Mens rea not required for penalty under section 273(c) when assessee fails to show reasonable cause

In penalty proceedings under section 273(c) of the Income-tax Act, the assessee must establish reasonable cause, and the revenue is not required to prove mens rea before penalty can be imposed. The Madhya Pradesh High Court treated section 273(c) as materially similar to section 271(1)(a) for this purpose and applied the settled principle that guilty intent is not a necessary ingredient for penalty. Once the assessee's explanation is rejected, the penalty may be sustained without proof of mens rea by the revenue.

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Issues: Whether, in proceedings for penalty under section 273(c) of the Income-tax Act, 1961, rejection of the assessee's explanation showing reasonable cause was sufficient to sustain the penalty, and whether the revenue was required to prove mens rea before the penalty could be imposed.

Analysis: The Court held that there was no material difference, for this purpose, between section 273(c) and section 271(1)(a) of the Income-tax Act, 1961. Relying on the settled view that mens rea or guilty intent is not a necessary ingredient for the imposition of penalty under section 271(1)(a), the Court held that the same principle applied to section 273(c). The burden to show reasonable cause lay on the assessee, and once the explanation was rejected, the penalty could validly be sustained without proof of mens rea by the revenue.

Conclusion: The question was answered in the affirmative and against the assessee. Penalty under section 273(c) was held sustainable without the revenue proving mens rea.

Ratio Decidendi: Where the statutory language governing penalty does not materially differ, mens rea is not a necessary ingredient and the assessee must establish reasonable cause to avoid penalty.

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