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TMI Blog2010 (9) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Rs. 46,78,832/- imposed by the Assessing Officer (in short, "AO") had been deleted. Mr. Sabharwal 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 Bench of the Apex Court over-ruled the decision in Dilip N. Shroff vs. Joint CIT (2007) 291 ITR 519 (SC) and approved the decision in Chairman, SEBI vs. Shriram Mutual Fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Joint CIT to the effect that mens rea was an essential ingredient for the penalty under Section 271(1)(c) that the decision in Dilip N. Shroff v. Joint CIT was overr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al expenditure and only depreciation is allowable. Even if, depreciation is allowable the same would be 10% of such expenditure. However, it did not mean to furnish inaccurate particulars of income. Since the assessee has offered an explanation for his opinion which he is able to substantiate, in terms of explanation-1 to section 271(1(c) of the Act, the disallowance of claim didn't mean to concealment of particulars of income. Therefore, the Ld. CIT(A) was justified in deleting the penalty levied in respect of such income." 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 T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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