TaxTMI 
TaxTMI 
2010 (9) TMI 155
X X X X Extracts X X X X
X X X X Extracts X X X X
....001-02 the revenue has raised the following substantial question of law:- 1. Whether the Income Tax Appellate Tribunal was correct in law and on facts in deleting the penalty of Rs. 20,22,944/-, imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act? 2. Whether or not the findings recorded by the Income Tax Appellate Tribunal in its order are perverse in law, in as much as it has disregarded the relevant material and evidence placed on record and submissions made by the appellant? 3. Whether in view of the facts and under the circumstances of the case the Tribunal was legally correct in dismissing the appeal of the department on the ground that "allocation of expenses between the head offic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the total income as nil. At the relevant time, the assessee was engaged in the manufacture of flavoured chewing tobacco and kiwam. The manufacturing units are located at Barotiwala (HP) and Agartala. Deduction was claimed under Sections 80-1A and 80-IB of the Act. Eventually, an assessment order was framed under Section 143(3) on 28th February, 2004 determining the income of the assessee at Rs. 25,14,97,714/-. The penalty was computed at Rs. 51,14,309/- as the deduction claimed under Sections 80-IA and 80-IB was not allowed. 5. Being dissatisfied with the said order, the assessee preferred an appeal before the CIT(A) and the CIT(A) reduced the allocation of expenses to Rs. 44,68,845/-. 6. In the penalty proceeding, the assessee had....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hvardhan Chemicals & Minerals Vs. DCIT 58 Taxman 234. In that case also, the deduction admissible under sec. 80-HH and 80-I was reduced by the Assessing Officer. The ITAT observed that penalty under sec. 271(1)(c) would not be imposable upon the assessee in such situation because computation of deduction admissible under those provisions was a debatable issue. Similar are the facts before us. Allocation of expenses between the head office and the unit would always be a debatable issue. After considering the detailed order of the learned CIT(Appeals), we do not see any reason to interfere in it. Thus, the appeal filed by the revenue is dismissed." 8. In this context, we may refer with profit a recent decision of the Apex Court in Commissi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT was upset. In Union of India v. Dharamendra Textile Processors, after quoting from section 271 extensively and also considering section 271(1)(c), the Court came to the conclusion that since Section 271(1)(c) indicated the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inaccurate' has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." 11. We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no qu....