TMI Blog1991 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... directed against the order of the High Court of Judicature at Allahabad dated April 9, 1977. The Income-tax Appellate Tribunal 'B' (Bench Allahabad) by its order dated October 18, 1975, held that, in the facts and circumstances of the case, it cannot be said that the assessee could not have been under a bona fide belief that its income was below the taxable limit and that it was under no obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it does, he has placed before us several cases decided by this court and the High Court in order to demonstrate that the proceedings by way of penalty under section 271(1)(a) of the Act are quasi-criminal in nature and that, therefore, the element of mens rea is a mandatory requirement before a penalty can be imposed under section 271(1) (a). We are relieved of the necessity of referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) which requires that mens rea must be proved before penalty can be levied under that provision. We are supported by the statement in Corpus Juris Secundum, Volume 85, page 580, paragraph 1023: 'A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for crime or a fine or forfeiture provided as punishment for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the High Court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in cancelling the penalty orders and deleting the penalty of (amounts not being mentioned) levied under section 271(1)(a) for the assessment years 1965-66 to 1973-74 ?" In the facts and circumstances of the case, there will be no order as to costs. Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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