SHRI HARISH KUMAR VASWANI, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR

ITA 1040/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0119 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 10-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P P MEENA JCIT A
• Keywords: Initiation of penalty proceedings; Wrong claim; Ignorance of law
• Section: 271(1)(c); 143(3); 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1040/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SHRI HARISH KUMAR VASWANI 31, DHULA HOUSE ROAD, BABU BAZAR, JAIPUR. CUKE VS. THE DCIT, CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AATPK 6505 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.P.MEENA (JCIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/12/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-I, JAIPUR DATED 07.08.2018 FOR ASSESSMENT YE AR 2014-15 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF RS. 4 LACS U/S 271(1)(C) OF THE IT ACT, 1961. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 2 2. THE LD AR SUBMITTED THAT THE AO INITIATED THE PE NALTY PROCEEDINGS IN ORDER U/S 143(3) DATED 11.07.2016 BY STATING THA T SHOW CAUSE NOTICE U/S 271(1)(C) R.W.S 274 OF THE ACT IS ISSUED FOR CO NCEALMENT OF INCOME/FURNISHING INACCURATE PARTICULAR OF INCOME. IN THE NOTICE ISSUED U/S 274 DATED 11.07.2016, IT IS STATED THAT ASSESSE E APPEARS TO HAVE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCU RATE PARTICULARS OF INCOME WITHOUT SPECIFYING WHETHER THE CHARGE IS FOR CONCEALMENT OF INCOME OR FOR BOTH. IN THE PENALTY ORDER DATED 27.0 1.2017, IT IS STATED THAT ASSESSEE IS FOUND GUILTY OF FURNISHING INACCUR ATE PARTICULARS OF INCOME AND THEREFORE, PENALTY U/S 271(1)(C) IS IMPO SED ON THE CONCEALED INCOME. THUS, ON SUCH VAGUE NOTICE ISSUED U/S 271(1)(C) AND FINDING GIVEN IN THE PENALTY ORDER, PENALTY IS NOT LEVIBLE. IN SUPPORT, RELIANCE WAS PLACED ON VARIOUS DECISIONS INCLUDING DECISION IN CASE OF CIT VS. SSAS EMERALD MEADOWS (2016) 242 TAXMAN 180 (SC), CIT VS. M/S MANJUNATHA COTTON & GINNING FACTORY & ORS. 359 ITR 565 (KAR.) AND DECISION OF THE THIRD MEMBER OF THE TRIBUNAL IN CASE OF HPCL MITTAL ENERGY LTD. VS. ACIT IN ITA NO. 554 & 555/ASR/2014 DATED 07.05.2018. 3. IN ORDER TO APPRECIATE THE AFORESAID CONTENTIONS OF THE LD AR, WE REFER TO THE FACTS OF THE CASE. THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 17,66,330/- WHEREIN H E HAS DISCLOSED INCOME UNDER THE HEAD LONG TERM CAPITAL GAINS AMO UNTING TO RS. 9,01,537/- AFTER CLAIMING DEDUCTION U/S 54 OF T HE ACT AMOUNTING TO RS. 17,80,000/-. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, ON PERUSAL OF INFORMATION FURNISHED BY THE ASSESSEE, T HE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED DEDUCTION U/S 54 OF THE ACT ON ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 3 ACCOUNT OF INVESTMENT MADE TOWARDS PURCHASE OF SHOP AGAINST SALE OF SHOP DURING THE YEAR UNDER CONSIDERATION. ON BEING ASKED AS TO WHY THE EXEMPTION CLAIMED OF RS. 17,80,000/- U/S 54 OF THE ACT ON ACCOUNT OF PURCHASE OF COMMERCIAL PROPERTY MAY NOT BE DISAL LOWED AND ADDED BACK TO THE TOTAL INCOME, THE ASSESSEE SUBMITTED A REVISED COMPUTATION OF TOTAL INCOME VIDE LETTER DATED 01.07.2016 WHEREI N IT WAS SUBMITTED THAT THE ASSESSEE WAS IN BONA FIDE BELIEF THAT THE EXEMPTION ALLOWABLE NOT ONLY FOR RESIDENTIAL HOUSE BUT ON ALL TYPE OF P ROPERTIES AND HAS WRONGLY CLAIMED EXEMPTION WHICH IS HEREBY SURRENDER ED AND THE AMOUNT OF TAX HAS BEEN DULY DEPOSITED. 4. THE AO HOWEVER HELD THAT IF THE ASSESSMENT PROCE EDINGS WERE NOT INITIATED U/S 143(3) OF THE ACT, THE INCOME TO THE EXTENT OF RS. 17,80,000/- WOULD HAVE REMAINED UNTAXED AND IT WAS HELD THAT THE ASSESSEE HAS DELIBERATELY CONCEALED HIS INCOME TO THE EXTENT OF RS. 17,80,000/- AND SAME WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AND SEPARATELY PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT FOR FILING OF INACCURATE OF PARTICULARS OF INCOME/C ONCEALMENT OF INCOME WERE INITIATED BY WAY OF ISSUE OF NOTICE U/S 271(1) (C) OF THE ACT. 5. ON PERUSAL OF THE PENALTY NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 11.07.2016, IT IS STATED THEREIN THAT IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2014- 15, IT APPEARS TO ME THAT YOU HAVE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND A SHOW CAUSE W AS ISSUED AS TO WHY THE ORDER IMPOSING AFORESAID PENALTY SHOULD NOT BE MADE AS PER PROVISIONS OF THE INCOME TAX ACT. