TMI Blog2011 (10) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law: - "1. Whether upon the fact and in the circumstances of the case, the Tribunal was justified in holding that the surrender of the amount of Rs. 2 lacs, which resulted due to the mistake of the Accountant in the books of account was a case of concealment of particular of income? 2. Whether upon the fact and in the circumstances of the case, the Tribunal was justified in holding that the surrender of Rs. 2 lacs by the appellant to be added to its income as extra profit was not bonafide and was not to purchase peace and avoid litigation? 3. Whether upon the fact and in the circumstances of the case, the department had discharged its burden to prove concealment? 4. Whether upon the fact and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount of Rs. 1,00,250/-was wonrgly posted in the account of M/s. Radhika Trading Company, and added it to the income of the assessee, after turning down the explanation that the posting was made in the account of M/s. Radhika Trading Company against the same receipt. and against the payment of Rs. 1 lakh made by them on 21.1.1992. In the bank account, no deposit of Rs. 1 lakh appeared on 21.1.1992. The A.O. observed that the assessee had fraudulently reduced the liability. 4. The A.O. further found that cash receipt of Rs. 88,000/- of M/s. Radhika Trading Company, paid on 11.10.1991, was not entered in the books of account of the assessee nor sale of Rs. 91,174.55 made to them on 9.12.1991 appeared in the accounts of M/s. Radhika Tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions made before the Assessing Officer were reiterated. It was contended that the assessee firm has 15 partners and all of them were uneducated having no knowledge of accounts. It was further contended that the partners were from the Banjara community. It was further contended that the Munim had committed certain mistakes while totaling up the various heads of expenses as well as various pages of account books and not recorded certain transactions for purchase and sale and if both are adjusted, there remains no difference. Similarly, it was contended that the valuation of the closing stock is defective and it does not call for imposition of penalty. Thus, on account of the fact that there was no intention on account of the partners, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 271(1)(C), are attracted. Relying upon K.P. Madhusudan v. CIT [2001] 251 ITR 99/118 Taxman 324 (SC), the Tribunal allowed the appeal. 7. Sri Shakeel Ahmad, learned counsel for the appellant, submits that unless there is a malafide attempt of concealment, the penalty is not attracted. The assessee surrendered Rs. 2 lakhs after the explanation given by their counsel regarding discrepancy in the accounts, was not accepted. The additions were not by way of any concealment of income as an attempt to evade the tax. These were by way of bonafide mistakes which were sought to be explained, but since they were not accepted, the assessee bonafidely surrendered Rs. 2 lakhs and he did not file any appeal, in which circumstance, the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The judgment in Dilip N. Shroff's case (supra), did not consider the effect and relevance of Section 276C of the Income Tax Act. The object behind the enactment of Section 272(1)(c) read with the Explanations, indicate that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C of the Income Tax Act. 9. In the present case, the A.O. has not recorded any finding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct behind the enactment of Section 271 (1)(c) read with its Explanations indicate that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as in the case in the matter of prosecution under Section 276 C of the Income Tax Act. 11. Explanation 1 to Section 7(1)(c) is in two parts. Part (A) is attracted where a person fails to after an explanation or an explanation is found by A.O. or CIT(A) to be false. Part (B) is attracted when a person offers an explanation which he is not able to substantiate, and fails to prove that such explanation is bonafide and that all the facts relating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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