TMI Blog2013 (3) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) there has to be concealment of particulars of the income of the assessee and the assessee must have furnished inaccurate particulars of his income. Here, it is the admitted case that the assessee filed revised profit and loss account statement showing the net profit of Rs.3,92,649/- being 5% on Rs.78,52,980/- and the same having been done before the assessment was completed, thus we fail to understand as to how the Revenue is justified in imposing penalty under Section 271(1)(c) - appeal filed by the Revenue dismissed - against the Revenue. - Tax Case (Appeal) No.341 of 2010 - - - Dated:- 5-2-2013 - R. Banumathi And K. Ravichandra Baabu,JJ. For Appellant : Mr.M.Swaminathan Standing Counsel for Income Tax For Respondent : Mr.J.Balachander JUDGMENT The Revenue is on appeal against the order passed by the Tribunal in ITA.No.531/Mds/2009 dated 05.10.2009, for the relevant assessment year 2005-2006 by raising the following substantial question of law:- "Whether on the facts and circumstances of the case, the Tribunal was right in cancelling the penalty contrary to the law laid down in 306 ITR 277 by the Apex Court?" 2. The assessee, is an individual. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, allowed the appeal preferred by the assessee. The Revenue challenged the said order of the Tribunal in this appeal by raising the above said substantial question of law as stated supra. 5. First of all, in order to invoke penalty proceedings under Section 271 (1) (c) of the Act, there must be concealment of particulars of income or furnishing of inaccurate particulars of his income by the assessee. Section 271 (1) (c) of the Act reads as follows:- "271. Failure to furnish returns, comply with notices, concealment of income, etc. - (1) If the Assessing Officer or the Commissioner (Appeals) 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 income " From the facts placed before this Court, it could be seen that the Assessing Officer was originally of the impression that a sum of Rs.47,36,000/-was deposited by the assessee on a single day. However, the Assessing Officer latter found that such deposit was not made on a single day and it was made for a period commencing from 01.04.2004 to 29.03.2005. 6. Though the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to furnishing inaccurate particulars. The relevant portion of the decision reads as follows:- "7. As against this, the learned counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the Act. It was pointed out that there was no concealment or any inaccurate particulars regarding the income were submitted in the return. Section 271(1)(c) is as under: 27(1) If the AO or the CIT(A) or the CIT in the course of any proceedings under this Act, is satisfied that any person (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to be inaccurate, the liability would arise. In Dilip N. Shroff v. CIT and another (2007) 210 CTR (SC) 228 : (2007) 6 SCC 329, this Court 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) 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 an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Justice K.Ravichandrabaabu, J). In that case, the Assessing Officer initiated penalty proceedings under Section 271(1) (c) of the Act holding that the assessee had not filed the revised return of income to offer the amount as income for the purpose of assessment. Even in that case such levy of penalty was rejected by this Court by holding that when the Tribunal had come to a factual finding that there was no lacking in bona fide in the claim of the assessee originally made, no ground to accept the plea of the Revenue to admit the said Tax Case (Appeal). Here, it is the admitted case that the assessee filed revised profit and loss account statement showing the net profit of Rs.3,92,649/- being 5% on Rs.78,52,980/- and the same having been done before the assessment was completed, we fail to understand as to how the Revenue is justified in imposing penalty under Section 271 (1) (c) of the Act. Therefore by applying the decision of the Hon'ble Supreme Court in (2010) 322 ITR 158 (SC) as well as the decision of the Division Bench of this Court in Tax Case (Appeal) No.273 of 2012 dated 12.09.20012, we reject the appeal filed by the Revenue by answering the substantial question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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