TMI Blog2009 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the order of the Income Tax Appellate Tribunal (for short `the Tribunal), Jabalpur Bench, on following substantial questions of law:- (i) "Whether on the facts and in the circumstances of the case, the levy of penalty u/s 271 (1)(c) of the Income Tax Act 1961 is legal and valid when the Assessing Officer illegally assumed jurisdiction for levy of penalty without recording proper satisfaction about concealing the true and correct particulars of income? (ii) Whether the order of the Tribunal is perverse and vitiated in law in holding that non-production of a/c. books was intentional when in quantum appeal the Tribunal has itself held that ...."the A.O. was not justified in drawing the inference that the assessee did not produce the books of account intentionally (para 5) and the estimated disallowance of expenses was reduced to Rs. 2 lakhs (Para 7). The disallowance of expenses was not that these were not actually incurred but because of legality of disallowance and being considered excessive on estimated basis?" 2. Briefly stated facts of the case are that the appellant firm filed its return for the assessment year 1993-94 declaring income of Rs.6,12,700/- on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as to how the expenditures claimed were not excessive or the expenditures claimed were in relation to the business of the assessee and were of allowable in nature while computing the business income. In the absence of any explanation from the assessee, the provision of explanation 1 to Section 271 (1)(c) is applicable, which lays down that the assessee is guilty of concealment of particulars of income in such circumstances and it is a deemed concealment. 6. Shri Ashish Surana, learned counsel for the appellant submitted that from perusal of assessment order, it would be evident that addition of Rs.3 lakhs was made only on the ground that the assessee did not produce books of account. The Tribunal accepting the explanation of the appellant held that failure to produce books of account was due to reasonable cause because accountant of the assessee was descended and books of account was with him. He further submitted that mere disallowance of expenses does not mean concealment of income or furnishing inaccurate particulars. Concealment of income and furnishing inaccurate particulars carries different connotation whereas, concealment refers to deliberate act on the part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not automatic. Levy of penalty is not only discretionary in nature but such discretion is required to be exercised on the part of the assessing officer keeping the relevant factors in mind. "Concealment of income" and "furnishing of inaccurate particulars" are different. Both concealment and furnishing inaccurate particulars refer 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. Although it may not be very accurate or apt but suppressio veri would amount to concealment, suggestio falsi would amount to furnishing of inaccurate particulars. Hence the submission of the Revenue that concealment or furnishing of inaccurate particulars would overlap each other cannot be accepted; the same would not mean that they do not represent different concepts. Had they not been so, Parliament would not have used the different terminologies." 11. In the matter of T. Ashok Pai (Supra), Bench of two Judges of the Supreme Court relying upon the judgment in the matter of Dilip N. Shroff, held that:- "The order imposing penalty is quasi-criminal in nature and, thus, burden lies on the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns added to Section 271 (1)(c) in that entirety also indicate the element of strict Liability on the assessee for concealment or for giving inaccurate particulars while filing returns. The judgment in Dilip N. Shroff's case (supra) has also not considered the provisions of Section 276C of the Income Tax Act. Therefore, in our view, the judgment in the case of Dilip N. Shroff v. Jt. CIT (supra) needs consideration by the larger Bench of this Court particularly when it has ramifications not only regarding provisions of the Income Tax Act but also with regard to the provisions of Sections 3A and 11 AC of the Central Excise Act and Rule 96ZQ (5) of the Central Excise Rules." 13. Overruling the law laid down in the case of Dilip N. Shroff, it was held thus:- "17. It is of significance to note that the conceptual and contextual difference between Section 271(1)(c) and Section 276-C of the IT Act was lost sight of in Dilip Shroff case. 18. The Explanations appended to Section 271(1)(c) of the IT Act entirely indicates the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilip N. Shroff case has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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