Shri Jashvantbhai Mohanbhai Patel, Surat V. The INcome Tax Officer, Ward-9(2), Surat

ITA 2525/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2116 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 12-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Deemed to accrue or arise in india; Agreed addition; Bonafide mistake; Ignorance of law
• Section: 271(1)(c); 143(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.2525/AHD./2014/SRT / ASSESSMENT YEAR: 2010-11 SHRI JASHVANTBHAI MOHANBHAI PATEL, 26, ALKAPURI SOCIETY, SUMUL DAIRY ROAD, KATARGAM, SURAT 395 003. [PAN: ACVPP 5214E] VS. INCOME TAX OFFICER, WARD-9(2), SURAT. ( / APPELLANT) ( !' /RESPONDENT) / ASSESSEE BY : SHRI MEHUL TALERA, C.A., /REVENUE BY : SHRI B.P.K. PANDA, SR. D.R /DATE OF HEARING : 12-04-2018 /DATE OF PRONOUNCEMENT : 26-04-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V, SURAT (CIT (A) FOR SHORT) DATED 26.06.2014 FOR THE ASSESSMENT YEAR (A.Y) 2010-11 IN FIRST APPEAL NO.CAS/V/47/2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLL OWS: 1. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HA S GRIEVOUSLY ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 2,15 ,340/- LEVIED U/S. 271(1)(C) OF THE ACT. 2 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL 2. THAT ON FACTS, EVIDENCE ON RECORD AND IN LAW, TH E ENTIRE PENALTY OUGHT TO HAVE BEEN DELETED AS PRAYED FOR. 3. BRIEF FACTS RAISING TO THIS APPEAL ARE THAT AN INFORMATION WAS RECEIVED THROUGH ASSESSEES REPRESENTATIVE (AR) THAT THE ASS ESSEE DURING THE RELEVANT FINANCIAL PERIOD, HAD SOLD IMMOVABLE PROPE RTY OF RS. 58,06,500/- AND THE SAME NOT SHOWN IN THE RETURN AND COMPUTATION OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS A SKED TO EXPLAIN AS TO WHY DUE CAPITAL GAIN TAX WAS PAID ON THE SAID SALE OF LAND AND ASSESSEE WAS SHOW CAUSED AS TO WHY THE SHORT TERM CAPITAL GAIN S HOULD NOT BE TAXED IN HIS HANDS FOR AY 2010-11. IN THE REPLY THE ASSESSEE SU BMITTED THAT THE ASSESSEE FORGOT TO PAY SHORT TERM CAPITAL GAIN ON T HE SALE OF LAND. ON CATEGORICAL ADMISSION OF ASSESSEE, DURING THE ASSES SMENT PROCEEDINGS ADDITION OF RS. 6,96,880/- WAS MADE TO THE TOTAL IN COME OF THE ASSESSEE UNDER THE HEAD OF SHORT TERM CAPITAL GAIN. THEREFO RE, THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAS CONCEALED THE PART ICULARS OF HIS INCOME, AND HENCE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF TH E ACT WERE INITIATED ON THE SAID ADDITION MADE BY ASSESSMENT ORDER DATED 22.02. 2013. 4. SUBSEQUENTLY, THE AO INITIATED PENALTY PROCEEDIN GS U/S. 271(1)(C) OF THE ACT AND NOTICE IN THIS REGARD WAS SERVED ON ASS ESSEE ON 04.03.2013 REQUESTING TO EXPLAIN AS TO WHY PENALTY U/S. 271(1) (C) OF THE ACT SHOULD NOT BE LEVIED. THE ASSESSEE SUBMITTED FOLLOWING REPLY TO THE ASSESSING OFFICER: ASSESSEE HAD NOT CONCEALED THE PARTICULAR OF INCOM E OR NOT FURNISHED INACCURATE PARTICULARS OF INCOME. THE ADDITION IS MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN OF RS. 6,96,880 WHICH IS AGAINST THE PROVISIONS OF THE ACT. 3 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL THE ADDITION IS DEBATABLE UNDER PROVISIONS OF THE A CT WHICH DOES NOT SAY THAT ASSESSEES HAS FURNISHED INACCURATE PARTICULARS OF I NCOME. WHEN A VIEW TO HAVE PEACE OF MIND AND TO AVOID FURT HER LITIGATION, WE