TMI Blog2010 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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. Thus, answer the question as formulated in the negative that is against the assessee and in favour of the Revenue. - 243 of 1991 - - - Dated:- 4-8-2010 - A. K. SIKRI and Ms. REVA KHETRAPAL JJ. Ms. Prem Lata Bansal for the Commissioner. None appeared for the assessee. JUDGMENT The judgment of the court was delivered by 1. A. K. Sikri J.-Nobody appeared on behalf of the assessee in spite of service. Even today, there is no appearance. In these circumstances, we have no option but to proceed with the matter in the absence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15, 1985, was passed by the Assessing Officer thereby imposing penalty in the sum of Rs.1,05,730. The assessee has approached the Commissioner of Income-tax (Appeals) challenging the order of penalty, but unsuccessfully, as the appeal was dismissed on March 5, 1986. In further appeal to the Income-tax Appellate Tribunal, however, the assessee succeeded as the order of penalty was set-aside by the Tribunal, vide order dated February 11, 1988. Before we take note of the considerations which weighed with the Assessing Officer and the Commissioner of Income-tax (Appeals) on the one hand in imposing the penalty and the Income-tax Appellate Tribunal on the other hand in deleting the said penalty, it would be in fitness of things to deal with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fact, it was M/s. Jupiter Trading Corporation which had rendered the requisite services. Instead of paying the com-mission to M/s. Jupiter Trading Corporation directly, the assessee had paid 3 per cent. of the contract value as commission to Mrs. Ritu Nanda, who out of this commission paid 1 per cent. thereof to M/s. Jupiter Trading Corporation. It is for this reason that for the 1 per cent. commission which was paid to M/s. Jupiter Trading Corporation against the services actually rendered, the Commissioner of Income-tax (Appeals) had allowed the deduction. Other-wise, in so far as the payment made to Mrs. Ritu Nanda is concerned specific and categorical finding of the Commissioner of Income-tax (Appeals) was that she had not rendered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as failed to take note of the fact that part claim as commission was allowed to the assessee not because of the reason that Mrs. Ritu Nanda had rendered any services. It was because of the fact that M/s. Jupiter Trading Corporation had rendered services for which it was paid 1 per cent. of the commission by Mrs. Ritu Nanda out of 3 per cent. received by her. However, the penalty was imposed for putting a bogus claim of payment of commission purportedly paid to Mrs. Ritu Nanda. As far as com-mission to her is concerned, it was accepted by the Income-tax Appellate Tribunal in the quantum proceedings that she did not render any services at all. 8. The second reason given by the Tribunal, which flows from the first, is that it was not for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law was resettled in the following words (page 49) : "It is repeatedly held by the courts that the penalty on the ground of concealment of particulars of non-disclosure of full particulars can be levied only when in the accounts/return an item has been sup-pressed dishonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income as it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Further, conscious concealment is necessary. Even if some deduction or benefit is claimed by the assessee wrongly but bona fide and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramendra Textile Processors [2008] 306 ITR 277 (SC) ; [2008] 13 SCC 36. 12. The Explanations appended to section 271(1)(c) of the Income-tax Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilip N. Shrooff's case [2007] 291 ITR 519 (SC) has not considered the effect and relevance of section 276C of the Income-tax Act. The object behind the enactment of section 271(1)(c) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provisions is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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