TMI Blog2013 (1) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Apex Court are not applicable, being, on different facts. It was strongly contended that the assessee consented for addition after the concealment/furnishing of inaccurate particulars were detected by the Department otherwise it would have gone unnoticed. It was emphatically contended that inspite of the fact that auditor pinpointed the mistakes to the assessee, still the assessee chose not to declare the same. It was contended that the Assessing Officer justifiably made the addition/disallowances. Our attention was invited to various pages of the penalty order/assessment order. 2.1 On the other hand, the learned Counsel for the assessee contended that due to wrong grouping of expenses under the head rate and taxes , the mistake occurred, due to oversight and the assessee agreed for addition when the mistake was pointed out by the Assessing Officer for inadmissibility of the amount u/s 40(a) of the Act. Identical was the situation for entry tax liability. For declaration of capital gain and deduction of tax at source, it was contended that the assessee agreed for addition. The crux of the arguments is that it was a clerical mistake and no concealment as such. The learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. 3.1 The assessee was also asked for the proof of payment of entry tax amounting to ₹ 31,94,466/- shown in item no. 21A(B) of the audit report. The assessee vide written reply on 15.10.2010 submitted as under: Your honour has required the assessee to submit the proof of the payment made of ₹ 31,94,466/-. Towards Entry tax for the FY 2007-08. In this regard it is submitted that there is some dispute going on with the Sales Tax Department regarding the liability of the payment of such tax. Since the assessee is following the mercantile system of accounting therefore, provision for the same has been made in the books of accounts and shown as payable for the said amount. Since the same is outstanding due to dispute therefore the same is disallowable while computing the taxable income of the assessee as per the provision of section 43B of Act, it is therefore, submitted that the same may be disallowed u/s 43B of the Act and same may be allowed in the year of payment as per the provision of section 43B of the Act. If the aforesaid reply of the assessee is analysed, it is uncontroverted fact that even the auditor of the assessee pointed out such liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de questionnaire dated 26.10.2010 regarding bifurcation of investment for FY to 2007-08. It was found by the Assessing Officer that besides investment of 3 crores in Kotak Mahindra (date of purchase 5.11.2007), further investment of ₹ 3,00,04,394/- has been made on 7.11.2007 which was not found in the details of investment submitted on 12.10.2007. The assessee vide submission dated 16.11.2007 agreed for short term capital gain of ₹ 4,394/-. It was added to the total income. 3.4 On the issue of non-deduction of tax at source on freight payment, the assessee agreed that no tax was deducted on these payments which resulted addition of ₹ 77,308/-. 3.5 If the aforesaid additions are examined cumulatively, one fact is oozing out that only after detection of concealment of income by A.O. during scrutiny assessment proceedings, the assessee agreed for addition and not suo motu. It is also pertinent to mention here that even after detection by the Department, the assessee neither filed the revised return of income nor preferred any appeal against these additions/disallowances. The Assessing Officer in such a situation concluded as under: I have considered, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Reliance Petro Products (P) Ltd (Supra) . We have perused both decisions. In the case of Dharampal Premchand (supra), the assessee was manufacturer of chewing Tobacco and Kiwam, claimed deduction u/s 80IA and 80IB of the Act. The assessment was framed denying the claimed deduction. On the basis of such disallowance, penalty was imposed u/s 271(1) (c) of the Act. On appeal, the Ld. CIT (A) deleted the penalty on the ground that the assessee has disclosed all material facts pertaining to the computation of deduction. On appeal, the Tribunal affirmed the order of the CIT (A). On further appeal by the department before the Hon ble High court, the stand of the tribunal was affirmed by placing reliance upon the decision in Reliance Petro Products Pvt. Ltd. (322 ITR 158) ( SC). We find that the facts of both these cases are entirely different because in both the cases, a claim was made by the assessee whereas in the present appeal, inaccurate particulars, leading to concealment of income, were filed by the assessee. In the case of reliance Petro Products, the Hon ble Apex Court clearly held that even if a wrong claim is made, that itself does not tantamount to concealment of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been held by the Hon'ble Supreme Court. We also find that the mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. We, therefore, accept the contention of Mr. Shome and dismiss the appeal answering the questions in the negative. 14. During the course of hearing this appeal against the judgment and order of the Calcutta High Court, we had required the assessee to explain to us how and why the mistake was committed. 15. The assessee has filed an affidavit dated 14th September, 2012 in which it is stated that the assessee is engaged in Multidisciplinary Management Consulting Services and in the relevant year it employed around 1000 employees. It has a separate accounts department which maintains day to day accounts, pay rolls etc. It is stated in the affidavit that perhaps there was some confusion because the person preparing the return was unaware of the fact that the services of some employees had been taken over upon acquisition of a business, but they were not members of an approved gratuity fund unlike other employees of the assessee. Under these circumstances, the tax return was finalized and filled in by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther conceal its income or furnish inaccurate particulars. 21. Under these circumstances, the appeal is allowed and the order passed by the Calcutta High Court is set aside. No costs. 5.1 We have perused the aforesaid order from Hon ble Apex Court. We find that in para 15 of the order, an affidavit dated 14.9.2012 was filed by the assessee tendering that there were around 1000 employees, having separate accounts, payroll etc. and due to acquisition of business, there was confusion in preparing the return as some of the members were not having approved gratuity funds unlike other employees and in para 18, the tax audit report was filed along with the return indicating error in the computation in the return of income which was even not noticed by the assessee as well as by the Assessing Officer, who framed the assessment. In para 19, another fact has been mentioned that even in tax audit report, it was suggested that there was no concealment of income. Even the assessee filed the revised return. In view of these peculiar facts, the Hon ble Apex Court reached to a particular conclusion that there was inadvertent and bona fide mistake without intending to conceal its income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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