ARE AGREED TO PAY TAX ON IT AND IT WAS A AGREED ADDITIO N DURING ASSESSMENT PROCEEDINGS SUBJECT TO CONDITION THAT NO PENALTY WI LL BE INITIATED AGAINST ON IT. CONCEALMENT PROVISION CANNOT BE INVOKED IN CASE OF SURRENDERED ADDITION IF SURRENDER IS MADE SPECIFICALLY ON CONDITION THAT NO PENALTY WILL BE LEVIED OR IF SURRENDER IS MADE WITH A VIEW TO BUY PEACE OR AVOID HARASSMENT OR LITIGATION. ITO V. MANJIT SINGH BALDEV SINGH COMMISSION AGENTS (1999) 69 ITD 197 (ARS. BRIJ BALA CHAUDHARY V. ITO (2003) 87 ITD 173 (LUCKH NOW). 5. REJECTING THE ABOVE SUBMISSION AND EXPLANATION O F THE ASSESSEE THE AO IMPOSED PENALTY OF RS. 2,15,336/- U/S. 271(1)(C) OF THE ACT WITH FOLLOWING CONCLUSION AND FINDINGS: (1) IT IS PROVED ON RECORD THAT THE ASSESSEE WAS LIABLE TO PAY TAX ON T HE SHORT TERM CAPITAL TAX OF RS. 6,96,880/- WHICH WAS NOT SHOWN BY THE ASSESSEE IN THE REGULAR BOOKS OF ACCOUNT THIS CONCEALMENT OF SHORT TERM CAPITAL GAIN OF RS 6,96, 880/- WAS ONLY DECTECTED BY THE REVENUE DURING THE ASSESSMENT PROCEEDING. THEREFORE THERE WAS CONFIRMED CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. (2) THE ASSESSEE HAS SUBMITTED THAT THE ABOVE ADDI TION WAS AN AGREED ADDITION, WHICH IS ALSO INCORRECT, AS IT IS VERY CR YSTAL CLEAR THAT THE ASSESSEE HAS NOT OFFERED SHORT TERM CAPITAL GAIN IN HIS BOOK S OF ACCOUNT THUS, THERE IS NO VOLUNTARY DISCLOSURE ON THE PART OF THE ASSESSEE , ON THE CONTRARY, IT IS A PROVEN CONCEALMENT DETECTED BY THE REVENUE (3) FURTHER, THE ASSESSEE HAS QUOATED SOME CASE LAW RELATING TO ADDITION WHICH IS SURRENDERED BY THE ASSESSEE. IN THIS CASE , THERE IS NO SURRENDER OF INCOME BY THE ASSESSEE, BUT THE ADDITION HAS BEEN M ADE ONLY AFTER ANALYSING THE FACT THAT THE ASSESSEE HAS NOT SHOWN SHORT TERM CAPITAL GAIN OF RS. 6,96,880/-. FURTHER, AS FAR AS LEVY OF PENALTY FOR CIVIL LIABILITIES IS CONCERNED, IF IS OBSERVED THAT MENS RIA, BEHIND THE CONCEALMENT, IS NOT A RELEVANT ISSUE AS PROCLAIMED BY THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA V/S DHARMENDRA TEXTILE PROCESSORS (SC)306 ITR 277. 4. FROM THE ABOVE FACTS, IT IS QUITE EVIDENT THA T ABOVE SHORT TERM CAPITAL GAIN OF RS. 6,96,880/- WHICH HAS NOT BEEN SHOWN BY THE A SSESSEE IN THE BOOKS OF ACCOUNT WOULD NEVER BE DISCLOSED BY- THE ASSESSEE, IF THE CASE HAD NOT COME UNDER THE SCRUTINY PROCEEDING. ACCORDINGLY, I CONS IDER, THE ABOVE INCOME OF RS. 6,96,880/- AS CONCEALED INCOME OF THE ASSESSEE' FOR A Y 2010-11 WITHIN THE STRAIGHT MEANING U/S. 271(1)(C) OF THE ACT. 4 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL 6. THE AGGRIEVED ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), BUT REMAINED EMPTY HANDED AS THE FIRST APPELLATE AUTHOR ITY CONFIRMED THE PENALTY BY OBSERVING AS FOLLOWS: 6.1 I HAVE CONSIDERED THE PENALTY ORDER AS WELL AS THE SUBMISSIONS OF THE APPELLANT. THE GROUNDS OF APPEAL GROUND NO. 1 PERTAINS TO LEVIED PENALTY OF RS. 6,96,880/- ON ACCOUNT OF SHORT TERM CAPITAL GAI N. ON PERUSAL OF THE DETAILS, IT IS OBSERVED THAT THE APPELLANT HAD SOLD AN IMMOVABLE PROPERTY O F RS. 5806500/-, BUT NO CAPITAL GAIN TAX WAS PAID. THE AP PELLANT SUBMITTED THAT HE FORGOT TO PAY STCG ON THE SALE OF THE ABOVE PROPERT Y. HE ADMITTED OF THE NON- PAYMENT OF THE STCG. THE APPELLANT SUBMITTED THAT D UE TO OVER SIGHT AND BONA FIDE INADVERTENT ERROR