Showing less LTCG by making false claim u/s 54EC without making investment: ITAT confirms penalty [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) confirmed penalty as there was showing less Long Term Capital Gain (LTCG) by making false claim under Section 54EC without making investment.

During the course of assessment proceedings, no evidence has been filed by the assessee, Smt. Maya K Dharwani in support of the claim as mentioned hereinabove. However, upon investigation made by the Assessing Officer (AO), it was revealed that the assessee never invested Rupees forty-one lakhs shown as investment in capital gain bond and out of deduction claimed under Section 54F of the Income Tax Act in respect of investment in LTCG Account Scheme of SBI.

The assessee had invested only amount of Rs.2 lakhs against the claim of Rs. 20 lakhs in the return of income and also as submitted before the AO. Further that, the said Rs.2 lakhs were not deposited within the prescribed time limit and also after filing of return.

Hence, both the claims of the assessee were rejected and the entire amount was brought to tax and penalty under Section 271(1)(c) of the Income Tax Act was initiated for concealing the income by furnishing inaccurate particulars of income intentionally to avoid tax liabilities.

So far as the claim under Section 54EC of the Income Tax Act to the tune of Rs.41 Lakhs is concerned, the assessee remained silent in regard to submission of the evidence in support of the said claim. Any debit entry in the bank account of the assessee was either found by which it could be established that the assessee had made payment towards purchase of long term assets i.e. REC Bond within the meaning of the provision of Section 54EC of the Act.

Moreso, once the query was raised by the AO in this respect the appellant has filed the revised statement of income and withdrew her claim made under Section 54EC of the Act, which further establishes the fact of making false and untrue statement during filing of return of income by her.

A Bench comprising Pramod M Jagtap, Vice President and Madhumita Roy, Judicial Member observed that “We do not find any iota of doubt in holding that the appellant is consciously and continuously mis-represented the facts and furnished inaccurate particulars of her income by making computation for this claim under Section 54EC of the Income Tax Act and 54F of the Income Tax Act. We therefore confirm the order passed by authorities below in imposing impugned penalty under Section 271(1)(c) of the Income Tax Act.”

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