Tribunal Decision Upheld: Penalty Confirmed for False Tax Claim, No Wilful Intent Required

The court upheld the Tribunal's decision in Tax Case Appeals, confirming the penalty levy under Section 271(1)(c) of the Income Tax Act. It ruled in favor of the revenue, emphasizing that the appellant's false Research and Development expenditure claim without evidence constituted inaccurate particulars warranting penalty. The court clarified that wilful intent is not necessary for penalty under Section 271(1)(c) and that reporting losses does not exempt from penalty. Strict liability applied, leading to the dismissal of the appeals and the affirmation of the penalty levy.

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Issues:
1. Challenge to the order of the Tribunal regarding assessment under Section 153 C read with 143 (3) of the Income Tax Act, 1961.
2. Challenge to the confirmation of the penalty levy under Section 271 (1)(c) of the Act.

Issue 1: Assessment under Section 153 C read with 143 (3) of the Income Tax Act, 1961:
The appellant, in the Health Care Industry, filed an original return of income declaring "Nil" income for the assessment year 2006-07. A search under Section 132 of the Act was conducted, and a notice under Section 153 C of the Act was issued. The appellant claimed deduction for Research and Development expenditure, but the Assessing Officer disallowed it due to lack of evidence and absence of business activity. The appellant appealed, and the appellate authority set aside the penalty, but the ITAT restored it based on findings that no Research and Development work was conducted. The Tribunal's decision was challenged in the Tax Case Appeals.

Issue 2: Confirmation of penalty levy under Section 271 (1)(c) of the Act:
The appellant argued that penalty under Section 271(1)(c) was unwarranted as there was no wilful intent, only losses were reported, and no evidence was furnished for the claimed expenditure. The court rejected these arguments, emphasizing that the claim of Research and Development was false and bogus, constituting inaccurate particulars. The court clarified that mens rea is not required for penalty under Section 271(1)(c) and that losses being reported do not preclude penalty. Citing judicial precedents, the court upheld the levy of penalty, confirming the Tribunal's decision.

In conclusion, the court dismissed the Tax Case Appeals, confirming the Tribunal's orders and deciding in favor of the revenue. The court held that the strict liability under Section 271(1)(c) applied in this case where false deductions were claimed without supporting evidence, justifying the penalty levy.

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