FORGOT TO OFFER FOR TAX THE ABOVE AMOUNT IN THE RETURN OF THE INCOME BECAUSE OF NO REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT. THE APPELLANT TO SUBMIT THAT WITH A VIEW TO HAVE PEACE OF MIND AND TO AVOID FURTHER LITIGATION WE ARE AGREED TO PA Y TAX ON IT AND IT WAS A AGREED ADDITION DURING ASSESSMENT PROCEEDING SUBJEC T TO CONDITION THAT NO PENALTY WILL BE INITIATED AGAINST ON IT. IT IS VERY EVIDENT AND CLEAR THAT THE APPELLANT HAD THE LIABILITY TO PAY STCG WHICH WAS N OT PAID. IT IS A SETTLED PRINCIPLE THAT THE IGNORANCE OF LAW IS NO EXCUSE. T HE CONTENTION OF THE APPELLANT THAT IN ORDER TO BUY PEACE OF MIND AND AV OID LITIGATE, THE APPELLANT HAD AGREED TO THE ADDITION IS DEVOID OF MERITS AND FACTS. THE APPELLANT RELIED ON CERTAIN CASE LAWS. THE CASE LAW RELIED UPON BY T HE APPELLANT HAVE BEEN PERUSED. THE FACTS AND CIRCUMSTANCES OF THE CASES A RE DIFFERENT AND THEREFORE, NOT APPLICABLE IN THE INSTANT CASE. 6.1.1 THE APPELLANT HAS CONTENDED THAT HE ADMITTE D THE INCOME TO BUY PEACE AND TO AVOID LITIGATION. THE SUBMISSION OF THE APPE LLANT IS DEVOID OF MERITS AND FACTS. THE APPELLANT WAS LIABLE TO STCG ON THE SALE OF THE PROPERTY BUT THE PAYMENT OF TAX WAS NOT MADE. IT WAS ONLY WHEN THE A PPELLANT WAS CONFRONTED BY THE AO, HE ADMITTED OF NOT PAYING THE TAXES ON T HE PRETEXT OF IGNORANCE OF LAW AND BONAFIDE MISTAKE. THE HON'BLE SUPREME COURT HAS SETTLED THIS ISSUE IN A RECENT JUDGMENT ON THE ISSUE OF ADMISSION OF U NDISCLOSED INCOME IN ORDER TO AVOID LITIGATION AND BUY PEACE OF MIND. IT HAS B EEN HELD IN VARIOUS JUDICIAL PRONOUNCEMENTS THAT SIMPLY BECAUSE ASSESSEE AGREED TO THE ADDITION OF CONCEALED INCOME AFTER DETECTION THEREOF, THE ASSES SES CANNOT ESCAPE PENALTY U/S 2?I(L)(C) OF THE ACT. THE SUPREME COURT HELD TH AT VOLUNTARY DISCLOSURE DOES NOT LEAD TO ASSESSEE BEING FREE FROM MISCHIEF OF PE NAL PROCEEDINGS UNDER SECTION 271(L)(C) IN MAK DATA (P.) LTD. V. CTT (2013) 38 TAXMANN.COM(448). THE APEX COURT HELD THAT EXPLANATION TO SECTION 271 (1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER. BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN TH EN SHIFT ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QU ESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. THE ASSESSING OFFICER SHA LL NOT BE CARRIED AWAY BY 5 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DISCLOSURE', 'BUY PEACE', 'AVOID LITIGATION', 'AMICABLE SETTLEMENT', ETC., TO EXPLAIN ITS CONDUCT. ASSESSEE HAD ONLY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM 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 INCOM E-TAX DEPARTMENT. STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER THE EXPLANATION 1 TO SECTION 271(1 )(C). IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT FREE THE ASSESSES FROM THE MISC HIEF OF PENAL PROCEEDINGS UNDER, SECTION 271(1)(C). THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CON CEALED INCOME, HE HAS TO BE ABSOLVED FROM PENALTY. THE SURRENDER OF INCOME I N THIS CASE WAS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE ASSESSING OFFICER. SIMILAR VI EW HAS BEEN EXPRESSED IN THE CASE OF BHARATKUMAR G RAJANI 40 TAXMANN.COM 344 (GUJ). 