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 4 6. WE NOW REFER TO THE PENALTY ORDER DATED 27.01.2 017 WHERE IN PARA 2.2, THE AO HELD AS UNDER: 2.2 THE ASSESSEE, IN ITS ORIGINAL COMPUTATION DELI BERATELY AVOIDED DISCLOSING TRUE PARTICULARS AND FURNISHED INACCURA TE PARTICULARS BY CLAIMING WRONG EXEMPTION U/S 54, WHICH WAS AS SUCH NOT AVAILABLE TO THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCE S PECULIAR TO THE PRESENT CASE I.E. (A) THE ASSESSEE HAS CLEARLY FURNISHED INACCURATE P ARTICULARS IN RESPECT OF EXEMPTION U/S 54 OF RS. 17,80,000/- AND DELIBERA TELY SHOWN AS EXEMPT U/S 54 IN ORDER TO SUPPRESS HIS INCOME. (B) AS SUCH, WHERE PARTICULARS ARE DISCLOSED BUT SU CH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT WOULD AMOUNT TO FURN ISHING OF INACCURATE PARTICULARS OF INCOME. (C) HAD THE CASE NOT BEEN SLEEVED FOR SCRUTINY, THE SAID AMOUNT OF RS. 17,80,000/- WOULD HAVE BEEN REMAINED OUT OF AMBIT F ROM TAX LIABILITY. THE CASE OF THE ASSESSEE IS A CLEAR CASE OF FURNISH ING INACCURATE PARTICULARS OF INCOME. HENCE, THE ASSESSEE IS LIABL E FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT FOR THE AMOUNT OF RS. 17,80,000/- AND THEREAFTER IN PARA 3, THE AO HAS HELD THAT IN V IEW OF TOTALITY OF THE FACTS AND KEEPING IN VIEW THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT, THE ASSESSEE IS FOUND GUILTY OF FURNISHING INACCURA TE PARTICULARS OF INCOME TO THE EXTENT OF AMOUNT OF RS. 17,80,000/- A ND FOR THAT REASONS HE IS SATISFIED THAT ASSESSEE HAS COMMITTED DEFAULT U/S 271(1)(C) OF THE IT ACT AND, THEREFORE, PENALTY U/S 271(1)(C) IS IMP OSED ON THE CONCEALED INCOME WHICH WAS DETERMINED AT RS. 4 LACS AND THE PENALTY ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 5 ORDER WAS ISSUED AFTER SEEKING NECESSARY APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX. ON APPEAL, THE LD. CIT( A) HAS CONFIRMED THE SAID LEVY OF PENALTY. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. 8. REGARDING THE CONTENTION OF THE LD. AR IN CONTE XT OF ISSUE OF VAGUE NOTICE AND VAGUE FINDINGS GIVING IN THE PENAL TY ORDER, WE FIND THAT A SIMILAR ISSUE HAS BEEN DEALT WITH BY THIS BE NCH IN CASE OF SMT. SHIPRA JAIN AND ORS. VS. ACIT (ITA NO. 922/JP/2018 & OTHERS DATED 31.10.2018) WHEREIN WE HAVE EXAMINED THE ISSUE AT LENGTH IN CONTEXT OF VARIOUS AUTHORITIES (INCLUDING THOSE WHI CH HAVE BEEN RELIED IN THE INSTANT CASE BY THE LD AR) AND OUR FINDINGS ARE CONTAINED AT PARA 4.2 TO 4.5 WHICH ARE REPRODUCED AS UNDER:- 4.2 NOW COMING TO THE FIRST CONTENTION SO RAISED B Y THE LD. AR THAT IN THE ABSENCE OF ANY SPECIFIC CHARGE AGAINST THE ASSE SSEE IN THE PENALTY NOTICE AND SUBSEQUENTLY IN THE PENALTY ORDER, CONSE QUENT PENALTY IMPOSED BY AO IS ILLEGAL AND BAD IN LAW. WE FIND TH AT EXPLANATION 5A TO SECTION 271(1)(C) IS A DEEMING PROVISION AND SUBJEC T TO FULFILLING THE REQUISITE CONDITIONS, IT DEEMS THE ASSESSEE TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME SIMILAR TO WHAT HAS BEEN PROVIDED IN CLAUSE (C) TO SECTION 271(1) OF THE ACT. IN SEARCH CASES AS WELL, THE LE GISLATURE HAS THUS ENVISAGED APPLICABILITY OF ONE OR BOTH OF THESE CHA RGES. IT IS SETTLED POSITION NOW AS HELD BY CATENA OF JUDICIAL PRONOUNC EMENTS THAT THE ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 6 NOTICE INITIATING THE PENALTY PROCEEDINGS SHOULD SP ECIFY THE CHARGE AGAINST THE ASSESSEE AND EVEN WHERE THE CHARGE IS U NCERTAIN AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS, SUBSEQUE NTLY DURING THE PENALTY PROCEEDINGS, THE AO MUST GET DECISIVE, WHIC H SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE A SSESSEE IS GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHI NG OF INACCURATE PARTICULARS OF SUCH INCOME'. 