TMI Blog2015 (5) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... ehrotra And Shri H.S. Sidhu JJ. For the Appellant : Sh. K.K. JAISWAL, SR. DR. For the Respondent : S h. ROHIT JAIN, ADV. AND MS. ORDER Per H.S. Sidhu, JM Revenue has filed this appeal against the Order dated 10.5.2013 passed by the Ld. Commissioner of Income Tax (Appeals)-III), New Delhi pertaining to assessment year 2009-10. 2. The grounds raised by the Department read as under:- 1. On the facts and in the circumstances of the case, the CIT(A) has erred in cancelling the penalty of ₹ 4,89,374/- levied by the AO u/s. 271(1)(c) of the I.T. Act., 1961. 2. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 3. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are during the course of assessment proceedings AO noticed that the assessee has earned a dividend income of ₹ 5,14,50,508/- which did not form part of the total income. As per the assessee the disallowance u/s. 14A came to ₹ 5,14,505/-, whereas as per the AO the disallowance under section 14A was to be made as per Rule 8D and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and not on the revenue. 8.2 We find that Mens rea was considered to be a necessary ingredient for levy of penalty as laid down by the Hon ble Supreme Court in CIT Vs Anwar Ali (1970) 76 ITR 696. But after the introduction of Explanation 1 to Section 271(1)(c), the Hon ble Supreme Court has held that the requirement of proof of Mens rea on the part of the Revenue, would no longer be necessary as held in Addl. CIT Vs Jeevan Lal Shah (1994) 205 ITR 244 (SC) and B.A. Balasubramaniam and Bros. Co. Vs CIT (1999) 236 ITR 977 (SC). The role of the Explanation was only to place the burden of proof squarely on the taxpayer. 8.3 We note that in this context two landmark judgments were given by Apex Court in Dilip N. Shroff Vs Joint CIT (2007) 2911TR 519 (SC) and T. Ashok Pai Vs CIT (2007) 292 ITR 11 (SC), which spell out mainly the following rules for the purpose of penalty imposable: (i) Both the expressions concealment of income and furnishing of inaccurate particulars indicate some deliberation on the part of the assessee, though the word deliberately and the word willfully are no longer part of the statue. (ii) Mere omission or negligence would not constitute a deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile Processor, the Hon ble Supreme Court has come out with the ruling in 2 different cases namely CIT Vs Atul Mohan Bindal (2009) (317 ITR1) and UOI Vs Rajasthan Spinning Weaving Mills (2010) (lGSTR66) (SC), and where they have reiterated again that that for applicability of Section 271(l)(c} the condition stated therein must exist. 8.8 Even in the decision in the case of (IT (LTU) Vs. MTNL, ITA NO.626/2011 dated 10.10.2011, the Hon ble Jurisdictional Delhi High Court has upheld the same view. 8.9 We note from the above, it is very clear that for imposing penalty under Section 271(1)(c), the AO have to be satisfied that: (a) assessee has concealed the particulars of income or (b) assessee has furnished inaccurate particulars of such income. 8.10 Thus, in view of the Hon'ble Supreme Court's decision in Reliance Petroproducts (Supra) it is clear that the legislature did not intend to impose penalty on every assessee whose claim was rejected by the assessing officer. What is sought to be covered under Section 271(l)(c) is concealment of particulars of income or furnishing of inaccurate particulars of income and making of an untenable claim. 8.11 From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me couldn't be considered as concealment or furnishing of inaccurate particulars. 8.16 Keeping in view of the facts and circumstances as explained above, we are of the view that Ld. CIT(A) has rightly held that there is no concealment or inaccurate particulars of income where the addition and/or disallowance is based on bona-fide claims, debatable claims and difference of opinion as held inter-alia by the Hon'ble Supreme Court in a recent judgment in the case of Commissioner of Income tax Vs. Reliance Petroproducts Pvt. Ltd. reported in 322 ITR 158 (SC) the head notes of the said case reads as under: A glance at the provisions of Section 271(l)(c) of the Income Tax Act 1961, suggests that in order to be covered by it, 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. The meaning of the word particulars used in Section 271(l)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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