TaxTMI 
TaxTMI 
2011 (11) TMI 46
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....ny software, but merely provided services of technicians and helpers for shooting by foreign clients. The AO, therefore, disallowed the deduction under Section 80HHF of the Act claimed by the assessee and determined the total income of the assessee at Rs. 62,12,980. The AO also initiated proceedings under Section 271(1)(c) of the Act. 3. Insofar as the quantum assessment is concerned, though the CIT (A) had allowed the appeal and deleted the addition holding that the assessee was entitled to Section 80HHF of the Act, the Income Tax Appellate Tribunal ("the Tribunal" for brevity) reversed the decision of the CIT (A) and restored the order of the AO. The order of the Tribunal was confirmed by this Court as well. Thus, the issue that the assessee was not entitled to the aforesaid deduction under Section 80HHF of the Act attained finality. 4. Insofar as the penalty proceedings are concerned, the AO imposed the penalty of Rs. 10,94,657/- on the ground that wrong claim of deduction under Section 80HHF of the Act was preferred. However, this penalty was deleted by the CIT(A) and the order of the CIT(A) was affirmed by the Tribunal as well relied upon the judgment of the Supreme Court in....
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....y him is not substantiated and he fails to prove that such explanation is bona fide and that all the facts relating the same and material to the computation of his total income has been disclosed by him, for the purposes of Section 271(1)(c), the amount added or disallowed in computing the total income is deemed to represent the concealed income. The penalty spoken of in Section 271(1)(c) is neither criminal nor quasi criminal but a civil liability; albeit a strict liability. Such liability being civil in nature, mens rea is not essential. In the case of Union of India and Ors. v. Dharamendra Textile Processors and Ors. (2008) 306 ITR 277, a three judge Bench of this Court held that Dilip N. Shroff did not lay down correct law as the difference between Section 271(1)(c) and Section 276(c) of the Act was lost sight of. The Court held that the explanation appended to Section 271(1)(c) indicates element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The Court held thus: The Explanations appended to Section 271(1)(c) of the Income Tax Act, 1961, indicate the elements of strict liability on the assessee for concealment....
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....tion 271(1)(c) of the Income Tax Act, 1961 (in short the 'IT Act') taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the 'Rules') and a decision of this court in Chairman, SEBI v. Shriram Mutual Fund and Anr. 2006 (5) SCC 361 and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench After referring to a number of decisions on interpretation and construction of statutory interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows: 26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union ....
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....he ld. CIT (A), which have been reproduced earlier, are that the claim of the assessee was rejected on legal ground. There is no suggestion in the assessment order or the penalty order that the assessee has deliberately or knowingly furnished inaccurate particulars of income. The claim was supported by audit report and there is no basis to hold that the claim was dishonestly made in collusion with the auditor. Therefore, it was held by him that the claim cannot be said to be a false claim. Although the ingredient of contumacious conduct or mens rea is no longer required to be proved by the revenue in case of levy of penalty, as held by Hon'ble Supreme Court in the case of Union of India Vs. Dharmendra Textile Processors (2008) 306 ITR 27, the other finding of the ld. CIT (A) that the claim was rejected on legal ground, it was supported by independent audit report and ail evidences were filed before the AO still hold good. In the case of Reliance Petro Products (P) Ltd., the decision of Hon'ble Supreme Court is that if all facts in respect of a claim are correctly mentioned or stated before the AO, then, it cannot be said making a claim and disallowance thereof will lead to the infe....