Case Note & Summary
The Revenue filed an appeal under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT) dated 21/03/2014 in ITA No.1333/Bang/2013 for the assessment year 2008-2009. The assessee, Dr. Harsha N. Biliangady, had sold a commercial property measuring 3250 sq. ft. on 27.03.2007 and claimed a deduction of Rs.1,32,53,129/- under Section 54 of the Act, contending that he had purchased a residential house. However, since the property sold was commercial, the assessee later sought deduction under Section 54F. The Assessing Officer denied the deduction and imposed a penalty under Section 271(1)(c) for alleged concealment of material facts. The Commissioner of Income Tax (Appeals) upheld the penalty. On further appeal, the ITAT set aside the penalty, holding that there was no concealment of material facts and the penalty was not imposable. Aggrieved, the Revenue filed the present appeal. The High Court, after hearing the counsel for the Revenue, found that the Tribunal had correctly appreciated the facts and that no substantial question of law arose. The court noted that the assessee had disclosed all relevant facts and the claim for deduction was based on a bona fide belief. The appeal was dismissed, confirming the Tribunal's order cancelling the penalty.
Headnote
A) Income Tax - Penalty under Section 271(1)(c) - Concealment of Income - Section 271(1)(c) of the Income Tax Act, 1961 - The assessee sold a commercial property and claimed deduction under Section 54, later sought deduction under Section 54F. The Assessing Officer imposed penalty for concealment. The Tribunal cancelled the penalty holding no concealment. The High Court upheld the Tribunal's order, finding no substantial question of law. (Paras 1-5) B) Income Tax - Substantial Question of Law - Section 260-A of the Income Tax Act, 1961 - The Revenue's appeal under Section 260-A was dismissed as no substantial question of law arose. The Tribunal's findings were based on facts and not perverse. (Para 5)
Issue of Consideration
Whether the Tribunal was correct in cancelling the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, on the ground that there was no concealment of material facts by the assessee.
Final Decision
Appeal dismissed. No substantial question of law arises. The order of the ITAT cancelling the penalty under Section 271(1)(c) is confirmed.
Law Points
- Penalty under Section 271(1)(c) requires concealment of income or furnishing inaccurate particulars
- mere disallowance of claim does not attract penalty
- Section 54F deduction eligibility
- Section 260-A appeal
