub-silentio’ vis- a vis the aforesaid judgments of the Apex Court in the case of K.P.Madhusudan 251 ITR 99 case and Mak Data (P) Ltd vs CIT directly on the issue involved. In view of the same, the said order of the Hon'ble ITAT in Renu Behl case (supra) cannot be relied upon as a binding precedent. 10. Following the above discussions and respectfully following the judgment of the Apex court in the case of Mak Data P. Ltd vs Commissioner Of Income Tax II (supra), levy of impugned penalty u/s 271(1)(c) in the instant case is found justified. Accordingly, the impugned penalty of Rs. 10,90,397/- levied u/s 271(1)(c) by the AO is hereby upheld. Consequently, the appeal is hereby dismissed. 11. In the result, the appeal is dismissed.” 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 7. Shri Yogesh Sethia, Ld. Authorized Representative (for short ‘AR') for the assessee, at the threshold, submitted that both the lower authorities based on perverse observations had imposed/sustained penalty upon the assessee u/s. 271(1)(c) of the Act. Elaborating on his contention, the Ld. AR 12 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 submitted that the assessee in her return of income filed u/s. 139(1) of the Act, dated 29.03.2017 had raised a claim for exemption of Long Term Capital Gain (LTCG) on sale of shares of M/s Capital trade links u/s. 10(38) of the Act. The Ld. AR submitted that the assessee had thereafter, based on various news articles wherein it was brought to the notice of the public at large about the adverse views that were being taken by various courts regarding declining of unsubstantiated claims for exemption u/s. 10(38) of the Act, had on a suo-motto basis decided to pay tax on the capital gain arising on the sale of shares of M/s Capital trade links, which were claimed by her as exempt u/s 10(38) of the Act in her return of income. The Ld. AR submitted that as the assessee was senior citizen of 70 years of age, therefore, it was only with an intent to avoid protracted litigation that she had decided to withdraw the aforesaid claim for exemption that was raised by her in the return of income Carrying his contention further, the Ld. AR submitted that the assessee had thereafter, on 15.02.2019 deposited the taxes a/w. interest of Rs.10,90,690/- pertaining to the amount of capital gain on sale of shares of M/s Capital trade links (supra). The Ld. AR in order to fortify his aforesaid claim had taken us through the “Form 26AS” of the assessee for the year under consideration, Page 22-23 of APB. The Ld. AR submitted that the bonafides of the assessee could safely be gathered from the fact, that she being aware that she was not in a position to conclusively establish her claim for exemption of the capital gain on sale of shares of M/s 13 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 Capital trade links (supra), that was raised u/s. 10(38) of the Act by her in the return of income filed u/s. 139(1) of the Act, had way back as on 15.02.2019 i.e much prior to the issuance of notice u/s. 148 of the Act, dated 29.09.2022 paid the taxes on the said amount of capital gain The Ld. AR submitted that the very fact that the assessee had on a suo-motto basis paid the tax on the amount of capital gain clearly establishes her bonafide, and thus, as per “Explanation 1(B)” of Sec. 271(1)(c) of the Act was not liable to be penalized.. 8. Alternatively, the Ld. AR submitted that as the assessee pursuant to the notice u/s. 148 of the Act, dated 29.06.2022, had offered the income of Rs. 33.04 lacs (supra) arising on sale of shares of M/s Capital trade links for taxes in her return of income filed in compliance to the said notice, which, thereafter, had been accepted by the A.O who vide his order passed u/s. 147/144 of the Act, dated 11.05.2023 assessed her income at the same amount as was so returned by her, therefore, there remained no occasion for levying any penalty u/s. 271(1)(c) of the Act. The Ld. AR in support of his aforesaid contention had relied on the orders of the ITAT, Raipur in the case of DCIT-1(1), Raipur Vs. Renu Behl, ITA No.289/RPR/2022, dated 11.12.2023 and that of the ITAT, Jaipur in the case of Pooja Upadhyay Vs. ITO-5(1), Jaipur, ITA No.258/JP/2022, dated 17.04.2023. Also, the Ld. AR had pressed into service the order of the ITAT, Mumbai in the case of DCIT- 14 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 3(3)(1) Mumbai Vs. M/s. Reliance General Insurance Company Ltd., ITA Nos. 7245 to 7249/Mum/2016. 9. Shri Yogesh Sethia, Ld. AR based on his aforesaid contentions, submitted that on both the aforesaid counts, viz. (i) that the bonafide of the assesee who had on suo moto basis paid tax on the income arising from the sale of shares of M/s Capital trade links (supra) i.e. three years prior to initiation of proceedings u/s. 148 of the Act; and (ii) that as the assessee had disclosed the income on sale of shares in her return of income filed in compliance to notice issued by the A.O u/s. 148 of the Act, which, thereafter, had been accepted by the latter who had assessed her income at the same amount as was so returned by her; there was no justification for the lower authorities to have imposed/sustained penalty u/s. 271(1)(c) of the Act. 10. Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short “DR’) relied on the orders of the lower authorities. 