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2023 (3) TMI 861 - MADRAS HIGH COURTLevy of penalty u/s 271(1)(c) - rejection of claim of deduction towards expenditure of research and development - Whether there is no mensrea on part of assessee? - HELD THAT:- There is no doubt that the claim of deduction towards expenditure on Research and Development constitutes furnishing inaccurate particulars in the sense it does not reflect the true state of facts/ affairs inasmuch as the appellant was not carrying on any business operation and has also sold the fixed assets during the relevant years in question. The claim of the appellant that there is no mensrea as the appellants are reporting loss is again a submission which proceeds on a misconception as to the scope of Section 271(1)(c) of the Act. Objective behind enactment of Section 271(1)(c) of the Act read with the Explanations indicate that the said section was for providing remedy for loss of revenue and such a penalty was a civil liability, therefore wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under Section 276-C. The submission of the appellant that only losses have been reported and thus penalty under Section 271(1)(c) of the Act is not warranted is an argument which has been rejected by the Hon'ble Supreme Court in Dharamendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT] - As a matter of fact an amendment has also been introduced to Section 271(1)(c) of the Act vide Explanation 4 to the said Section that income would also include losses and merely because an assessee had reported losses, it cannot be submitted that Section 271(1)(c) of the Act would not get attracted. The challenge to the levy of penalty is unsustainable. As Section 271(1)(c) of the Act provides for strict liability and in the present case, deduction have been claimed on the basis of false and non-existent facts, thus the order of the Tribunal restoring the order for levy of penalty is in order. Decided in favour of the revenue.
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