TaxTMI 
TaxTMI 
2010 (4) TMI 386
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....missioner of Income-tax (Appeals) cancelling the penalty under section 271(1)(c) of the Income-tax Act, 1961 levied by the Assessing Officer ?" 2. Briefly stated the facts of the case, as projected in the impugned order, are that the assessee filed return for the year under consideration declaring total income at Rs. 70,818. The Assessing Officer rejected the book results and made an addition of Rs. 1,70,920 by estimating the net profit at 10 per cent. of receipt as against 6.36 per cent. shown by the assessee. Penalty proceedings were initiated under section 271(1)(c) of the Income-tax Act, 1961 (for short "the Act") and the Assessing Officer imposed penalty of Rs.60,000 (annexure P/2) vide order dated November 19, 1996. The appeal pref....
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....iness in the same line. In view of the above, I am of the view that the order of the learned Commissioner of Income-tax (Appeals) in cancelling the penalty cannot be faulted with. The order of the Com-missioner of Income-tax (Appeals) is upheld." 4. Shri Rajeev Shrivastava, learned counsel for the appellant/Revenue would argue that the assessee did not produce the relevant books of account and other documents in support of his return at the time of assessment proceeding and it was stated that he did not maintain regular books of account due to the absence of accountant. Rejecting the aforesaid explanation, taxable income was estimated at 10 per cent. of the total receipt. The Assessing Officer also held that the assessee has tried to con....
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....009] 317 ITR 1 (SC), it was argued that if the Assessing Officer is satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income, such person may be directed to pay penalty. 8. On the other hand, Shri Ashok Patil, learned counsel for the respondent/assessee would argue that in penalty proceeding under section 271(1)(c) of the Act, strict proof of concealment of income is required. Where assessment is made on the basis of estimate, the finding of concealment in such circumstances, is not sufficient for levying penalty. 9. We have heard learned counsel for the parties. 10. The question for our consideration for deciding this appeal is whether the Commissioner of Income-t....
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....idering the nature and applicability of section 271(1)(c) and Explanation 1 thereto, held that even if the statute says that one is liable for penalty if one furnishes inaccurate particulars, the same may not by itself be enough to hold that nothing more is needed if the particulars furnished are found to be inaccurate. An element of mens rea is needed before penalty can be imposed. Concealment and furnishing inaccurate particulars refer to a deliberate act or omission on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi. Another Division Bench of the Supreme Court, doubting the correctness of the above view expressed in Dilip N. Shroff referred the controvers....
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....ase is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no questi....