6.2.1 IT IS AN OBLIGATORY DUTY CAST UPON A PERSON FILING THE RETURN OF INCOME TO DISCLOSE ALL HIS INCOME DERIVED FROM ANY SOURCE UND ER VARIOUS HEADS AND INDICATE THE INCOME UNDER EACH HEAD, WHICH IS CHARG EABLE TO INCOME-TAX, AFTER MAKING THE PERMISSIBLE DEDUCTIONS. DISCLOSURE OF IN COME WOULD BE DISCLOSURE OF PARTICULARS OF INCOME, WHICH A PERSON IS DUTY BO UND TO DISCLOSE IN FULFILLMENT OF HIS STATUTORY OBLIGATIONS TO PAY TAX ON THE INCO ME CHARGEABLE TO TAX. AFTER THE RETURN IS FILED UNDER SECTION 139(1), THE ASSES SMENT OF TAX IS TO BE MADE AND FOR THE PURPOSE OF MAKING AN ASSESSMENT UNDER T HE ACT, THE ITO MAKES AN ENQUIRY CONTEMPLATED BY SECTION 142, UNDER WHICH NOTICE IS ISSUED ON THE PERSON WHO HAS MADE THE RETURN TO PRODUCE ACCOUNTS, DOCUMENTS OR FURNISH VERIFIED INFORMATION IN WRITING INCLUDING STATEMENT OF ALL ASSETS, ETC. HOWEVER, WHERE THE AO IS SATISFIED THAT THE RETURN IS CORREC T AND COMPLETE, AS WERE THE WORDINGS OF SECTION 143(1) AT THE RELEVANT TIME, HE HAS TO ASSESS THE TOTAL INCOME WITHOUT REQUIRING THE PRESENCE OF THE ASSESS ES OR PRODUCTION BY HIM OF ANY EVIDENCE THAT THE RETURN IS CORRECT AND COMPLET E, AS LAID DOWN IN SECTION 143(1). WHERE, HOWEVER, THE AC IS NOT SATISFIED WIT HOUT THE PRESENCE OF THE ASSESSEE OR PRODUCTION OF EVIDENCE THAT THE RETURN IS CORRECT AND COMPLETE, HE IS REQUIRED TO ISSUE NOTICE ENABLING THE ASSESSEE T O PRODUCE EVIDENCE ON WHICH HE MAY RELY IN SUPPORT OF THE RETURN. THE TO TAL INCOME IN SUCH CASES OF REGULAR ASSESSMENT IS, ASSESSED AFTER HEARING THE E VIDENCE ADDUCED AND CONSIDERING ALL MATERIAL GATHERED BY THE AO AS PROV IDED IN SECTION 143(3). IT, THEREFORE, FOLLOWS THAT IN THE ASSESSMENT PROCEEDIN GS UNDER SECTION 143, THE AO CAN FIND OUT WHETHER THE RETURN OF INCOME IS COR RECT AND TEMPLATE IF HE HOLDS THAT THE RETURN OF INCOME IS NOT CORRECT OR T HAT IT IS NOT COMPLETE IN RESPECT OF THE PARTICULARS OF INCOME WHICH ARE REQU IRED TO BE STATED IN THE RETURN, HE WILL REACH THE CORRECT FIGURE OF TOTAL I NCOME AND DETERMINE THE SUM PAYABLE BY THE ASSESSEE OR REFUNDABLE ON THE BASIS OF SUCH ASSESSMENT. IF THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, BY REASON OF OMISSION OR FAILURE O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT, REASSESSMENT PROCEEDING CAN BE INITIATED AS PROVIDE D UNDER SECTION 147. THIS AGAIN SHOWS THAT FULL AND TRUE DISCLOSURE OF I NCOME IS A PRIMARY OBLIGATION OF THE ASSESSEE. 6.2.2 IF A PERSON OBLIGED TO FURNISH THE PARTICULARS OF H IS INCOME OMITS TO FURNISH THEM, HE THEREBY CONCEALS THE PARTICULARS. THIS CONCEALMENT MAY TAKE VARIOUS FORMS. A GLARING ILLUSTRATION OF CONCEALMENT WOULD BE WHE RE THE 6 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL ASSESSEE DOES NOT DISCLOSE OR FULLY DISCLOSE IN THE RETURN THE INCOME DERIVED BY HIM WHICH WOULD FALL UNDER A PARTICULAR HEAD, E. G., INCOME FROM OTHER SOURCES WHILE DISCLOSING HIS INCOME FALLING UNDER O THER HEADS OF INCOME PRESCRIBED BY SECTION 14. TO THE EXTENT HE DOES NOT DISCLOSE THAT INCOME; HE CONCEALS THE PARTICULARS OF INCOME. THE OBLIGATION IS NOT ONLY TO DISCLOSE PARTICULARS OF INCOME BUT TO DISCLOSE THEM CORRECTL Y AND COMPLETELY. IF WHILE DISCLOSING THE PARTICULARS OF INCOME IN THE RETURN HE PUTS THEM UNDER A WRONG HEAD, HE CAN BE SAID TO BE FURNISHING INACCURATE PA RTICULARS OF INCOME. THE PARTICULARS OF INCOME CAN BE MADE INACCURATE IN A V ARIETY OF WAYS, A GLARING ILLUSTRATION OF