4.3 IN THIS REGARD, USEFUL REFERENCE CAN BE DRAWN T O THE DECISION OF THE COORDINATE BENCH IN CASE OF HPCL MITTAL ENERGY VS ADD. CIT REPORTED IN 96 TAXMAN.COM 3 WHERE THE MATTER WAS RE FERRED TO THE THIRD MEMBER TO DECIDE ON THE ISSUE AS TO 'WHETHER, IN CASE WHERE THE SATISFACTION OF THE AO WHILE INITIATING PENALTY PRO CEEDINGS U/S. 271(L)(C) OF THE INCOME-TAX ACT, 1961 IS WITH REGARD TO ALLEG ED CONCEALMENT OF INCOME BY THE ASSESSEE, WHEREAS THE IMPOSITION OF T HE PENALTY IS FOR 'CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF I NCOME', THE LEVY OF PENALTY IS NOT SUSTAINABLE?'. AFTER ANALYZING CATENA OF JUDICIAL PRONOUNCEMENTS I NCLUDING THE DECISIONS WHICH HAVE BEEN CITED BY THE LD AR, THE C OORDINATE BENCH SPEAKING THROUGH THE THIRD MEMBER HAS HELD AS UNDER : 9. ON AN ANALYSIS OF THE FACTUAL MATRIX NARRATED A BOVE, IT IS MANIFESTED THAT THE AO RECORDED SATISFACTION QUA TH E THREE ITEMS OF DISALLOWANCE/ADDITIONS LEADING TO PENALTY, AS 'C ONCEALMENT OF INCOME' IN ALL THE ASSESSMENT ORDERS; INITIATED PEN ALTY IN ALL THE FOUR CASES BY TREATING THEM AS COVERED UNDER THE EX PRESSION 'CONCEALMENT OF PARTICULARS OF INCOME'; AND THEN FI NALLY PASSED ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 7 PENALTY ORDERS ON THE ASSESSEES FINDING THEM GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING IN ACCURATE PARTICULARS OF SUCH INCOME'. AS AGAINST THAT, THE A CTUAL POSITION IS THAT ALL THE THREE ITEMS OF DISALLOWANCE/ADDITIONS FALL ONLY UNDER THE CATEGORY OF 'FURNISHING OF INACCURATE PARTICULA RS OF INCOME'. NOW THE QUESTION ARISES IF THE PENALTY IS SUSTAINAB LE IN SUCH CIRCUMSTANCES? 10. AT THIS JUNCTURE, IT IS PERTINENT TO NOTE THAT PEN ALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEE DINGS. MERELY BECAUSE AN ADDITION HAS BEEN MADE OR CONFIRMED IN T HE ASSESSMENT, DOES NOT, PER SE, LEAD TO IMPOSITION OF PENALTY U/S. 271(L)(C). PENALTY PROCEEDINGS ARE SEPARATELY INITI ATED ON CONCLUSION OF THE ASSESSMENT, IN WHICH THE ASSESSEE IS GIVEN AN OPPORTUNITY TO EXPLAIN HIS POSITION QUA THE IMPOSIT ION OF PENALTY ON THE ADDITIONS/DISALLOWANCES MADE IN THE ASSESSME NT. THE AO CONSIDERS THE EXPLANATION OF THE ASSESSEE AND THEN DECIDES IF THE PENALTY IS IMPOSABLE OR NOT. FURTHER, THE OPINION O F THE AO AS TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME HAS TO BE SEEN WITH REFE RENCE TO THE DAY ON WHICH HE INITIATES/IMPOSES PENALTY. LATER EV ENTS, LIKE CONFIRMATION OR DELETION OF ADDITIONS/DISALLOWANCES IN QUANTUM APPEALS, ARE IRRELEVANT IN THIS CONTEXT. 11. IT TRANSPIRES FROM THE ABOVE DISCUSSION THAT, INSO FAR AS THE ISSUE BEFORE ME IS CONCERNED, THERE ARE BROADLY TWO DIFFERENT STAGES HAVING BEARING ON THE IMPOSITION OF PENALTY, NAMELY, ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 8 ASSESSMENT AND PENALTY. AT THE ASSESSMENT STAGE, TH E AO HAS TO RECORD A SATISFACTION IN THE ASSESSMENT ORDER AS TO WHETHER THE ADDITIONS/DISALLOWANCES, ON WHICH PENALTY IS LIKELY TO BE IMPOSED, REPRESENT CONCEALMENT OF PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME. THERE CAN BE TWO SUB-STAGES IN PENALTY PROCEEDINGS REQUIRING THE AO TO RECORD SUCH SATISFACTION, VIZ., AT THE TIME OF INITIATING THE PENALTY PROCEED INGS AND AT THE TIME OF PASSING THE PENALTY ORDER. I WILL DEAL WITH SUCH TWO STAGES IN THE PRESENT CONTEXT. (A) RECORDING OF SATISFACTION AT THE ASSESSMENT STA GE. 12. IT HAS BEEN NOTICED HEREINABOVE THAT THE FIRST STA GE OF IMPOSITION OF PENALTY IS RECORDING OF SATISFACTION BY THE AO IN THE ASSESSMENT ORDER AS TO WHETHER THE ASSESSEE CONCEAL ED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. THERE WAS A LOT OF LITIGATION ON THIS POINT . THE ASSESSEES WERE CONTENDING BEFORE THE APPELLATE COURTS THAT TH E AO HAD NOT RECORDED PROPER SATISFACTION IN THE ASSESSMENT ORDE R AND HENCE THE PENALTY SHOULD BE DELETED. ON THE OTHER HAND, T HE DEPARTMENT WAS CONTENDING THAT THE SATISFACTION WAS PROPERLY RECORDED. CONSIDERING THE MAGNITUDE OF LITIGATION O N THE POINT, THE FINANCE ACT, 2008, INSERTED SUB-SECTION (1B) TO SECTION 271, W.R.E.F. 1.4.1989, WHICH RUNS AS UNDER: 'WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTI NG THE TOTAL INCOME OR LOSS OF AN ASSESSEE IN ANY ORDER OF ASSES SMENT OR REASSESSMENT AND THE SAID ORDER CONTAINS A DIRECTIO N FOR INITIATION OF PENALTY PROCEEDINGS UNDER CLAUSE (C) OF SUB-SECT ION (1), SUCH ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 9 AN ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE DEE MED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FO R INITIATION OF THE PENALTY PROCEEDINGS UNDER THE SAID CLAUSE (C).' 