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Commissioner of Income Tax, Udaipur Versus The Udaipur Central Cooperative Bank Ltd.

2015 (5) TMI 870 - RAJASTHAN HIGH COURT

Penalty u/s 271(1)(c) - claim of deduction under Section 80-P(2)(d) - Held that:- In the case in hand the applicant submitted the revised return and on basis of that tax was recovered. True it is, at the fist instance the assessee claimed exemption as per provisions of Section 80-P(2)(d) of the Act of 1961 but immediately on knowing about its non-applicability a revised return was filed disclosing accurate income. Under Section 271(1)(c) of the Act of 1961 it is required to be seen as to whether .....

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mediately rectified by submitting a revised return.

In this factual background we do not find any substantial question of law that may demand adjudication by us by entertaining an appeal as per provisions of Section 260-A of the Income Tax Act, 1961. - Decided in favour of assesse. - D B Income Tax Appeal No. 105/2013 - Dated:- 1-5-2015 - Govind Mathur And Jaishree Thakur,JJ. For the Petitioner : Mr K K Bissa For the Respondent : None ORDER By The Court The respondent assessee is ca .....

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). The Assessing Officer by a notice, as per provisions of Section 271(1)(c) of the Act of 1961, dated 5.12.2011 called upon the assessee respondent to explain as to why penalty be not imposed upon it for concealment of particulars of income for the assessment year 2008-09. The assessee responded the notice with assertion that it disclosed full particulars of the income and did not conceal any particulars of income, as such no action as per Section 271(1)(c) of the Act of 1961 was desirable. The .....

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not with any ulterior motive, hence a revised return was filed, as such, the action of the assessee does not fall in the category of concealment or furnishing inaccurate income. An appeal preferred by the revenue before the Income Tax Appellate Tribunal also came to be dismissed by judgment dated 21.1.2013. Before us, the argument advanced by learned counsel for the revenue is that the the Commissioner of Income Tax (Appeals), Udaipur as well as the Income Tax Appellate Tribunal failed to apprec .....

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ed return was found incorrect or inaccurate. No material is also available on record to establish that any conscious effort was made by the assessee respondent to conceal its income. To impose a penalty as per Section 271 (1)(c) the Assessing Officer is required to get himself satisfied about existence of the conditions stated therein. Hon'ble Supreme Court in Commissioner of Income Tax v. Reliance Petroproducts Pvt. Ltd., reported in (2010) 322 ITR 158 (SC), while examining the issue as to .....

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wever, the learned counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted .....

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hat such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In CIT Vs. Atul Mohan Bindal [2009) 9 SCC 589, where this court was considering the same provision, the court observed that the Assessing Officer h .....

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" Therefore, it is obvious that it must be shown that the conditions under section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. In Dilip N. Shroff Vs. Joint CIT (2007) 6 SCC 329, this court explained the terms "concealment of income&q .....

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f 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 Assessing Officer must be found to have failed to prove that his explanation is not only not bon .....

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cessors, after quoting from section 271 extensively and also considering section 271(1) (c), the court came to the conclusion that since section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The court went on to hold that the objective behind the enactment of section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for lo .....

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of in the case of Dilip N. Shroff Vs. Joint CIT However, it must be pointed out that in Union of India Vs. Dharamendra Textile Processors, no fault was found with the reasoning in the decision in Dilip N. Shroff Vs. Joint CIT, where the court explained the meaning of the terms "conceal" and "inaccurate". It was only the ultimate inference in Dilip N. Shroff Vs. Joint CIT to the effect that mens rea was an essential ingredient for the penalty under section 271(1) (c) that the .....

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