WHICH WOULD BE WHERE THE ASSESSEE W HILE STATING THE INCOME UNDER A PARTICULAR HEAD, WORKS OUT THE INCOME CHARG EABLE TO TAX AFTER MAKING DEDUCTIONS WHICH ARE FALSELY MADE. SUCH A PROCESS W OULD MAKE THE PARTICULARS OF INCOME INACCURATE, IN ALL SUCH CASES , WHETHER THE INCOME IS NOT DISCLOSED AGAINST THE CONSTITUENT ITEM OF THE RETUR N IN WHICH IT FAILS OR IS PARTLY NOT DISCLOSED, OR THE PARTICULARS OF INCOME GIVEN I N THE RETURN ARE INCORRECTLY STATED BY ANY MACHINATION, THE IMPACT IS BOUND TO B E ON THE FIGURE OF GROSS TOTAL INCOME TO BE MENTIONED UNDER VARIOUS HEADS OF INCOME AND ALSO ON THE TOTAL INCOME CHARGEABLE TO TAX. IN FACT, REDUCING T HE FIGURE OF INCOME THAT WOULD BE CHARGEABLE TO TAX WOULD BE FOR THE PURPOSE OF CONCEALMENT OF PARTICULARS OF INCOME OR GIVING INACCURATE PARTICUL ARS OF INCOME. THE EXPRESSION 'PARTICULARS OF INCOME' WOULD HAVE RELEV ANCE TO ALL THE PARTICULARS OF INCOME WHICH THE ASSESSES IS REQUIRE D TO GIVE IN HIS RETURN FULLY AND TRULY, INCLUDING THE PARTICULARS OF INCOM E CHARGEABLE TO TAX UNDER VARIOUS HEADS AND THE TOTAL INCOME, THEREFORE , ANY CONCEALMENT OR INACCURACY IN THE PARTICULARS OF INCOME IN THE R ETURN OCCURRING AT ANY STAGE UP TO AND INCLUSIVE OF THE ULTIMATE STAGE OF WORKING OUT OF TOTAL INCOME, WOULD ATTRACT THE PENALTY PROVISION OF SECT ION 271(L)(C) OF THE ACT. EVERY FIGURE IN THE RETURN WHICH IS SET OPPOSITE T O THE ITEM OF INCOME IS A PARTICULAR OF INCOME, WHETHER THE FIGURE IS ONE WHI CH I'S STATED INDEPENDENT OF ANYTHING ELSE THAT APPEARS IN THE RETURN OR THE DOC UMENTS ACCOMPANYING IT OR WHETHER IT IS SOMETHING DERIVED FROM OTHER FIGURES ELSEWHERE STATED M SUCH RETURN OR DOCUMENTS. FALSE RESULT MAY BE PRODUCED B Y THE FALSITY OF ONE OR MORE OF THE CONSTITUENT ITEMS IN THE RETURN. THE WO RDS INACCURATE PARTICULARS' WOULD COVER FALSITY IN THE FINAL FIGURE AS ALSO THE CONSTITUENT ELEMENTS OR ITEMS. THEY SIMPLY WOULD MEAN INACCURATE IN SOME SPECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBORDINATE ITEMS OF INCOME OR THE END RESULT. 6.2.3 IT IS CLEAR THAT THE PROCEEDINGS CAN BE INIT IATED UNDER SECTION 271(1) ONLY IF THE AO IS SATISFIED IN THE COURSE OF ANY PR OCEEDINGS UNDER THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE EXPRESSI ON USED IN CLAUSE (C ) IS HAS CONCEALED THE PARTICULARS OF HIS INCOME' OR 'F URNISHED INACCURATE PARTICULARS OF SUCH INCOME THEREFORE, BOTH IN CASES OF CONCEALMENT AND INACCURACY, THE PHRASE PARTICULARS OF INCOME' IS US ED. IT WILL BE NOTED THAT AS REGARDS CONCEALMENT, THE EXPRESSION IN CLAUSE (C) I S HAS CONCEALED THE PARTICULARS OF HIS INCOME' AND NOT 'HAS CONCEALED H IS INCOME'. IT IS OBVIOUS THAT THE PENAL PROVISIONS WOULD OPERATE WHEN THERE IS A FAILURE OF DUTY TO DISCLOSE FULLY AND TRULY PARTICULARS OF INCOME, IMPOSED UNDE R THE ACT AND THE RULES THERE UNDER. THE DUTY IS ENJOINED UPON A PERSON TO MAKE A CORRECT AND COMPLETE DISCLOSURE OF HIS INCOME AND IT IS ONLY WH EN HE FAILS IN HIS DUTY BY NOT DISCLOSING HIS INCOME OR PART THEREOF, HE CONCE ALS THE PARTICULARS OF HIS INCOME. THE DUTY IS ENJOINED UPON HIM TO MAKE A COM PLETE DISCLOSURE OF HIS INCOME AS WELL AS A CORRECT DISCLOSURE. THEREFORE, IF THE DISCLOSURE MADE OF THE 7 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL PARTICULARS OF INCOME IS INCORRECT, THEN