13. THE EFFECT OF THIS INSERTION IS THAT WHEN AN AMOUN T IS ADDED OR DISALLOWED IN AN ASSESSMENT AND THE ORDER CONTAI NS A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(L)(C ), IT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE AO FOR INI TIATION OF THE PENALTY PROCEEDINGS. CRUX OF THE NEW PROVISION IS T HAT A MERE DIRECTION IN THE ASSESSMENT ORDER TO INITIATE PENAL TY PROCEEDINGS UNDER CLAUSE (C) IS SUFFICIENT TO CONCLUDE THAT THE AO RECORDED PROPER SATISFACTION AS TO WHETHER THE ADDITIONS/DIS ALLOWANCES ARE 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHI NG OF INACCURATE PARTICULARS OF INCOME' OR BOTH. IT IS INCORRECT TO ARGUE THAT EVEN AFTER THE INSERTION OF SUB-SECTION (1B), THE AO STI LL NEEDS TO SPECIFICALLY RECORD AS TO WHETHER EACH ITEM OF ADDITION/DISALLOWANCE IS A CASE OF CONCEALMENT OF P ARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. DEEMING 'SATISFACTION' UNDER CLAUSE (C) IN TERMS OF SUB-SEC TION (1B) MEANS DEEMING 'PROPER SATISFACTION' AND 'PROPER SATISFACT ION' MEANS GETTING SATISFIED AS TO WHETHER IT IS A CASE OF CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. IT CANNOT BE CONCEIVED THAT A DIRECTIO N TO INITIATE PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER IS ONLY 'SATISFACTION' AND NOT 'PROPER SATISFACTION'. THIS CONTENTION, IF TAKEN TO A LOGICAL CONCLUSION, WOULD MEAN THAT AFTER SUCH A DIRECTION IN THE ASSESSMENT ORDER CONSTITUTING HIS SATISFACTION, THE AO SHOULD ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 10 ONCE AGAIN SPECIFICALLY RECORD SATISFACTION WITH RE FERENCE TO EACH ADDITION OR DISALLOWANCE AS TO WHETHER IT IS A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. IT IS OBVI OUSLY AN ABSURD PROPOSITION AND GOES AGAINST THE UNAMBIGUOUS LANGUA GE OF THE PROVISION. THUS, IT IS OVERT THAT AFTER INSERTION O F SUB-SECTION (1B) TO SECTION 271, INVARIABLY, THE AO SHOULD BE DEEMED TO HAVE RECORDED PROPER SATISFACTION WITH REFERENCE TO EACH ADDITION/DISALLOWANCE AS TO CONCEALMENT OR FURNISHI NG OF INACCURATE PARTICULARS, ONCE A DIRECTION IS CONTAIN ED IN THE ASSESSMENT ORDER TO INITIATE PENALTY U/S. 271(L)(C) OF THE ACT. REQUIRING THE RECORDING OF SEPARATE SATISFACTION, O NCE AGAIN, BY THE AO WOULD MILITATE AGAINST THE DEEMING PROVISION CONTAINED IN SUB-SECTION (1B). ADMITTEDLY, IN ALL THE FOUR APPEA LS UNDER CONSIDERATION, THE AO DIRECTED TO INITIATE PENALTY U/S. 271(L)(C) OF THE ACT IN THE ASSESSMENT ORDERS. THUS, THE REVENUE CAN BE SAFELY CONSIDERED TO HAVE SUCCESSFULLY PASSED OUT T HE FIRST STAGE. (B) RECORDING OF SATISFACTION AT THE PENALTY STAGE 14. IT HAS BEEN NOTED ABOVE THAT PENALTY PROCEEDINGS A RE SEPARATE FROM ASSESSMENT PROCEEDINGS, WHICH GET KIC KED WITH THE ISSUE OF NOTICE U/S. 274 AND CULMINATE IN THE PENAL TY ORDER U/S. 271(L)(C) OF THE ACT. MANY A TIMES, PENALTY INITIAT ED IN THE ASSESSMENT ORDER ON ONE OR MORE COUNTS BY MEANS OF NOTICE U/S. 274, IS NOT EVENTUALLY IMPOSED BY THE AO ON GETTING SATISFIED WITH THE EXPLANATION TENDERED BY THE ASSESSEE IN THE PEN ALTY PROCEEDINGS. IN ANY CASE, CONFRONTING THE ASSESSEE WITH THE CHARGE AGAINST HIM IS SINE QUA NON FOR ANY VALID PE NALTY ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 11 PROCEEDINGS. IT IS ONLY WHEN THE ASSESSEE IS MADE A WARE OF SUCH A CHARGE AGAINST HIM THAT HE CAN PRESENT HIS SIDE. THUS PRESCRIBING THE CHARGE IN THE PENALTY NOTICE AND PE NALTY ORDER IS MUST. ABSENCE OF A CHARGE IN THE PENALTY NOTICE OR NOT FINDING THE ASSESSEE GUILTY OF A CLEAR OFFENCE IN THE PENALTY O RDER, VITIATES THE PENALTY ORDER. 