TMI Blog2010 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 passed by the Income Tax Appellate Tribunal (in short "Tribunal") in ITA No. 503/Del/2009, for the Assessment Year 2003-2004. 2. Ms. Sonia Mathur, learned counsel for the revenue submitted that the Tribunal had erred in law in dismissing the revenue's appeal whereby the penalty under Section 271(1)(c) of the Act amounting to '32,58,703/- imposed by the Assessing Officer (in short, "AO") had been deleted. Ms. Mathur further relied upon a judgment of the Supreme Court in Union of India and Ors. Vs. Dharamendra Textile Processors and Ors. (2008) 13 SCC 369. 3. In fact, Section 271(1)(c) came to be interpreted by the Apex Court in Union of India Ors. vs. Dharamendra Textile Processors Ors. (2008) 306 ITR 277 (SC). The three Judge Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch particulars are found to be inaccurate, the liability would arise. In Dilip N. Shroff v. Joint CIT [2007] 6 SCC 329, thisCourt 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)(c) 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 such concealment of particulars of income, but it may not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredient for attracting civil liability as was the case in the matter of prosecution under Section 276C of the Act. The basic reason why decision in Dilip N. Shroff v. Joint CIT was overruled by this Court in Union of India v. Dharamendra Textile Processors, was that according to this Court the effect and difference between Section 271(1)(c) and Section 76C of the Act was lost sight of in the case of Dilip N. Shroff v. Joint CIT. However, it must be pointed out that in Union of India v. Dharamendra Textile Processors, no fault was found with the rasoning in the decision in Dilip N. Shroff v. Joint CIT, where the court explained the meaning of the terms "conceal" and "inaccurate". It was only the ultimate inference in Dilip N. Shroff v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rendered for the entire one year, the amount of TPA fees received in the last quarter of the year was belonging to the period covering three quarters of the next year also. Keeping in view the expenses to be incurred in next three quarters, the part of the income was also postponed to the three quarters of the next year. The AO was of the view that entire fee should be booked as income in the quarter in which it was received and invoiced and the apportionment in the next three quarters was not correct. As per assessee, it adopted principle of matching concept which requires that expenses for the accounting period should be matched against related income. 5. In view of the above discussion, it is crystal clear that assessee has given ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonging to the full year i.e. four quarters." 6. From the aforesaid, it is apparent that the respondent-assessee had made full disclosure and there was neither any concealment of income nor furnishing of inaccurate particulars. In fact, both the CIT(A) and Tribunal have found that the justification furnished by the respondent-assessee was bonafide. Consequently, keeping in view the conclusion of facts arrived at by the Commissioner as well as by the Tribunal, the explanation offered by the respondent-assessee is bona fide and the respondent-assessee's case would fall within the ambit of Explanation 1 to Section 271 of Act. 7. Accordingly, the respondent-assessee is not liable to pay penalty under Section 271(1)(c) of Act and thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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