TMI Blog2008 (12) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income with an intention to evade tax ? 2) Whether the Tribunal was justified in law in confirming the imposition of penalty under Section 271(1)(c) of the Act to the extent of 100% in the absence of any finding that the assessee was guilty of any mens rea or deliberate intention to avoid the payment of tax ? Dr. Debi Pal, learned Senior Advocate appearing in support of the appeal contended before us that the learned Tribunal even after accepting the fact that there was a human error committed by the appellant, did not consider the question of imposition of penalty on the appellant to the extent of 100%. It is not in dispute that at the time of hearing before the Assessing Officer as well as before the Commissioner of Income Tax (Appeals), a penalty was imposed by the Assessing Officer at the rate of 300%, which was confirmed by the Commissioner of Income Tax (Appeals) by his order in the matter. Dr. Pal strenuously urged before us that there is no reason of imposing such penalty on his client since, according to him, there is no question of attracting Section 271(1)(c) of the Income Tax Act, 1961 by the Assessing Officer, which was confirmed by Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. Dr. Pal s endeavour before us was only to show that whatever action has been taken by the appellant is nothing but a bona fide one. Dr. Pal further submitted that Explanation-1 specifically stated that if a person fails to offer an explanation and if it is found that to be a false one, then and then only Section 271(1)(c) of the Act would apply in the facts and circumstances of the given case. To substantiate his case, Dr. Pal further drew our attention to the decisions reportedin 241 ITR 124 (Commissioner of Income Tax vs. Suresh Chandra Mittal), 251 ITR 9 (Commissioner of Income Tax vs Suresh Chandra Mittal) and 291 ITR 318 (Udayan Mukherjee vs Commissioner of Income Tax). In 241 ITR 124 (MP) Dr. Pal submitted that the initial burden lies on the Revenue to establish that the assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so passed by the learned Tribunal. Mr. Shome further drew our attention to certain facts that the original return was filed on 30th November, 2000 disclosing a total income of ₹ 21,33,94,600/- and the same was assessed under section 143(1) of the Act on 23rd November, 2001. Subsequent thereto, a notice was served on the assessee under Section 148 of the said Act and the assessee company pursuant thereto filed return on 19th February, 2004 in terms of the said notice dated 22nd January, 2004. But in the said revised reutrn, which was filed in accordance with Section 148 of the said act, the assessee company specifically stated that the total assessment has been revised to the same amount as was shown in the earlier return. He further drew our attention to a letter of the company dated 16th February, 2004 which reads as follows : the company denies the allegation that any income has escaped assessment in respect of the aforesaid assessment year. The company had accounted for the entire income received/receivable during each of the relevant previous years in the accounts made up for the said previous years and had accordingly offered the same to tax in the returns of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiating reassessment proceedings. When such recorded reasons were given, the assessee after going through the details realized that it had inadvertently not offered to tax the impugned amount. Therefore, the assessee had vide letter dt.20th January, 2004 accepted that such amount should be disallowed under section 40A(7) . According to Mr. Shome the fact that would show that at every stage the assessee has specifically stated that they were not at fault and they have correctly filed their returns but the conduct of the assessee company would attract Section 271(1)(c) of the Act and Explanation-1 of the said act does not hold good and has no role to play in this matter. He further submitted that in Section 271(1)(c) of the Act it has been specifically stated either / or and if it is a concealment or if it is inaccurate, then also the said section does not apply and has no role to play. He further drew our attention to the order so passed by the Commissioner of Income Tax (Appeals) in the matter and pointed out that the findings of the Commissioner of Income Tax (Appeals) would show that the appellant has not disclosed the income to the extent of ₹ 23,70,306/- in its origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of proceedings being criminal or quasicriminal. The relevant considerations being the nature of the functions being discharged by the authority and the determination of the liability of the contravener and the delinquency. D. Mensrea is not essential element for imposing penalty for breach of civil obligations or liabilities . Mr. Shome relied upon a decision reported in 306 ITR 277 (Union of India Ors. Vs. Dharmendra Textiles Processors Ors.) where a Three Judge Bench of Hon'ble Supreme Court has held as follows : The Explanation appended to Section 271(1)(c) of the Income Tax Act, 1961, indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of Section 271(1)(c) read with the Explanation indicates that the section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C . Mr. Shome accordingly submitted that the appeal should be dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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