15. THE MOOT QUESTION IS THAT WHAT SHOULD BE THE NATUR E OF SPECIFICATION OF A CHARGE BY THE AO AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS AND AT THE TIME OF PASSING THE PENALTY ORDER. IS THE AO REQUIRED TO SPECIFY IN THE PENALTY NOTICE /ORDER AS TO WHETHER IT IS A CASE OF 'CONCEALMENT OF PARTICULARS OF INCOME'; OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME'; O R BOTH OF THEM, WHICH CAN BE EXPRESSED BY USING THE WORD 'AND' BETW EEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF CONCEALMENT OF PARTICULARS OF INCOME, HE MUST SPECI FY IT SO IN THE NOTICE AT THE TIME OF INITIATION OF PENALTY PROCEED INGS AND ALSO IN THE PENALTY ORDER. THE AO CANNOT INITIATE PENALTY O N THE CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME', BUT ULTI MATELY FIND THE ASSESSEE GUILTY IN THE PENALTY ORDER OF 'FURNISHING INACCURATE PARTICULARS OF INCOME'. IN THE SAME MANNER, HE CANN OT BE UNCERTAIN IN THE PENALTY ORDER AS TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY USING SLASH BET WEEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', H E MUST AGAIN SPECIFY IT SO IN THE NOTICE AT THE TIME OF INITIATI ON OF PENALTY PROCEEDINGS AND ALSO IN THE PENALTY ORDER. AFTER IN ITIATING PENALTY ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 12 ON THE CHARGE OF 'FURNISHING OF INACCURATE PARTICUL ARS OF INCOME', HE CANNOT IMPOSE PENALTY BY FINDING THE ASSESSEE GU ILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME'. AGAIN, HE C ANNOT BE UNCERTAIN IN THE PENALTY ORDER AS TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY USING SLASH BET WEEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF IMPOSITION OF PENALTY U/S. 271(L)(C) OF THE ACT ON TWO OR MORE ADDITIONS/DISALLOWANCES, ONE OR MORE FALLING UNDER THE EXPRESSION 'CONCEALMENT OF PARTICULARS OF INCOME' AND THE OTHE R UNDER THE 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', H E MUST SPECIFY IT SO BY USING THE WORD 'AND' BETWEEN THE TWO EXPRESSI ONS IN THE NOTICE AT THE TIME OF INITIATION OF PENALTY PROCEED INGS. IF HE REMAINS CONVINCED IN THE PENALTY PROCEEDINGS THAT T HE PENALTY WAS RIGHTLY INITIATED ON SUCH COUNTS AND IMPOSES PE NALTY ACCORDINGLY, HE MUST SPECIFICALLY FIND THE ASSESSEE GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME' AND ALSO 'FU RNISHING OF INACCURATE PARTICULARS OF INCOME' IN THE PENALTY OR DER. IF THE CHARGE IS NOT LEVIED IN THE ABOVE MANNER IN ALL THE THREE CLEAR-CUT SITUATIONS DISCUSSED ABOVE IN THE PENALTY NOTICE AN D ALSO IN THE PENALTY ORDER, THE PENALTY ORDER BECOMES UNSUSTAINA BLE IN LAW. 16. THE HON'BLE KARNATAKA HIGH COURT IN CIT V. MANJUNA THA COTTON AND GINNING FACTORY [2013] 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 HAS HELD THAT A PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD B E MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSI NG PENALTY ON HIM AS SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 13 CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPOR TUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE C ONDITIONS STIPULATED IN SECTION 271(L)(C) DO NOT EXIST AS SUC H HE IS NOT LIABLE TO PAY PENALTY. THE HON'BLE HIGH COURT WENT ON TO H OLD THAT: 'CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, THAT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME.... BUT DRAWING UP PENALTY PR OCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOT HER OFFENCE OR FINDING HIM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW.. THUS ONCE THE PROCEEDINGS ARE I NITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON T HE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALT Y PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID'. 17. IN MANU ENGG. WORKS (SUPRA) PENALTY WAS IMPOSED BY NOTING: 'THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME '. STRIKING DOWN THE PENALTY, THE HON'BLE HIGH COURT HELD THAT: 'IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME H AD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR-CUT FINDIN G WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' 18. IN PADMA RAM BHARALI (SUPRA), THE HON'BLE HIGH COU RT DID NOT SUSTAIN PENALTY LEVIED U/S. 271(L)(C) WHEN: 'TH E INITIATION OF ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 14 THE PENALTY PROCEEDING WAS FOR CONCEALMENT OF THE P ARTICULARS OF INCOME. BUT THE TRIBUNAL FINALLY HELD THAT THE ASSE SSEE WOULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR TO HAVE FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.' 19. THUS IT IS EVIDENT THAT WHEN THE AO IS SATISFIED A T THE STAGE OF INITIATION OF PENALTY PROCEEDINGS OF A CLEAR-CUT CHARGE AGAINST THE ASSESSEE IN ANY OF THE THREE SITUATIONS DISCUSS ED ABOVE (SAY, CONCEALMENT OF PARTICULARS OF INCOME), BUT IMPOSES PENALTY BY HOLDING THE ASSESSEE AS GUILTY OF THE OTHER CHARGE (SAY, FURNISHING OF INACCURATE PARTICULARS OF INCOME) OR AN UNCERTAI N CHARGE (CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME), THE PENALTY CANNOT BE SUSTA INED. 20. ANOTHER CRUCIAL FACTOR TO BE KEPT IN MIND IS THAT THE SATISFACTION OF THE AO AS TO A CLEAR-CUT CHARGE LEV ELED BY HIM IN THE PENALTY NOTICE OR THE PENALTY ORDER MUST CONCUR WITH THE ACTUAL DEFAULT. IF THE CLEAR-CUT CHARGE IN THE PENA LTY NOTICE OR THE PENALTY ORDER IS THAT OF 'CONCEALMENT OF PARTICULAR S OF INCOME', BUT IT TURNS OUT TO BE A CASE OF 'FURNISHING OF INACCUR ATE PARTICULARS OF SUCH INCOME' OR VICE-VERSA, THEN ALSO THE PENALTY O RDER CANNOT LEGALLY STAND. 21. APART FROM THE ABOVE THREE SITUATIONS IN WHICH THE AO HAS CLEAR-CUT SATISFACTION, THERE CAN BE ANOTHER FO URTH SITUATION AS WELL. IT MAY BE WHEN IT IS DEFINITELY A CASE OF UNDER-REPORTING OF INCOME BY THE ASSESSEE FOR WHICH AN ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 15 ADDITION/DISALLOWANCE HAS BEEN MADE, BUT THE AO IS NOT SURE AT THE STAGE OF INITIATION OF PENALTY PROCEEDI NGS OF THE PRECISE CHARGE AS TO 'CONCEALMENT OF PARTICULAR S OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME'. IN SUCH CIRCUMSTANCES, HE MAY USE SLASH BETWEEN THE TWO EXPRESSIONS AT THE TIME OF INITIATI ON OF PENALTY PROCEEDINGS. HOWEVER, DURING THE PENALTY PROCEEDINGS, HE MUST GET DECISIVE, WHICH SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE A SSESSEE IS GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOM E'. UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENAL TY, MUST NECESSARILY BE SUBSTITUTED WITH A CONCLUSIVE DEFAUL T AT THE TIME OF PASSING THE PENALTY ORDER. IF THE PENALTY I S INITIATED WITH DOUBT AND ALSO CONCLUDED WITH A DOUB T AS TO THE CONCEALMENT OF PARTICULARS OF INCOME OR FURN ISHING OF INACCURATE PARTICULARS OF SUCH INCOME ETC., THE PENALTY ORDER IS VITIATED. IF ON THE OTHER HAND, IF THE PEN ALTY IS INITIATED WITH AN UNCERTAIN CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PART ICULARS OF INCOME' ETC., BUT THE ASSESSEE IS ULTIMATELY FOU ND TO BE GUILTY OF A SPECIFIC CHARGE OF EITHER 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', THEN NO FAULT CAN BE FOUND IN THE PENALTY ORDER. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 16 22. IN MANU ENGINEERING WORKS (SUPRA), THE HON'BLE GUJ ARAT HIGH COURT NOTICED THAT THE CHARGE AT THE STAGE OF INITI ATION OF PENALTY PROCEEDINGS AS WELL IN THE PENALTY ORDER WAS UNCERT AIN AND THE EXPRESSION USED AT BOTH THE STAGES WAS CONCEALMENT OF PARTICULARS OF INCOME AND/OR FURNISHING OF INACCURA TE PARTICULARS OF SUCH INCOME. IT STRUCK DOWN THE PENALTY BY HOLDI NG THAT THE ASSESSEE MUST HAVE BEEN FOUND TO BE GUILTY OF A CER TAIN CHARGE IN THE PENALTY ORDER. IT, HOWEVER, DID NOT FIND ANYTHI NG AMISS WITH THE INITIATION OF PENALTY ON SUCH UNCERTAIN CHARGE, WHICH IS VIVID FROM THE FOLLOWING OBSERVATIONS : 'WE FIND FROM THE ORDER OF THE IAC, IN THE PENALTY PROCEEDINGS, THAT IS, THE FINAL CONCLUSION AS EXPRESSED IN PARA. 4 OF THE ORDER: 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID T HAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FINISHE D INACCURATE PARTICULARS OF SUCH INCOME'. NOW, THE LANGUAGE OF ' AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER O R FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME H AD BEEN FURNISHED BY THE ASSESSEE.' 23. IT IS THUS EVIDENT THAT UNCERTAIN CHARGE AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS CAN BE MADE GOOD WITH A CLEAR-CUT CHARGE IN THE PENALTY ORDER. IN ANY CASE, EXISTENCE OF A CLEAR-CUT CHARGE IN PENALTY ORDER IS A MUST SO AS TO VALIDATE ANY PENALTY ORDER. