2009 (12) TMI 663

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....XXI, Ahmedabad passed on 24-8-2007. 2. The penalty levied for the assessment year 2002-03 is Rs. 2,25,000 and for the assessment year 2003-04 is Rs. 2,77,600. The rate of penalty levied for both the assessment years is 100 per cent of the amount of tax sought to be evaded. 3. In both these cases, the assessee had provided for bonus commitment in its accounts. The said bonus liability was debited in the profit and loss account, by virtue of which, the taxable income was worked out after claiming deduction for the said bonus liability. In the course of assessment, it was noticed that the provision made was not actually paid to the employees as required under the provisions of law contained in section 43B. Accordingly, the said liability....

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....r side of the coin is that penalty cannot be imposed on an assessee only on the ground of mens rea. It is essential on the part of the revenue authorities as well, to establish that there was furnishing of inaccurate particulars of income and/or concealment of income. Therefore, apart from examining the Doctrine of mens rea, it is very essential to appreciate the facts and circumstances of the case. In this case, even though the assessee has claimed deduction of bonus in violation of section 43B, the assessee has paid the bonus amount subsequently in the ensuing assessment year, which in turn shows that the claim/computation was not misleading or malicious. In view of the method of accounting employed by the assessee, the liability to pay t....