11. Ostensibly, it is a matter of fact borne from record that the assessee as on 15.02.2019 had paid taxes a/w. interest of Rs.10,90,690/-. On a perusal of the return of income that was filed by the assessee in compliance to notice u/s. 148 of the Act, we find that the aforesaid amount of taxes of Rs.10,90,690/- (supra) had been deposited by her on 14.02.2019, which corresponds to the tax liability on the income arising from sale of shares in the said return, Page 2 to 6 of APB. We, thus, in the backdrop of the 15 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 aforesaid facts concur with the Ld. AR that though the assessee had in her original return of income filed u/s. 139(1) of the Act, dated 29.03.2017 raised a claim for exemption u/s. 10(38) of the Act of Rs.33.04 lacs (supra) on sale of shares of M/s Capital trade links, but she had thereafter, on her own voluntarily deposited the taxes corresponding to the aforesaid income on 14.02.2019 i.e. three years prior to issuance of notice u/s. 148 of the Act by the A.O. We, thus, find substance in the claim of the Ld. AR that as the assessee had voluntarily paid tax on the income arising on sale of shares of M/s Capital trade links i.e. way back three years prior to initiation of proceedings u/s. 148 of the Act by the A.O, therefore, the same clearly establishes her bonafides, which, thus, clearly brings her explanation within the meaning of the concession provided in “Explanation-1(B) of Section 271(1)(c) of the Act. 12. Alternatively, we also find substance in the Ld. AR’s contention that as the assessee in her return of income filed in compliance to notice u/s. 148 of the Act had included the income on sale of shares of M/s Capital trade links which, thereafter, had been accepted by the A.O vide his order u/ss. 147/144B of the Act dated 11.05.2023, as such, therefore, in absence of any amount having been added/disallowed while framing the said assessment, no penalty u/s. 271(1)(c) of the Act could have been imposed on her. We, say so, for the reason that the “Explanation 1” of Section 271(1)(c) pre-supposes an addition/disallowance made in the hands of the 16 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 assessee. Apart from that, the machinery provision contemplated in “Explanation 4” for computing the amount of penalty as per Section 271(1)(iii) of the Act, in absence of any addition/disallowance made in the course of assessment/reassessment proceedings is also rendered as unworkable. Our aforesaid view is fortified by the order of the Tribunal in the case of DCIT-1(1), Raipur Vs. Renu Behl, ITA No.289/RPR/2022, dated 11.12.2023, wherein the Tribunal involving identical facts had vacated the penalty imposed by the A.O on the assessee. For the sake of clarity, the observation of the Tribunal is culled out as under: “8. We have thoughtfully considered the issue, i.e., the sustainability of the view taken by the CIT(Appeals), who had vacated the penalty imposed by the A.O u/s. 271(1)(c) of the Act. As observed by the CIT(Appeals), and rightly so, as the assessee had offered LTCG on sale of 2500 shares of M/s. Blueprint Securities Ltd. as a part of her total income in the return of income filed in response to the notice u/s. 148 of the Act, therefore, the A.O., without establishing that the assessee had concealed her income, could not have saddled her with penalty u/s. 271(1)(c) of the Act. We, thus, in terms of our aforesaid observation, concur with the view taken by the CIT(Appeals), who had rightly vacated the penalty of Rs.2,26,861/- imposed by the A.O u/s. 271(1)(c) of the Act and uphold the same. 13. Also, we find that a similar view had been taken by the ITAT, Jaipur Bench in the case of Pooja Upadhyay Vs. ITO-5(1), Jaipur, ITA No.258/JP/2022, dated 17.04.2023, wherein after relying on the judgment of the Hon’ble High Court of Rajasthan in the case of CIT Vs. Puspendra Surana (2014) 264 CTR 204 (Raj), the Tribunal had held that as the assessee had declared the income from LTCG on sale of agricultural land in his revised return of income, which thereafter, was accepted by the 17 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 A.O and there was no material available on record by which it could be inferred that there was deliberate concealment on the part of the assessee, thus, there was no justification in imposing penalty u/s. 271(1)(c) of the Act. Also, a similar view had been taken by the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Rajib Garg (2009) 313 ITR 256 (P & H), wherein it was observed that as the additional income so offered by the assessee was done in good faith and to buy peace and the revenue had failed to establish the fact that the explanation of the assessee was not bona fide, thus, the deletion of the penalty by the Tribunal was approved. 14. We, thus, in terms of our aforesaid observations are unable to concur with the view taken by the lower authorities and, thus, set aside the order of the CIT(Appeals) and vacate the penalty of Rs.10,90,397/- imposed by the A.O u/s 271(1)(c) of the Act. Thus, the Ground of appeal raised by the assessee is allowed in terms of our aforesaid observations. 15. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in open court on 19th day of December, 2024. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th December, 2024. **SB, Sr. PS 18 Asha Soni Vs. DCIT, Circle-1, Bilaspur ITA No. 468/RPR/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT, Raipur-1 (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "