TaxTMI 
TaxTMI 
2011 (5) TMI 335
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....e Tribunal that the claim made by your petitioner in the revised return for deduction under Section 80HHC of the Act in respect of the foreign flight catering business was not bona fide or that the said claim was found to be false in assessment proceeding are perverse and based on no material whatsoever. "(ii) Whether making a claim of deduction under Section 80HHC of the Act in the revised return in respect of the foreign flight catering business could attract the penalty under Section 271(1)(c) of the Act and imposition of such penalty is sustainable in law." The facts giving rise to filing of this appeal may be summed up thus: a) For the Assessment Year 1998-99, the assessee filed its return of income on November 30, 1998 disclosing the total income of Rs.39,61,89,047/-. The said return was revised by the assessee on December 17, 1999 and the income disclosed in such revised return was shown to be Rs.38,98,00,700/-. b) The said revised return was filed after making a claim of deduction under Section 80HHC of the Act in respect of the income derived from the foreign catering business. Along with the revised return, the assessee duly filed the auditor's ce....
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....ppellate authority by his order dated November 29, 2004 set aside the order imposing penalty under Section 271(1)(c) of the Act. h) Against the said order of the CIT (A), the Revenue filed an appeal before the Tribunal and by the order impugned in this appeal, the Tribunal set aside the order of the CIT (A) with a direction, however, for reducing the amount of penalty from three times the tax involved to the amount of tax. Being dissatisfied, the assessee has come up with the present appeal. Mr. Bajoria, the learned Senior counsel appearing on behalf of the appellant, has strongly criticized the order passed by the Tribunal below by contending that the Tribunal below without any just reason set aside the order passed by the CIT (A) and restoring the penalty merely because his client unsuccessfully lodged a claim under Section 80HHC of the Act. Mr. Bajoria contends that in order to apply the provision contained in Section 271(1)(c) of the Act, it must be proved that the ingredients of the said section are present. In other words, it must be proved that either his client had concealed particulars of his income or furnished inaccurate particulars of such income. Mr. Bajoria co....
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....ppeal under Section 260A of the Act at the instance of the assessee challenging the order of the Tribunal refusing the benefit under Section 80HHC is pending before this Court, we have in this case, not gone into the question whether the assessee is really entitled to the said benefit and we have decided to proceed with the assumption that the assessee unsuccessfully claimed the said benefit. After hearing the learned counsel for the parties and after going through the materials on record, we agree with Mr. Bajoria, the learned Senior Advocate appearing on behalf of the assessee, that merely because a claim of an assessee did not find favour with the assessing authority, the same cannot, or in any case should not attract the provision contained in Section 271(1)(c) of the Act. In this connection, we may profitably refer to the decision of the Supreme Court in the case of C.I.T., Ahmedabad vs. Reliance Petro-products Pvt. Ltd (supra), relied upon by Mr. Bajoria where the said Court in details dealt with provisions contained in Section 271(1)(c) of the Act and its applicability as well as the earlier decisions of the said Court on the points. The following observations of the Court i....
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....tion 271(1) (c), conditions stated therein must exist." Therefore, it is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the Return filed 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. In Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and Anr. [2007(6) SCC 329] : (AIR 2007 SC (Supp) 1280 : 2007 AIR SCW 4323), this Court explained the terms "concealment of income" and "furnishing inaccurate particulars". The Court went on to hold therein that in order to attract the penalty under Section 271(1)(c), mens rea was necessary, as according to the Court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause (iii) of Section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it....
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....er of Income Tax, Mumbai and Anr. (cited supra), where the Court explained the meaning of the terms "conceal" and "inaccurate". It was only the ultimate inference in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and Anr. (cited supra) to the effect that mens rea was an essential ingredient for the penalty under Section 271(1)(c) that the decision in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and Ann (cited supra) was overruled. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter 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". 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 detail....