ALSO HE CO MMITS BREACH OF HIS DUTY, SUCH DEFAULTS ENTAIL THE PENAL CONSEQUENCES CONTEMP LATED BY SECTION 271(1)(C). THE APPELLANT WAS NOT FORTHCOMING IN THE DECLARATION OF THE TRUE AND CORRECT INCOME WHICH IS APPARENT FROM THE FACT THAT THE STCG TRANSACTIONS WERE NOT DISCLOSED IN THE RETURN OF INCOME. THE PRO VISIONS OF SEC, 271(L)(C) ALSO INCLUDES DEEMED INCOME, THE POSITION OF LAW WI TH REGARD TO LEVY OF PENALTY U/S 271(1)(C) HAS UNDERGONE A SUBSTANTIAL C HANGE AFTER THE INSERTION OF EXPLANATION (1) TO SECTION 271(1)(C) W.E.F 01.04.19 76. EXPLANATION (1) TO SECTION 271(1)(C) RAISES A PRESUMPTION THAT AS AND WHEN ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME THE SAM E SHALL BE DEEMED OR REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. SIMILAR VIEW HAS BEEN EXPRESSED IN THE CASE OF A.M. SHAH & CO. VS CIT (GUJ) 238 ITR 415 . 6.2.4 IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT IS EVIDENT THAT THE APPELLANT HAD DELIBERATELY AND INTENTIONALLY NOT DISCLOSED TH E TRUE AND CORRECT INCOME AND HAD CONCEALED THE STCG WITH THE INTENTION TO EV ADE TAX. HENCE, THE AO HAS RIGHTLY IMPOSED THE PENALTY U/S 271(L)(C) AND T HE IMPOSITION OF PENALTY IS UPHELD AND GROUND OF APPEAL IS DISMISSED. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBU NAL. THE LD. AR SUBMITTED THAT THE ASSESSEE VOLUNTARILY SURRENDERED THE AMOUN T OF SHORT TERM CAPITAL GAIN DURING THE ASSESSMENT PROCEEDINGS TO BUY PEACE OF MIND AND TO TERMINATE THE LITIGATION WITH A CONDITION THAT NO P ENALTY SHALL BE IMPOSED AGAINST THE ASSESSEE ON THE ALLEGATION OF CONCEALME NT OF INCOME AS THERE WAS NO DELIBERATE ATTEMPT BY THE ASSESSEE TO CONCEA L PARTICULARS OF HIS INCOME AND THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS INCLUDING DECISION OF HON'BLE SUP REME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS P. LTD. V. CIT REPORTED AS 348 ITR 306 (SC), WHEREIN PENALTY WAS DELETED IN THE SITUATION THAT I N THE ASSESSEES TAX AUDIT REPORT IT WAS INDICATED THAT PROVISION TOWARDS PAYM ENT OF GRATUITY WAS NOT ALLOWABLE BUT THE ASSESSEE FAILED TO ADD PROVISION TO ITS TOTAL INCOME. THE LD. AR ALSO SUBMITTED THAT AS PER ORDER OF ITAT, KOLKAT A IN THE CASE OF DCT V. 8 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL M/S. P.C. CHANDRA (JEWELLERS), PVT. LTD. REPORTED A S [2018] (2) TMI 503 (ITAT, KOLKATA) ON INADVERTENT MISTAKE COMMITTED BY THE ASSESSEE D O NOT WARRANT THE IMPOSITION PENALTY U/S. 271(1)(C) OF TH E ACT. 8. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) SUBMITTED THAT THE RATIO OF DECISION OF HON'BLE SUP REME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. (SUPRA) IS NOT AVAILABLE FOR THE ASSESSEE AS FACTS AND CIRCUMSTANCES OF PRESENT CASE IS THAT THE ASSESSEE DID NOT SHOWN TRANSACTION OF SALE OF LAND AND CONCEALED THE PARTICULARS OF HIS INCOME FROM SAID SALE OF LAND BEING TAXABLE UNDER THE HEAD OF SHORT TERM CAPITAL GAIN. THE LD. DR SUBMITTED THAT THE AO WAS RIGHT I N IMPOSING PENALTY AND SAME WAS RIGHTLY CONFIRM BY THE LD. CIT(A). THE LD . AR ALSO SUBMITTED THAT THE PENALTY IMPOSED BY THE AO IS QUITE CORRECT AND SUSTAINABLE IN VIEW OF DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. ZOOM COMMUNICATION P. LTD. 191 TAXMAN 179 (DEL) AND DECISION OF HON'BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF A.M. SHAH AND CO. V. CIT 238 ITR 415 (GUJ) AS THE ASSESSEE HAS NOT SHOWN INCOME FROM SALE OF LAND WHICH IS A CLEAR AND CONSCIOUS MALAFIDE ACT OF CONC EALMENT OF PARTICULARS OF INCOME WHICH ATTRACTS PENALTY U/S. 271(1)(C) OF THE ACT. 9. THE LD. DR ALSO SUBMITTED THAT THE ORDER OF ITAT , AMRITSAR IN THE CASE OF ITO V. MANJIT SINGH BALDEV SINGH COMMISSION AGENTS [1999] 69 ITD 197 (AMRITSAR) THE ADDITION WAS MADE BASED ON THE CALCULATION OF THE PEAK OF CREDIT AND SURRENDERED BY THE APPELLANT AND IN THIS SITUATION, IT WAS HELD THAT 9 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL THE ALLEGATION OF CONCEALMENT FOR INVOKING PROVISIO N OF U/S. 271(1)(C) OF THE ACT IN THE CASE OF SURRENDERED ADDITION CANNOT BE A LLEGED AGAINST THE ASSESSEE IF SURRENDER IS MADE SPECIFICALLY ON CONDI TION THAT NO PENALTY WILL BE LEVIED OR IF SURRENDER IS MADE WITH A VIEW TO BUY P EACE OF MIND AND AVOID HARASSMENT OR LITIGATION. THE LD. AR VEHEMENTLY PO INTED OUT THAT THE RATIO OF ORDER OF ITAT, AMRITSAR IS NOT APPLICABLE IN FAVOUR OF THE ASSESSEE AS IN THE PRESENT CASE THE ASSESSEE HAS NOT SHOWN TRANSACTION OF SALE OF LAND WHICH YIELD SHORT TERM CAPITAL GAIN FOR THE ASSESSEE AND PARTICULARS OF SUCH TRANSACTION WAS CONCEALED BY THE ASSESSEE AND WHEN HE WAS SHOW CAUSED BY THE AO ON THE BASIS OF AIR INFORMATION THEN HAVI NG NO EXPLANATION THE ASSESSEE AGREED TO THE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN FROM SAID TRANSACTION OF SALE OF LAND. THEREFORE, THE L D. DR STRENUOUSLY CONTENDED THAT THE RATIO OF THE DECISIONS RELIED BY THE LD. A R IS NOT FAVOURING THE CASE OF ASSESSEE BEING HAVING DISTINCT FACTS AND CIRCUMSTAN CES. 10. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS, FIRST OF ALL, FROM THE ASSESSMENT ORDER DATED 22.02.2013 PARA 3, IT IS CLEAR THAT THE AO NOTICED THAT THE ASSESSEE HAS JOINTLY SHOWED AN IMMOVABLE P ROPERTY FOR RS. 58,06,500/- ON 24.07.2009 DURING A.Y 2010-11 OUT OF WHICH PROPORTIONATE SHARE OF ASSESSEE WAS RS. 12,77,430/- AND THE SAME WAS NOT DISCLOSED IN THE RETURN OF INCOME. ON 01.02.2013 THE ASSESSEE F ILED COPY OF PURCHASE DEED AND SALE DEED AND THE AO ALSO NOTICED THAT THE ASSESSEE HAS SHOWN PROPORTIONATE COST OF PURCHASE IN THE BALANCE SHEET FOR AY 2009-10 BUT THE 10 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL ASSESSEE HAS NOT SHOWN SHORT TERM CAPITAL GAIN ACCR UED TO HIM ON SALE OF SUCH PROPERTY DURING PRESENT AY 2010-11 AND WHEN TH E ASSESSEE WAS SHOW CAUSED HE STATED THAT DUE TO IGNORANCE OF THE FACT THE ASSESSEE FORGOT TO PAY SHORT TERM CAPITAL GAIN ON THE ABOVE SALE. ON ABOV E ADMISSION, THE AO MADE ADDITION TO THE INCOME OF THE ASSESSEE ON ACCO UNT OF SHORT TERM CAPITAL GAIN OF RS. 6,96,880/-. SUBSEQUENTLY, THE AO INITI ATED PENALTY PROCEEDINGS AND IMPOSED PENALTY U/S. 271(1)(C) OF THE ACT BY HO LDING THAT FROM THE FACTS, IT IS QUITE EVIDENT THAT SHORT TERM CAPITAL GAIN OF RS . 6,96,880/-, WHICH HAS NOT SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WOUL D NEVER BE DISCLOSED BY THE ASSESSEE, IF THE CASE HAD NOT COME UNDER SCR UTINY PROCEEDINGS. THEREAFTER, THE AO HELD THAT THE ASSESSEE HAD CONCE ALED PARTICULARS OF INCOME WITHIN THE MEANING OF U/S. 271(1)(C) OF THE ACT WHICH ATTRACTS PENALTY UNDER THE SAID PROVISION. THIS PENALTY ORDER WAS C ONFIRMED BY THE LD. CIT(A) BY HOLDING THAT THE APPELLANT HAD DELIBERATELY AND INTENTIONALLY NOT DISCLOSED THE TRUE AND CORRECT INCOME AND HAD CONCEALED THE S HORT TERM CAPITAL GAIN WITH AN INTENTION TO EVADE TAX THEREON. 11. IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, AS NOTED ABOVE, AND FINDINGS ARRIVED BY THE AUTHORITIES BELOW, WE ARE O F THE CONSIDERED VIEW THAT IT IS A CLEAR CASE OF CONCEALMENT PARTICULARS OF INCOM E BY THE ASSESSEE AS WHEN THE ASSESSEE IS SHOWING PURCHASE OF LAND IN TH E BALANCE SHEET FOR AY 2009-10 AND SUBSEQUENTLY WHEN THE LAND WAS SOLD DUR ING AY 2010-11 THE TRANSACTION OF SALE OF LAND WAS NOT DISCLOSED TO TH E REVENUE AUTHORITIES AND 11 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL SHORT TERM CAPITAL GAIN ACCRUED THERE FROM WAS ALSO NOT DISCLOSED AND OFFERED TO TAX IN THE RETURN OF INCOME. IN THIS SITUATION, THE EXPLANATION OF THE ASSESSEE THAT THE TRANSACTION OF SALE OF LAND WAS N OT SHOWN DUE TO IGNORANCE OF FACT AND ASSESSEE FORGOT TO PAID SHORT TERM CAPI TAL GAIN IS NOT TENABLE AND ACCEPTABLE. IF SUCH KIND OF EXPLANATION AND SUBMISS IONS ARE ACCEPTED AGAINST IMPOSITION OF PENALTY THEN IT WOULD RESULT INTO MAKING THE PROVISIONS OF IMPOSITION OF PENALTY AS IN EFFECTIVE AND REDUND ANT. THE BENEFIT OF THE RATIO OF DECISION OF HON'BLE SUPREME COURT IN THE C ASE OF PRICE WATERHOUSE COOPERS (SUPRA) IS NOT AVAILABLE FOR THE ASSESSEE AS IN TH AT CASE THE ASSESSEE DID NOT CONSIDER THE FACT THAT PROVISION F OR GRATUITY IS NOT ALLOWABLE AND THE SAME WAS NOT ADDED TO THE TOTAL INCOME OF T HE ASSESSEE WHILE COMPUTING THE TAX LIABILITY DUE TO INADVERTENT ERRO R AND THIS EXPLANATION WAS ACCEPTED BY HON'BLE APEX COURT DELETING THE PENALTY . BUT IN THE PRESENT CASE THE ASSESSEE HAS NOT SHOWN TRANSACTION OF SALE OF LAND AND SHORT TERM CAPITAL GAIN ACCRUED TO HIM FROM SUCH TRANSACTION O F PROPERTY INSPITE THE FACT THAT THE ASSESSEE HAS SHOWN PURCHASE OF LAND IN HIS BALANCE SHEET DURING A.Y 2009-10 IN THE BALANCE SHEET, BUT THE LAND WAS SOLD IN SUBSEQUENT AY 2010-11 THE TRANSACTION WAS NOT DECLARED IN THE RET URN AND THE SHORT TERM CAPITAL GAIN WAS NOT OFFERED TO TAX. THUS, EXPLANAT ION OF ASSESSEE THAT IT WAS NOT SHOWN DUE TO INADVERTENT MISTAKE IS NOT ACCEPTA BLE AND SUSTAINABLE. HENCE, IN VIEW OF RATIO LAID DOWN BY HON'BLE SUPREM E COURT IN THE CASE OF UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 (SC) PENALTY U/S. 271(1)(C) OF THE ACT IS LEVIABLE ON THE ASSESS EE. THE AO WAS RIGHT IN 12 ITA NO.2525/AHD./2014/SRT (A.Y: 2010-11) SH RI JASHVANTBHAI MOHANBHAI PATEL IMPOSING PENALTY ON THE ALLEGATION OF CONCEALMENT O F INCOME AND THE SAME WAS CORRECTLY UPHELD BY THE LD. CIT(A). WE ARE UNA BLE TO SEE ANY VALID REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORIT IES BELOW AND THUS WE UPHOLD THE SAME CONFIRMING THE PENALTY. ACCORDINGL Y, GROUNDS OF ASSESSEE BEING DEVOID OF MERITS ARE DISMISSED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH APRIL, 2018. / SURAT ; DATED : 26 TH APRIL, 2018 EDN ! $ / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. # ( ) / THE CIT(A)- V, SURAT; 4. PRL. CIT, SURAT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE. / BY ORDER, // TRUE COPY// ) / ASSISTANT REGISTRAR , / ITAT, SURAT SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER