TMI Blog2010 (8) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... R J, AND A.L. GEHLOT, ACCOUNTANT MEMBER J, Yogesh Thar for the Appellant . A.K. Nayak for the Respondent. ORDER A.L. Gehlot, Accountant Member. This appeal filed by the Assessee is directed against the order of CIT(A)-19, Mumbai, passed on13-11-2009for the assessment year 2006-07. 2. The ground raised by the assessee in this appeal is pertaining to levy of penalty under section 271(1)( c ) of the Act, on the adjustment made by the Assessing Officer under section 94(7) of the Act. 3. During the course of assessment proceedings, the Assessing Officer made addition under the head Short-term capital gain on account of violation of provisions of section 94(7) of the Act by not ignoring losses. The Assessing Officer levied penalty of Rs. 28,91,605 being 100 per cent of tax sought to be evaded under section 271(1)( c ) of the Act in respect of income of Rs. 85,90,626. The CIT(A) confirmed the said penalty. 4. The learned AR submitted that the assessee has filed revised return saying that the said capital gain is under section 94(7) of the Act. The learned AR referred page 2 of Assessing Officer s order and submitted that the assessee has furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncelare which implies con+celare to hide. Webster in his New International Dictionary equates its meaning to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery of; to withhold knowledge of . The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. 9. The Apex Court in the case of Reliance Petroproducts (P.) Ltd. ( supra ) has considered some other cases of the Apex Court on the issue at pages 164 and 165 and observed as under: In Dilip N. Shroff v. Jt. CIT [2007] 6 SCC 329, this Court explained the terms concealment of income and furnishing inaccurate particulars . The Court went on to hold therein that in order to attract the penalty under section 271(1)( c ), mens rea was necessary, as according to the Court, the word inaccurate signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause ( iii ) of section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty under section 271(1)( c ) that the decision in Dilip N. Shroff s case ( supra ) was overruled . 10. From above discussions we find that there is strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability. It is obvious that the penal provisions would operate when there is concealment of particulars of income or a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of particulars of his income and it is only when he fails in his duty by not disclosing particulars of his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of particulars of his income as well as a correct disclosure. Therefore, if the disclosure made of the particulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause ( c ) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 13. A conspectus of the Explanation makes it clear that the statute visualised the assessment proceedings and penalty proceedings to be wholly distinct and independent of each other. In essence, the Explanation is a rule of evidence. Presumptions which are rebutting table in nature are available to be drawn. The initial burden of discharging the onus of rebuttal is on the assessee. The rationale behind this view is that the basic facts are within the special knowledge of the assessee. Section 106 of the Indian Evidence Act, 1872, gives statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, namely, not including the amount of freight in the taxable turnover, was under a bona fide belief that the amount of freight did not form part of the sale price and was not includible in the taxable turnover. The contention of the assessee throughout was that on a proper construction of the definition of sale price in section 2( o ) of the Madhya Pradesh General Sales Tax Act, 1958, and section 2( h ) of the Central Sales Tax Act, 1956, the amount of freight did not fall within the definition and was not liable to be included in the taxable turnover. This was the reason why the assessee did not include the amount of freight in the taxable turnover in the returns filed by it. The court further held that it was a highly arguable contention which required serious consideration by the court and the belief entertained by the assessee that it was not liable to include the amount of freight in the taxable turnover, could not be said to be mala fide or unreasonable. What section 43 of the Madhya Pradesh General Sales Tax Act, 1958, requires is that the assessee should have filed a false return. Where the assessee does not include a particular item in the taxable turnover under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to them that they are responsible for the entries made in any form and that they cannot be allowed to plead that they were made under official instructions. 16. In the light of above discussion we consider the facts of the case under consideration. On perusal of the orders of revenue authorities, we find that the penalty under section 271(1)( c ) was levied on the ground that the assessee violated of provisions of section 94(7) of the Act by not ignoring losses while computing short-term capital gains on transactions related to section 94(7) of the Act. It is important to state here that the Assessing Officer made the addition only on the basis of material and informations furnished by the assessee. The Apex Court in the case of Reliance Petroproducts (P.) Ltd. ( supra ) regarding the word particulars used in section 271(1)( c ) has held that there can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in the case under consideration we find that the assessee has furnished full deta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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