TMI Blog1989 (7) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of s. 271(1)(c) as they stood at the relevant time did not require the existence of any mala fides or mens rea for coming to a finding of concealment or furnishing of inaccurate particulars of income. The CIT(A) further observed that the aforesaid omission in the return was admitted by the assessee and, therefore, the assessee must be held to have furnished inaccurate particulars of its income to the ITO and, accordingly, the penalty imposed by the assessing authority under s. 271(1)(c) was sustained by the CIT(A). 3. The learned counsel for the assessee pointed out that the assessee at the earlier opportunity during the course of assessment proceedings for the year under consideration had submitted explanation vide letter dt. 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the assessee had submitted a return of income showing loss of Rs. 20,36,538 for the year under appeal and even after the addition of the aforesaid amount of the closing stock and other disallowances, the loss or the year under appeal has been assessed at Rs. 16,80,157. He further contended that even in the subsequent year, namely, asst. yr. 1980-81, the assessee had suffered a heavy loss of Rs. 16,22,240 which has been assessed at nil figure vide assessment order under s. 144 dt. 31st March, 1983. It was submitted that there were no prospects of any profits in the near future and the assessee-firm was continuously running into heavy losses. Therefore, there could not be any guilty intention or motive in enhancing the figure of loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na High court in the case of Vishwakarma Industries Ltd. vs. CIT (1982) 29 CTR (P H) 243 (FB) : (1982) 135 ITR 652 (P H) which has also been approved by the Supreme Court in Chuhar Mal vs. CIT (1988) 70 CTR (SC) 88 : (1989) 172 ITR 250 (SC). The learned Departmental Representative further submitted that negligence amounts to concealment and the penalty imposed upon the assessee is sustainable on account of the fact that the aforesaid mistake proves gross negligence on the part of the assessee. He relied upon the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Drapco Electric Corporation 1978 CTR (Guj) 181 : (1980) 122 ITR 341 (Guj) in which it was held that any action taken by a person being aware of possible harm to others in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessment was completed at a loss of Rs. 16,80,157. In the subsequent year also the assessee had suffered heavy loss or Rs. 16,22,240 and the assessment was made under s. 144 at nil income. The assessee's contention that there were no prospects of any profits in near future was also not controverted by the learned Departmental Representative. In view of these facts, it is impossible to imagine that the assessee would have gained by understating the closing stock to the extent of s. 1,10,000. The aforesaid mistake has not resulted in any loss to the Revenue either in the year under consideration or in the subsequent year. The aforesaid mistake was claimed to be an inadvertent clerical mistake. The said mistake was not detected even du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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