TMI Blog2012 (6) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... particular, no exception to the same can be taken. it cannot be held that the surrender/disclosure on the part of the assessee-respondent was not voluntarily. - Decided in favour of the assessee-respondent and against the revenue. - IT APPEAL NO. 88 OF 2008 - - - Dated:- 29-7-2011 - SUNIL AMBWANI AND PANKAJ MITHAL, JJ. ORDER 1. This income tax appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") has been preferred by the individual assessee against the order of the Income Tax Appellate Tribunal, Lucknow Bench dated 20.7.2007 passed in Income Tax Appeal No. 258/LUC/2006 concerning penalty in connection with assessment year 2001-02. 2. The respondent assessee for the relevant assessment year filed her income tax return on 31.7.2001 disclosing income of Rs. 1,34,696/-. She thereafter revised her return on 28.3.2002 and declared her income to be Rs. 3,84,696/- by adding additional income of Rs. 2,50,000/- which was earlier shown as gift received from Ashok Jain. 3. The assessment order was passed under Section 143(3) of the Act on 28.2.2003 and her taxable income was assessed to be Rs. 6,34,696/- by further including Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the aforesaid penalty by improperly appraising the evidence on record and in erroneously coming to the conclusion that the surrender of bogus loan by the assessee was a voluntary act. 7. In substance, the appeal only raises a solitary question of law as to whether under the facts and circumstances, the tribunal was justified in law in cancelling the penalty imposed under Section 271(1)(c) of the Act. 8. The relevant portion of Section 271(1)(c) of the Act with relevant explanation 1 is reproduced below: "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person - ( a ) ........... ( b ) ........... ( c ) has concealed the particulars of his income or furnished inaccurate particulars of such income, or ( d ) ........... he may direct that such person shall pay by way of penalty, - ( i ) ........... ( ii ) ........... ( iii ) ........... Explanation 1 .- Where in respect of any facts material to the computation of the total income of any person under this Act. - (A) such person fails to offer an explanation or offers an explanation which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Section 271 was added and by reason of such addition the view taken in the case of Sir Shadilal Sugar General Mills. Ltd. ( supra ) can no longer be said to be applicable. 10. However, despite above amendment and addition of Explanation to Section 271 creating a legal fiction, in the case of K.C. Builders v. Asstt. CIT [2004] 265 ITR 562/135 Taxman 461 the Supreme Court considering the penalty provision of Section 271(1)(c) of the Act held that the mere omission from the return of an item of receipt neither amounts to concealment nor to deliberate furnishing of inaccurate particulars of income, unless and until there is some evidence to show or circumstances are found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid imposition of tax thereon. In other words, element of mens rea was held to be inherent in concealment/furnishing of inaccurate particulars of income for the purpose of imposing penalty. 11. A similar view has been taken by their Lordships of the Supreme Court in the case of Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sha Jain. In this manner her taxable income was computed to be Rs. 6,34,696/- by adding the aforesaid two amounts of Rs. 2,50,000/- each as finally disclosed. 14. The assessing authority treated the above disclosure/surrender by the assessee-respondent of the two gifts of Rs. 2,50,000/- each as an act of compulsion on her part on account of the fact that the department had detected the racket of making of fake gifts for evading tax and further that the gift received by Smt. Usha Jain was not from any blood relative. 15. Admittedly, the aforesaid gifts were received by the assessee-respondent through account payee cheques. The first gift was from the relative. The other gift was from a family friend but the same could not have been disbelieved on the ground that it was not from a blood relative as there is no legal bar in receiving a gift from a person outside the family. 16. The assessee-respondent had produced Smt. Usha Jain, who also was an individual assessee to income tax, before the assessing officer. Her statement was also recorded. She accepted having made a gift to the assessee-respondent and proved the source of the gift by furnishing statement of her saving ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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