TMI Blog2015 (10) TMI 2301X X X X Extracts X X X X X X X X Extracts X X X X ..... e occasion to invoke section 271 did not arise. In the matter of Jugalkishore Hargopal Das (2000 (1) TMI 32 - KERALA High Court) held that if an assessee offers an explanation, the AO has to consider the acceptability of the explanation and pass necessary orders, that if the explanation is found acceptable, notwithstanding addition made by treating the amount as income from undisclosed sources penalty may not be levied. Also see NG Technologies Ltd. [2014 (12) TMI 481 - DELHI HIGH COURT] - Decided in favour of assessee. - ITA No. 6663/Mum/2010 - - - Dated:- 23-9-2015 - Rajendra, AM And Sanjay Garg, JM For the Petitioner : Shri K K Ved For the Respondent : Shri Raghuveer Madnappa ORDER Per Rajendra, AM Challenging th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, the assessee preferred an appeal before the FAA. Before him, it was argued that the assessee had claimed a provision of deduction for the general administrative expenditure in accordance with section 44C of the Act, that a portion of the expenditure was suo moto not claimed while filing the return, that in earlier years the then FAA has allowed the HO expenditure, that there was difference of opinion about the nature of expenditure incurred between the AO and the assessee, that it was under bonafide belief that the expenditure was allowable, that it had not concealed the particulars of income. It relied upon the cases of Emirates Commercial Bank(262 ITR 55) , Deutsche Bank A G (284 ITR 463) . After considering the submission of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the addition upheld by the FAA for the year under consideration with regard to HO expenses was restored back to the file of the FAA by the Tribunal vide its order dated 04.09.2013 (ITA No.1798/Mum/2009) , that the FAA had rightly deleted the penalty. He referred to the order of the Tribunal delivered in the case of National Securities Depositories Ltd. (ITA/1663/Mum/2009 dated 06.01.2010). 2.3. We have heard the rival submissions and perused the material. We find that the AO had made the addition under the head HO Expenses for the year under consideration, that the FAA upheld the addition, that in the earlier years similar expenses were allowed by the then FAA and in the subsequent year the DRP directed the AO to allow the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oke section 271 did not arise. In the matter of Jugalkishore Hargopal Das (243 ITR 220), Hon'ble Kerala High Court has held that if an assessee offers an explanation, the AO has to consider the acceptability of the explanation and pass necessary orders, that if the explanation is found acceptable, notwithstanding addition made by treating the amount as income from undisclosed sources penalty may not be levied. Hon'ble Delhi High Court has in the case of NG Technologies Ltd. (370 ITR 7) has laid down some principles governing the levy of concealment penalty as under: Mens rea is not a necessary attribute to impose penalty under section 271(1)(c) of the Income-tax Act, 1961. Penalty under section 271(1)(c) is imposed as a civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers conferred on Revenue officers are in the nature of a trust. The officers hold office as trustees of the public at large. They deal with public revenue and public money and that cannot be wasted in frivolous litigation. Every case must be dealt with on its merits and no routine exercise ought to be undertaken merely because the revenue impact is higher or the status or financial position of the assessee is influential and strong. That cannot be the only yardstick or criteria... that merely because the assessee raised a claim which was eventually disallowed, that did not mean that the ingredients of clause (c) were satisfied or fulfilled so as to justify imposition of a penalty. Considering the above principles and the facts like al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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