TMI Blog2016 (3) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... act. It is established principle that merely because of the claim of the assessee did not find favour of the assessing authority , it cannot attract a provision of penalty u/s 271(1)(c) of the Act. Furthermore at the time of filing of return the assessee has put a note along with computation of income which fully disclosed the content of the agreement as well the contention of the assessee. In the note it is contended that the assessee satisfied the conditions laid down u/s 44BBB of the Act. Therefore there is adequate disclosure made by the assessee putting forth its contention. Therefore at the most claim of the assessee can be said to be incorrect but not false. See CIT V Reliance Petro products Private Limited [2010 (3) TMI 80 - SUPREME COURT ] wherein held a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee.- Decided in favour of assessee - ITA Nos. 5075/Del/2011 - - - Dated:- 9-2-2016 - SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Sh. Gaurav Dudeja, Sr. DR For The Respondent : Sh.Rajan Bhatia, CA Sh. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not furnished any inaccurate particulars. Aggrieved by the order of the learned Commissioner of Income-tax (Appeals) revenue is in appeal before us. 3. Before us the ld DR contended that addition has been confirmed by the learned Commissioner of Income-tax (Appeals) and as well as ITAT where the finding of the AO has been confirmed therefore penalty is rightly levied. 4. Against this the ld AR submitted that merely because the addition has been confirmed, the assessee cannot be subjected to penalty u/s 271(1)(c). For this he has relied upon the order of the learned Commissioner of Income-tax (Appeals) who has deleted the penalty after considering the decision of Hon ble Supreme Court in the case of the CIT Vs. Reliance Petro Products (P) Ltd. 189 Taxmann 322(SC). Therefore he submitted that penalty cannot be levied in this case. 5. We have carefully considered the rival submission and perused the order of assessment u/s 143(3) and subsequent orders of CIT (A) and ITAT where the quantum of addition has been discussed. We also perused the order of AO levying penalty u/s 271(1)(c) of ₹ 36,07,868/-. The main reason given by the AO is that contract awarded to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate Page No : 0164 particulars of such income . We do not think that 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 imag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT* was upset. In Union of India v. Dharamendra Textile Processors**, 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 loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section 276C of the Act. The basic reason why decision in Dilip N. Shroff v. Joint CIT was overruled by this court in Union of India v. Dharamendra Textile Process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect ; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms ; (i) an item of receipt may be suppressed fraudulently ; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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