TMI Blog2012 (8) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... t of mens rea was essential - penalty is thus liable be deleted - in favour of assessee. - Tax Case (Appeal) No.1128 of 2006 - - - Dated:- 19-7-2012 - MRS.JUSTICE CHITRA VENKATARAMAN, MR.JUSTICE K.RAVICHANDRABAABU, JJ. For appellant : Mr.T.Ravikumar Standing Counsel for Income Tax For respondent : Mr.C.V.Rajan JUDGMENT CHITRA VENKATARAMAN, J. The following are the substantial questions of law raised by the Revenue in this Tax Case Appeal, relating to the Assessment Year 2001-02: (a) Whether the failure to advert to clause "B" of Explanation 1 to Section 271(1) of the Income Tax Act had vitiated the order of the Income Tax Appellate Tribunal when it held that when disclosure is made voluntarily, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and stated that the mere consent given for an addition of the amount to the returned income, did not amount to concealment. It also pointed out that they were small traders in paper and boards compared to other dealers; they had neither concealed any income nor resorted to any evasion of tax and that taking into account their voluntary and honest act of offering all the credits for which they could not produce necessary evidence by bringing the creditors and the agents, the assessee sought for dropping of the proceedings. The Assessing Officer, however, rejected the said contention. Though the assessee came forward to offer the expenses claimed for assessment, confronted with the fact that they could not prove their claim and there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount for assessment, it was clear that the returns filed were incorrect and hence, there was concealment of particulars of the income furnished. Going by the conduct of the assessee in offering the amount for assessment, the concealment stood proved and consequently, the order of the Tribunal has to be set aside. 6. Per contra, learned counsel appearing for the assessee reiterated the contention that mere consent for addition to the returned income would not automatically lead to an inference that there was concealment of income by giving inaccurate particulars. He submitted that although the assessee had produced necessary confirmation letter, at the time of assessment, since the parties had failed to respond to the notices, realising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of penalty. The Apex Court held, the words "inaccurate particulars" mean "not accurate", "not exact or correct", "not according to truth" and "erroneous", that the mere making of a claim, which is not sustainable in law, by itself, would not amount to furnishing inaccurate particulars regarding the income of the assessee and that such a claim made in the return cannot amount to furnishing inaccurate particulars. The Apex Court further held as follows: " Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the Revenue then in case of every return where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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