TMI Blog2011 (5) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhaskar Bhattacharya, J. This appeal under section 260A of the Income-tax Act, 1961 is at the instance of an assessee and is directed against an order dated 8th August, 2005, passed by the Income-tax Appellate Tribunal, "D" Bench, Kolkata, in ITA No. 283/Kol/2005 for the assessment year 1998-99 allowing an appeal filed by the Revenue against the order of CIT (Appeals) by which the CIT (Appeals) set aside an order of imposition of penalty under section 271(1)(c) of the Income-tax Act amounting to Rs. 5,52,00,300. 2. Being dissatisfied, the assessee has come up with the present appeal under section 260A of the Act. 3. A Division Bench of this Court at the time of admission of this appeal formulated the following two substantial questions of law: "(i) Whether the purported finding of the Tribunal that the claim made by your petitioner in the revised return for deduction under section 80HHC of the Act in respect of the foreign flight catering business was not bona fide or that the said claim was found to be false in assessment proceeding are perverse and based on no material whatsoever. (ii) Whether making a claim of deduction under section 80HHC of the Act in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the CIT(A) and on further appeal by the assessee. (e) Against such order of the Tribunal disallowing the claim under section 80HHC of the Act, the assessee filed an appeal under section 260A of the Act before this Court which was admitted and is pending. The appeal was admitted by this Court on 8-6-2004. (f) The Assessing Officer, in the meantime, initiated proceedings under section 271(1)(c) of the Act against the assessee for making such claim for deduction under section 80HHC of the Act in the revised return and by an order dated September 17, 2004 imposed penalty of Rs. 5,52,00,300 being the maximum penalty under the said section. (g) Against the said order of the Assessing Officer under section 271(1)(c) of the Act, the assessee preferred an appeal before the CIT(A) and the said appellate authority by his order dated November 29, 2004 set aside the order imposing penalty under section 271(1)(c) of the Act. (h) Against the said order of the CIT(A), the Revenue filed an appeal before the Tribunal and by the order impugned in this appeal, the Tribunal set aside the order of the CIT(A) with a, direction, however, for reducing the amount of penalty from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w rightly set aside the order passed by the CIT(A) and affirmed the order passed by the Assessing Officer with slight modification as to the quantum of penalty. Mrs. Gutgutia submits that the fact that the claim of the assessee under section 80HHC having been refused up to the Tribunal was sufficient to initiate proceeding under section 271(1)(c) of the Act. Mrs. Gutgutia, thus, prays for dismissal of the appeal. 7. Therefore, the only question that arises for determination in this appeal is whether the Tribunal was justified in setting aside the order of the CIT (A) and restoring the order of the Assessing Officer with reduced amount of penalty. 7A. Before entering into the question, we keep on record that as a separate appeal under section 260A of the Act at the instance of the assessee challenging the order of the Tribunal refusing the benefit under section 80HHC is pending before this Court, we have in this case, not gone into the question whether the assessee is really entitled to the said benefit and we have decided to proceed with the assumption that the assessee unsuccessfully claimed the said benefit. 8. After hearing the learned counsel for the parties and after goi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars. In Commissioner of Income-tax, Delhi v. Atul Mohan Bindal [2009(9) SCC 589] : (2010 AIR SCW 125), where this Court was considering the same provision, the Court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This Court referred to another decision of this Court in Union of India v. Dharamendra Textile Processors [2008(13) SCC 369] : (AIR 2008 SC (Supp) 668 : 2008 AIR SCW 2038), as also, the decision in Union of India v. Rajasthan Spg. and Wvg. Mills [2009 (13) SCC 448] and reiterated in para 13 that :- "13. It goes without saying that for applicability of section 271(1)(c), conditions stated therein must exist." Therefore, it is obvious that it must be shown that the conditions under section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. In Dilip N. Shroff v. Jt. CIT [2007(6) SCC 329] : (AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... why decision in Dilip N. Shroff v. Joint Commissioner of Income-tax, Mumbai and Anr. (cited supra) was overruled by this Court in Union of India v. Dharamendra Textile Processors (cited supra), was that according to this Court the effect and difference between section 271(1)(c) and section 276C of the Act was lost sight of in case of Dilip N. Shroff v. Joint Commissioner of Income-tax, Mumbai and Anr. (cited supra). However, it must be pointed out that in Union of India v. Dharamendra Textile Processors (cited supra), no fault was found with the reasoning in the decision in Dilip N. Shroff v. Joint Commissioner of Income-tax, Mumbai and Anr. (cited supra), where the Court explained the meaning of the terms "conceal" and "inaccurate". It was only the ultimate inference in Dilip N. Shroff v. Joint Commissioner of Income-tax, Mumbai and Anr. (cited supra) 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 Commissioner of Income-tax, Mumbai and Anr (cited supra) was overruled. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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