TMI Blog2015 (5) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... acto invite levy of penalty u/s 271(1)(c) of the Act. The present case is squarely covered in favour of the assessee by the decision of ITAT Delhi ‘E’ Bench in the case of ACIT vs M/s Mehrotra Invofin India Pvt. Ltd. (2015 (5) TMI 535 - ITAT DELHI) and hence, sole ground of the revenue being devoid of merits is dismissed. - Decided in favour of assessee. - ITA No. 4363/Del/2013 - - - Dated:- 1-5-2015 - Shri R. S. Syal And Shri Chandramohan Garg,JJ. For the Appellant : Shri T. Vasanthan, Sr. DR For the Respondent : Shri Rohit Jain, CA, Ms Debashree, CA ORDER Per C. M. Garg, Judicial Member This appeal of the revenue has been directed against the order of the CIT(A)-III, New Delhi dated 10.05.2013 in Appeal No. 21/2012-13 for AY 2009-10. 2. The sole ground raised by the revenue reads as under:- 1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in cancelling the penalty of ₹ 15,54,462/- levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961. 3. We have heard arguments of both the sides and carefully perused the relevant material placed on record. At the very outset, ld. Counsel of the assessee has drawn ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r levy of penalty as laid down by the Hon ble Supreme ITA NO. 4488/Del/2013 4 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 deliberate act of suppressiio veri or suggestio falsi. (iii) Primary burden of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 the various judicial precedents it is seen that the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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(1)(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(1)(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 penalty, unless the case is strictly covered by the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its own, disallowed a sum of 1% of dividend income u/s 14A of the Income Tax Act, 1961. The Tribunal further held that the AO was not satisfied with the assessee s quantum of disallowance and he accordingly applied Rule 8D of the Income Tax Rules 1962 and computed the disallowance which was accepted by the assessee to avoid further litigation. The Tribunal also held that the issue may call for addition to the income assessed u/s 143(3) of the Act but in order to invoke the penalty u/s 271(1)(c) of the Act, the AO has to walk a little extra mile to prove that there is failure on the part of the assessee to conceal the particulars of income or furnishing of inaccurate particulars . We are in agreement with the conclusion of the Coordinate Bench of the Tribunal that mere non-acceptance of assessee s submissions and without any positive evidence from the AO that the assessee has concealed or has furnished inaccurate particulars of its income, did not ipso facto invite levy of penalty u/s 271(1)(c) of the Act. The present case is squarely covered in favour of the assessee by the decision of ITAT Delhi E Bench in the case of ACIT vs M/s Mehrotra Invofin India Pvt. Ltd. (supra) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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