JUDGMENT Heard Sri. Ashish Bansal, learned counsel for the petitioner and Sri. Gaurav Mahajan along with Manu Ghildyal, learned counsel for the respondents. 2. Challenge has been made to the order dated 27.10.2010 passed by the Income Tax Settlement Commission, Principal Bench, New Delhi, in Settlement Application No.UP/AGI/09-10/26-IT filed by the petitioner. The limited challenge raised in the present petition is to the penalty imposed by the Settlement Commission under Section 271(1) (c) of the Income-Tax Act, 1961 (hereinafter referred to as 'the Act'). 3. Undisputedly the petitioner purchased immovable property described as agricultural land ad-measuring 1.149 hectare, on 26.06.1983. After change of land use, the petitioner executed a Power of Attorney in favour of the third person on 15.01.2007. Consequently, the Power of Attorney holder executed the sale deed of that immovable property, on 05.02.2007 for disclosed consideration Rs.7,10,000/-. 4. The petitioner filed its return of income tax for the Assessment Year 2007-08 on 21.08.2007 disclosing total income Rs.98,750/-. It is petitioner's case that he was not aware of the sale deed executed by the Power of Attorney holder. Therefore, the return of income filed by the petitioner did not include the capital gains arising therefrom, to any extent. That knowledge was acquired by the petitioner on 11.04.2008 i.e. in the course of regular assessment proceedings. 5. In view of that disclosure made to the petitioner, it is his further case that he applied before the Settlement Commission on 30.12.2009. At that stage, the petitioner disclosed his income to Rs.21,00,000/- arising from sale of the above property. 6. Parallel to the proceeding before the Settlement Commission, the Stamp Valuation Authority of the State Government has taken up the matter, of their own. Accordingly, first they valued the sale deed against consideration Rs.24,50,000/- and still later they revised it to Rs.2,22,98,000/- on 15.09.2007. Upon the appeal filed, the Board of Revenue Chief Controlling Revenue Authority has reduced the same upto Rs.80,43,000/-. Further proceedings arising therefrom are not disclosed. 7. It is in such circumstances that the Settlement Commission has processed the application made by the petitioner. After making note of the facts, it has observed in paragraph nos. 29 and 30 as below: "29. The learned AR was specifically asked to reply why penalty for concealment should not be imposed in this case. 7. It is in such circumstances that the Settlement Commission has processed the application made by the petitioner. After making note of the facts, it has observed in paragraph nos. 29 and 30 as below: "29. The learned AR was specifically asked to reply why penalty for concealment should not be imposed in this case. The learned AR submitted that section 50C was a deeming provision and since it has not been established that the applicant had received the amount as shown in the original sale deed dated 5.2.2007 of Rs. 24,50,000/- or the higher amount as determined by the Revenue Board, no penalty for concealment could be imposed under such circumstances. In fact, according to the learned AR in view of the decision of the Hon'ble Bombay High Court in the case of Bhatia Nagar Premises Co-operative Society Ltd. (supra) it would be even incorrect to compute the capital gains on the basis of the value determined by the Revenue Board. 30. We find that the applicant had in the Settlement application computed the capital gains at Rs. 21,00,000/- which is even less than the amount of Rs. 24,50,000/- which was the value adopted for stamp duty purposes originally, when the land was shown to be agricultural. At the time of filing of the application the decision of the Revenue Board determining the value of the land for stamp duty purposes of Rs. 80,43,000/- dated 11.4.2008 was also available with the applicant. We also find that while determining the value of Rs. 80,43,000/-, the Revenue Board has very reasonably taken into consideration that the ADM (Finance), Mathura had adopted a rate of Rs. 2000/- per sq. mtr. for valuing the land in question, which they found to be high and not only reduced the same to Rs. 1400/- but had also given a deduction of 50% on account of the plot being large and allowed margin for roads etc. It is also stated in the Settlement application that the applicant had obtained legal advice. An elementary reading of section 50C would show that the capital gains was to be computed with reference to the value decided by the Revenue Board. The persistence of the applicant to show the value of the land at Rs.21,00,000/- on the basis of it being agricultural land (which it admittedly is not) clearly does not indicate the bonafide of the applicant. The persistence of the applicant to show the value of the land at Rs.21,00,000/- on the basis of it being agricultural land (which it admittedly is not) clearly does not indicate the bonafide of the applicant. It is also seen that the applicant has in a half hearted manner tried to confuse the issue by trying to make out a case that the land in question was his stock in trade but has given up this claim subsequently, after realizing the un-tenability of the same. He has further tried to obfuscate matters by taking recourse to section 45(2) without in any way substantiating his claim of applicability of this section or giving any working on that basis. A cumulative consideration of these facts would clearly show that even in his application before the Settlement Commission the conduct of the applicant is contumacious. He has clearly furnished inaccurate particulars of his income (valuation of the land sold). We feel that this is a fit case for imposition of penalty under section 271(1)(c). However, we would consider it reasonable to restrict the penalty to the minimum amount of capital gains sought to be evaded with reference to the value of Rs. 80,43,000/- as determined by the Revenue Board vide their order dated 11.4.2008." 8. In such facts, at present the writ petition has been confined to the levy of penalty under Section 271 (1)(c) of the Act. All other challenge raised to the validity of Section 50 C of the Act as also to the other parts of the order passed by the Settlement Commissioner have been not pressed by learned counsel for the petitioner. 9. On the levy of penalty, it has been submitted that no element of mens rea was alleged or established. Neither the petitioner was aware of the sale of his property nor he has received any consideration through any mode nor the Revenue has made any allegations in that regard. Moreover, there is no evidence whatsoever of any amount having been received in excess of disclosed consideration Rs.7,10,000/- The Revenue Authority made no effort to prove that fact allegation. 10. Insofar as discrepancy was alleged in the application made by the petitioner before the Settlement Commission, it has been asserted that at the relevant time, the Stamp Authority of the State Government was proposing to value the deed against consideration Rs.21,00,000/. 10. Insofar as discrepancy was alleged in the application made by the petitioner before the Settlement Commission, it has been asserted that at the relevant time, the Stamp Authority of the State Government was proposing to value the deed against consideration Rs.21,00,000/. Fact that the said consideration was revised to excess of Rs.2.00 crores and later reduced to Rs.80.00 lacs and odd remained dispute between the contracting party and Stamp Duty Authority. Even there is no evidence arose to establish that any money consideration had been actually passed to the vendor. 11. Therefore, it has been submitted, levy of penalty is based solely on presumptions and conjectures that too without any essential fact of concealment alleged or established. Merely because an addition may have been permissible by virtue of Section 50 C of the Act and merely because the petitioner may have been unable to rebut the statutory presumption arising under Section 50 C of the Act, may only have led to addition to the income of the assessee but not to automatic levy of penalty. 12. In fact, the Settlement Commission neither considered the issue of penalty independent of addition made under Section 50 C of the Act nor it has recorded any sustainable reason to impose that penalty. 13. Referring to the report submitted under Rule 9, it has been shown that the same referred to the case set up by the Stamp Authority but it did not bring out any evidence of actual consideration received by the petitioner or of knowledge gained by the petitioner of his land having been sold. 14. On the other hand, learned counsel for the Revenue would submit, once the petitioner failed to establish his bona fides, clear case of concealment is made out. 15. Having heard learned counsel for the parties and having perused the record, Section 50 C (1) and Section 271(1) (c) of the Act read respectively as below: "50C. 14. On the other hand, learned counsel for the Revenue would submit, once the petitioner failed to establish his bona fides, clear case of concealment is made out. 15. Having heard learned counsel for the parties and having perused the record, Section 50 C (1) and Section 271(1) (c) of the Act read respectively as below: "50C. Special provision for full value of consideration in certain cases.-(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer: [Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, or through such other electronic mode as may be prescribed on or before the date of the agreement for transfer: Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent. of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration." "271 (1) (c) Failure to furnish returns, comply with notices, concealment of income, etc. (a) and (b)....... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income" 16. (a) and (b)....... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income" 16. In the first place, we recognize-penalty for concealment may be imposed even by the Settlement Commission. There is no legal embargo against such levy of penalty. At the same time, it is sine qua non to impose such penalty that there must be "concealment" of particular income or there must have been furnished "inaccurate" particulars of income by the applicant before the Settlement Commission. 17. In the present case, it is not disputed to the Revenue that it had no knowledge of the transaction of the sale of land made by the petitioner before the petitioner filed its return. 18. In that application made by the petitioner on 30.12.2009, the petitioner disclosed knowledge of sale deed executed by his Power of Attorney holder Gaurav Agrawal to a third party for total consideration Rs.7,00,000/-. The petitioner also disclosed that the said property had been valued at Rs.24,50,000/- for the purpose of payment of Stamp Duty. What transpired thereafter with respect to the valuation of the sale deed leading to the first proposal to revise the same in excess of Rs.2.00 crores and later to reduce the same to Rs.80,43,000/- under the order dated 15.09.2007 passed by the Board of Revenue were subsequent events that unfolded after 30.12.2009 - the date of the application filed under Section 245 C (1) of the Act. 19. Therefore, in the first place, the assessee may never have been charged of practising concealment of material particulars of his income qua the proposed revision of Stamp Duty beyond Rs.24,50,000/-. That liability came to be settled at Rs.80,43,000/-. Since those facts had not unfolded, they were not known to the petitioner. Consequently, he could not have been saddled with a penalty for nondisclosure of such facts. The petitioner may never have been saddled to perform an impossible duty. A fact that was not know known to the petitioner may never have been disclosed by him. 20. Second, as to imposition of penalty, corresponding to Stamp Duty assessed on value of sale consideration of Rs.24,50,000/-, suffice to note that assessee had furnished explanation with respect to the same. According to the assessee, he was not aware of the sale deed executed by his Power of Attorney holder Gaurav Agrawal, on 05.02.2007. 20. Second, as to imposition of penalty, corresponding to Stamp Duty assessed on value of sale consideration of Rs.24,50,000/-, suffice to note that assessee had furnished explanation with respect to the same. According to the assessee, he was not aware of the sale deed executed by his Power of Attorney holder Gaurav Agrawal, on 05.02.2007. He further pleaded, according to the recital contained in the sale deed itself, the property was sold for Rs.7,10,000/- against cash payment received by said Gaurav Agrawal. Whether that explanation was true or not has not been investigated by the Settlement Commission. The Settlement Commission has not expressed any doubt to disbelieve the explanation furnished by the petitioner, as true. Since penalty under Section 271 (1) (c) of the Act may be imposed only on occurrence of concealment and not on under disclosure, the burden on the Revenue Authority - to establish such concealment, remained undischarged. 21. In the present case, though the allegation of concealment was made by the revenue authorities, the petitioner did furnish his fact explanation to the same. Therefore, revenue authorities and here the Settlement Commission were obligated in law to consider the fact explanation before imposing penalty under Section 271 (1) (c) of the Act. Without disbelieving the explanation furnished on cogent reasons and without reaching conclusion of concealment on material evidence on record, the petitioner did not stand exposed to levy of penalty as a logical fallout of addition sustained in assessment of income. 22. By observing conduct of the petitioner as "contumacious" and that he had clearly furnished inaccurate particulars, the Settlement Commission may never have substituted the requirement of reasoning with adjectives or by recording simple conclusion not supported by reasoning or finding as may lead to such conclusions. 23. We find, other High Courts - Calcutta High Court, in the case of Commissioner of Income-Tax v. Madan Teatres Ltd reported in (2013) 260 CTR 75 Calcutta, Bombay High Court in the case of Commissioner of Income Tax v. Fortune Hotels and Estates (P.) Ltd. (2014) 52 Taxman.com 330, and Gujarat High Court in the case of Principal Commissioner of Income Tax Vadodara- 2 v. Sun on Peak Hotel (P.) Ltd. [2018] 95 Taxman. Com 320, have adopted similar approach in dealing with penalty imposed under Section 271 (1)(c) of the Act. 24. Com 320, have adopted similar approach in dealing with penalty imposed under Section 271 (1)(c) of the Act. 24. In short, we conclude that it was legally permissible to the Settlement Commission to consider imposition of the penalty under Section 271(1) (c) of the Act, yet in the facts of the present case, element of concealment of income was not established. We further conclude, merely because addition may be made on the quantum side by invoking Section 50 C of the Act, it did not itself establish that such estimated consideration had actually passed on to the petitioner. Therefore, no conclusion of concealment may have arisen solely occasioned by that estimation of income by way of capital gains made by the Settlement Commission. In absence of any independent evidence to establish receipt of extra consideration and in absence of any finding to reject the fact explanation furnished by the petitioner, both as to ignorance of the sale deed executed by his Power of Attorney and also with respect to the actual consideration received, element of concealment was not established in the present case. Accordingly, the writ petition succeeds in part. The levy of penalty under Section 271(1)(c) of the Act under the order dated 27.10.2010 passed by the Income Tax Settlement Commission, is set aside. 25. The writ petition is allowed in part. No order as to costs.