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 17 4.4 IN THE INSTANT CASE, THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION IN RESPECT OF THE FIVE ITEMS OF DISALL OWANCE/ADDITIONS INCLUDING UNDISCLOSED INVESTMENT ON CONSTRUCTION OF HOUSE AMOUNTING TO RS 938,800 LEADING TO PENALTY, AS 'CONCEALMENT OF I NCOME' IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R/W 15 3A, THEREAFTER INITIATED PENALTY BY ISSUANCE OF NOTICE U/S 274 R/W 271 DATED 21.30.2014 IN RESPECT OF ALL THE FIVE ITEMS OF DISA LLOWANCE/ADDITIONS BY TREATING THEM AS COVERED UNDER THE EXPRESSION CONC EALMENT PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF IN COME AND THEN FINALLY PASSED THE IMPUNGED PENALTY ORDER U/S 271(1)(C) IN RESPECT OF UNDISCLOSED INVESTMENT ON CONSTRUCTION OF HOUSE AMO UNTING TO RS 134,025 (TO THE EXTENT SUSTAINED BY THE LD CIT(A) O UT OF RS 938,800) AND LEVIED PENALTY U/S 271(1)(C) AMOUNTING TO RS 45 ,555 BY STATING AS UNDER: 6. IN VIEW OF ABOVE STATED FACTS AND LEGAL POSITIO N, THE ASSESSEE UNDER CONSIDERATION IS, CLEARLY LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT IS IMPOSED UPON HIM AS PER FOLLOWING COMPUTATION:- TOTAL UNDISCLOSED/CONCEALED INCOME LIABLE TO PENALT Y U/S 271(1)(C) RS. 1,34,025 PENALTY IMPOSABLE (100% OF TAX SOUGHT TO EVADED) PENALTY IMPOSABLE (300% OF TAX SOUGHT TO EVADED) RS. 45,555/- RS. 1,36,665/- PENALTY LEVIED (100% OF THE TAX SOUGHT TO EVADED R S. 45,555/- IN VIEW OF THE ABOVE, A PENALTY OF RS. 45,555/- IS HEREBY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. ISSUED D EMAND NOTICE. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 18 4.5 IT IS THUS A CASE WHERE THE AO HAS RECORDED THE SATISFACTION IN THE ASSESSMENT ORDER STATING THAT THE ASSESSEE HAS CONCEALED HIS PARTICULARS OF INCOME WHEREBY THE ASSESSEE HAS NOT DISCLOSED HIS INVESTMENT IN CONSTRUCTION OF THE HOUSE TO THE EXTE NT OF EXPENDITURE INCURRED DURING THE PREVIOUS YEAR RELEVANT TO IMPUN GED ASSESSMENT YEAR. THEREFORE, THE NOTICE INITIATING THE PENALTY PROCEEDINGS IS UNCERTAIN WHERE HE USES THE EXPRESSION CONCEALMENT PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. HOWEVER, DURING THE PENALTY PROCEEDINGS, HE HAS GIVEN A DECISIVE FI NDING AS REFLECTED IN THE PENALTY ORDER THAT THE ASSESSEE IS GUILTY OF 'C ONCEALMENT OF PARTICULARS OF INCOME' BY NOT DISCLOSING THE INVEST MENT IN THE CONSTRUCTION OF HIS HOUSE. AS HELD BY THE COORDINA TE BENCH (SUPRA), THE UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENAL TY HAS BEEN MADE GOOD AND SUBSTITUTED WITH A CONCLUSIVE DEFAULT AT T HE TIME OF PASSING THE PENALTY ORDER AND THAT IN SUCH A CASE, NO FAULT CAN BE FOUND IN THE PENALTY ORDER. IN SUCH A CASE, WE DONOT SEE ANY I NFIRMITY IN THE PENALTY ORDER SO PASSED BY THE ASSESSING OFFICER AN D THE CONTENTIONS SO RAISED BY THE LD AR IN THIS REGARD ARE NOT ACCEPTED . 9. IN THE INSTANT CASE, WE FIND THAT THE NOTICE IN ITIATING THE PENALTY PROCEEDINGS IS UNCERTAIN WHERE THE AO USES THE EXPR ESSION CONCEALMENT PARTICULARS OF INCOME OR FURNISHED INA CCURATE PARTICULARS OF INCOME. HOWEVER, DURING THE PENALTY PROCEEDINGS , HE HAS GIVEN A DECISIVE AND CLEAR FINDING AS REFLECTED IN THE PENA LTY ORDER THAT THE ASSESSEE IS GUILTY OF FURNISHING INACCURATE OF PART ICULARS OF INCOME' AS THE ASSESSEE, IN ITS ORIGINAL COMPUTATION HAS DELIB ERATELY AVOIDED ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 19 DISCLOSING TRUE PARTICULARS AND FURNISHED INACCURAT E PARTICULARS BY CLAIMING WRONG EXEMPTION U/S 54, WHICH WAS AS SUCH NOT AVAILABLE TO THE ASSESSEE. THEREFORE, FOLLOWING THE LEGAL PROPOS ITION AS DISCUSSED ABOVE, WE ARE UNABLE TO ACCEDE TO THE AFORESAID CON TENTION OF THE LD AR. 10. FURTHER, REGARDING THE CONTENTIONS OF THE LD A R ON MERITS, WE HAVE GONE THROUGH THE COMPUTATION OF INCOME SO FILE D BY THE ASSESSEE ALONG WITH THE ORIGINAL RETURN OF INCOME WHEREIN TH E ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS OF RS 9,01,537 AND HA S CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT AMOUNTING TO RS 17,80,000. THE COMPUTATION SO FILED IS SILENT ON THE NATURE AND SP ECIFICS OF THE PROPERTY SO PURCHASED BY THE ASSESSEE. THERE IS THUS CLEARL Y LACK OF DISCLOSURE AS FAR AS NATURE OF PROPERTY SO PURCHASED BY THE AS SESSEE. ON EXAMINATION THEREOF, THE AO HAS FOUND THAT THE ASSE SSEE HAS SOLD AN IMMOVEABLE PROPERTY IN FORM OF A SHOP AND HAS PURCH ASED ANOTHER SHOP AND WHICH IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 54 OF THE ACT. IT IS THUS NOT A CASE WHERE THERE IS ADEQUATE DISCLOSURE OF NATURE OF PROPERTY IN THE RETURN OF INCOME AND IT IS ONLY THE LEGAL CLAIM SO MADE BY THE ASSESSEE U/S 54 ON APPRECIATION OF SUCH FACTS WHICH HAS BEEN DENIED BY THE AO. THEREFORE, IT IS CLEAR CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME AND WE SEE NO INFI RMITY IN THE FINDINGS OF THE AO IN THIS REGARD. 11. REGARDING THE CONTENTION OF THE LD AR THAT THE ASSESSEE HAS SUO- MOTO REVISED THE COMPUTATION OF INCOME AND EVEN PAI D THE TAXES DURING ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 20 THE COURSE OF ASSESSMENT PROCEEDINGS, WE ARE UNABLE TO ACCEDE TO THE SAID CONTENTIONS OF THE LD AR AND THE FOLLOWING FIN DINGS OF THE LD CIT(A) CONTAINED IN PARA 3.1.2 (II) ARE HEREBY CONFIRMED: (II) THE CONTENTION OF THE APPELLANT THAT THE RETU RN OF INCOME WAS FILED BY THE ACCOUNTANT AND HE WAS NOT AWARE OF THE PROVISIONS OF THE ACT IS DEVOID OF ANY MERIT AS IT IS TRITE LAW THAT IGNORANCE OF LAW IS NO EXCUSE. FURTHER, THE APPELLA NT HAS NOT FILED ANY DOCUMENTARY EVIDENCE TO SUPPORT ITS CONTE NTION. IT WAS ANOTHER CONTENTION OF THE APPELLANT THAT THE FIRST NOTICE WAS ISSUED TO THE APPELLANT TO ATTEND ON 20-06-2016 CAL LING DOCUMENT OF PROPERTY SALES CONSIDERATION AS THE SAL E CONSIDERATION FOR SALE OF PROPERTY IN ITR WAS LESS THAN CONSIDERATION REPORTED ALONG WITH DETAILS OF OTHER INCOME AND THE AO HAS NEITHER ASKED FOR CAPITAL GAIN NOR GIVEN ANY NOTICE FOR CAPITAL GAINS. IT WAS FURTHER SUBMITTED THAT IT HAS FILED WRITTEN REPLY BEFORE THE AO THAT IT HAS WRONGLY CLA IMED THE DEDUCTION U/S 54, HENCE FILED THE REVISED COMPUTATI ON OF INCOME AND SURRENDERED THE AMOUNT OF LONG TERM GAIN FOR TA XATION. THEREFORE, THE FACTS WERE SUBMITTED BY IT ON FIRST HEARING ITSELF AND NOT DETECTED BY AO AND THUS, THE AO COULD NOT P ROVE THAT THE DEDUCTION WAS CLAIMED DELIBERATELY. IT WAS ONLY A MISTAKE AS WRONG DEDUCTION WAS CLAIMED AND NOT ANY CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. IT IS TO BE NOTED THAT THE CASE WAS SELECTED FOR LIMITED SCRUTINY AND THE AO HAS ASKED THE APPELLANT TO FURNISH THE DOCUMENTS RELATI NG TO SALE AND PURCHASE OF PROPERTIES DURING THE YEAR UNDER CO NSIDERATION. THE APPELLANT HAS FILED REVISED COMPUTATION OF INCO ME AS ITS ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 21 WRONG CLAIM WOULD HAVE SEEN THE LIGHT OF THE DAY AS SOON AS IT FILE THESE DOCUMENTS REQUIRED BY THE AO. THUS, IT C AN BE SAID THAT THE FILING OF REVISED COMPUTATION OF INCOME WAS NOT VOLUNTARILY AND IT REVISED ITS COMPUTATION OF INCOME ONLY WHEN CORNERED BY THE AO. THERE IS NO AMBIGUITY IN THE PROVISIONS OF SECTION 54 OF THE ACT THAT THE DEDUCTION UNDER SAID SECTION CAN B E CLAIMED ONLY ON THE PURCHASE OR CONSTRUCTION OF A RESIDENTIAL PR OPERTY AND NOT FOR PURCHASE OF A COMMERCIAL PROPERTY. THE APPELLAN T HAS MADE A PATENT WRONG CLAIM, WHICH CANNOT BE ALLOWED TO IT A S PER THE CLEAR PROVISIONS OF SECTION 54 OF THE ACT. 12. BEFORE PARTING, WE MAY ADD THAT WE HAVE GONE T HE OTHER DECISIONS WHICH HAVE BEEN RELIED UPON BY THE LD AR AND FIND THAT THE SAME DOESNT SUPPORT THE CASE OF ASSESSEE. 13. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRE TY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER LEVYING PENALT Y U/S 271(1)(C) IS HEREBY CONFIRMED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/12/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06/12/2018. ITA NO. 1040/JP/2018 SHRI HARISH KUMAR VASWANI VS.DCIT 22 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HARISH KUMAR VASWANI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1040/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.