TMI Blog2017 (3) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to ₹ 1,45,494/-, ₹ 2,22,398/-, ₹ 2,22,899/- and ₹ 4,59,926/- respectively. 2. During hearing of these appeals, the learned counsel for the assessee M/s. Dinkle Hariya, did not press ground no.1 with respect to not providing proper and fair opportunity of being heard to the assessee. Thus, this ground is dismissed as not pressed. 3. The next effective ground with respect to confirmation of penalty u/s.271(1)(c ) of the Act. It was contended that in quantum addition, the taxes were paid by the assessee. It was pleaded that when assessment order was passed u/s. 143(3) r.w.s.147 of the Act by the Assessing Officer, the penalty proceedings were initiated for different reasons i.e., for furnishing inaccurate particulars of income, whereas explanation -1 to section 271(1)( c) was initiated for concealment and not for furnishing inaccurate particulars. Reliance was placed upon the decision in 292 ITR 11 (Supreme Court). The crux of the argument is that explanation-1 is applicable for concealment and not for furnishing inaccurate particulars, therefore, penalty will not survive. 4. On the other hand the learned DR Shri Rajat Mittal, thought defended co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attorney holder. This contention of the assessee cannot be believed for the reason that in his revised return dated 12.1.1990 again declared a loss of ₹ 1,04,531/- and did not admit the capital gains and other income. The first appellate authority rightly holds that if the explanation of assessee is accepted then every tax evader could take shelter by shifting the blame on his clerk and accountants who invariably prepare the return for them. The contention of the assessee that because of the negligence on the part of the Bank the mistake of concealment has crept in is not acceptable. 7. Mr. G. Sarangan, learned senior counsel appearing on behalf of the appellant, would submit that the Tribunal having arrived at a finding of fact that the appellant was not guilty of deliberate concealment of his income and thus, having no mens rea in this behalf, the impugned judgment cannot be sustained. In any event, it was urged, no specific question having been referred as to whether the findings of the Tribunal are perverse or not, the High Court committed a manifest error in differing with the findings of fact arrived at by the Tribubnal. 8. Mr. B. Datta, learned Additional Solici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, trite that if an explanation given by the assessee with regard to the mistake committed by him has been treated to be bona fide and it has been found as of fact that he had acted on the basis of wrong legal advice, the question of his failure to discharge his burden in terms of explanation appended to Section 271(1)(C) of the Income Tax Act would not arise. 14. In Dilip N. Shroff v. Joint Commissioner of Income-Tax, Mumbai (Civil Appeal Arising out of SLP (C) No.26831/2004) delivered today, this Court observed. The expression conceal is of great importance. According to Law Lexicon, the word conceal means: to hide or keep secret. The word conceal is con plus celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of; to withhold knowledge of. The offence of concealment is, thus, a direct attempt to hide an item of income or a portion thereof from the knowledge of the income tax authorities. In Webster's Dictionary, inaccurate has been defined as: not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 187] 20. The omission of the word deliberate , thus, may not be of much significance. 21. Section 271(1)(c) remains a penal statute. Rule of strict construction shall apply thereto. Ingredients of imposing penalty remains the same. The purpose of the legislature that it is meant to be deterrent to tax evasion is evidenced by the increase in the quantum of penalty, from 20% under the 1922 Act to 300% in 1985. 22. 'Concealment of income' and 'furnishing of inaccurate particulars' carry different connotations. Concealment refers to deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi. 23. We may notice that in Commissioner of Income-Tax v. Jeevan Lal Sah 1994 (205) ITR 244, this Court dealt with the amendment of Section 271(1)(C) made in the year 1964 to hold : Even after the amendment of 1964, the penalty proceedings, it is evident, continue to be penal proceedings. Similarly, the question whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income continues to remain a question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are well established principles for the interpretation of such a penal provision. Such a provision has to be construed strictly and narrowly and not widely or with the object of advancing the object and intention of the legislature. 26. Referring to a large number of decisions, it was furthermore observed : 27. Every statutory provision for imposition of penalty has two distinct components: (i) That which lays down the conditions for imposition of penalty. (ii) That which provides for computation of the quantum of penalty. Section 271(1)(c) and clause (iiii) relate to the conditions for imposition of penalty, whereas, on the other hand , Explanation 4 to Section 271(1)(c) relates to the computation of the quantum of penalty. 28. The provisions of Section 271(1)(c)(iii) prior to 1.4.1976, and after its amendment by the Finance Act, 1975 with effect from 1.4.1976, later provisions being applicable to the assessment year in question, being substantially the same except that in place of the word 'income' in sub clause (iii) to sub clause (c) of Section 271 prior to its amendment by Finance Act, 1975, the expression amount of tax sou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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