TMI Blog2009 (12) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... . The penalty levied for the assessment year 2002-03 is Rs. 2,25,000 and for the assessment year 2003-04 is Rs. 2,77,600. The rate of penalty levied for both the assessment years is 100 per cent of the amount of tax sought to be evaded. 3. In both these cases, the assessee had provided for bonus commitment in its accounts. The said bonus liability was debited in the profit and loss account, by virtue of which, the taxable income was worked out after claiming deduction for the said bonus liability. In the course of assessment, it was noticed that the provision made was not actually paid to the employees as required under the provisions of law contained in section 43B. Accordingly, the said liability was disallowed and added to the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at penalty cannot be imposed on an assessee only on the ground of mens rea. It is essential on the part of the revenue authorities as well, to establish that there was furnishing of inaccurate particulars of income and/or concealment of income. Therefore, apart from examining the Doctrine of mens rea, it is very essential to appreciate the facts and circumstances of the case. In this case, even though the assessee has claimed deduction of bonus in violation of section 43B, the assessee has paid the bonus amount subsequently in the ensuing assessment year, which in turn shows that the claim/computation was not misleading or malicious. In view of the method of accounting employed by the assessee, the liability to pay the bonus has been ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examines a block of assessment years. When this treatment of section 43B is recurring a feature in assessments, it is necessary to examine a block of assessment years to understand whether the assessee has made any attempt to conceal its income or not. On the basis of just an individual assessment year, if one attempts to make out a case of concealment, without considering the actual payments made in the subsequent years, such attempt would be always premature. Therefore, in the facts and circumstances of the case, we find that the circumstances as assumed by the assessing authority, are not ripe enough to levy penalty on the assessee under section 271(1)( c ) the Act. Reliance placed by the CIT(A) on the concept of mens rea against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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