TaxTMI 
TaxTMI 
2013 (3) TMI 264
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....the bank statement and stated that he had not deposited cash of Rs.47,36,000/- on a single day and that the cash deposit was spread over for the period of twelve months and the deposit was made out of sales and also recovery from the sundry debtors. As such the assessee had admitted the net profit of Rs.3,92,649/- being 5% of the total gross income of Rs.78,52,980/-. Further, the assessee agreed for addition of 3% being the profit which works out to Rs.2,35,589/-. Thus the Income Tax Officer assessed the income as Rs.6,58,240/-. Consequently, the Assessing Officer imposed penalty of Rs.4,28,706/- being 300% by invoking his power under Section 271(1)(c) of the said Act. 3. Aggrieved against the said imposition of penalty, assesee filed appeal before the Commissioner of Income Tax (Appeals) in ITA.No.20/08-09. The Appellate Authority confirmed the order of penalty by holding that the assessee had not shown the deposits and he had not given any explanation, except saying that books of accounts were not maintained. The Appellate Authority further observed that the reasons for increase the profit percentage from 5% to 8% was not clear. Consequently, the appeal filed by the assessee w....
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....hen the Assessing Officer himself has found that the said deposit was not made on a single day, in our considered view, it cannot be said that the assessee had failed to furnish complete particulars. The Tribunal has categorically found that in the return, the assessee had shown the income on estimate basis at Rs.1,99,440/- and such estimation of income was enhanced by the Assessing Officer and consequently, imposed penalty. Therefore, from the above facts it is clear that levy of penalty was based on the estimation of income. In our considered view, there cannot be any imposition of penalty based on estimation of income. 7. The Tribunal has rightly found that the present case is not a fit case for levy of penalty under Section 27(1)(c) of the Act by finding that the initial impression of the Assessing Officer was incorrect with regard to the deposit of a sum of Rs.47,36,000/-. The Tribunal has also pointed out that it was not clear as to whether, according to Assessing Officer, it was a case of suppression of turn over or of estimation of income at a lower rate. When the Revenue itself has not come out with clear case of suppression of turn over and where there was no specific ....
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....he word particularsused in Section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income. We do not think that such can be the interpretation of the words concerned. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In CIT v. Atul Mohan Bindal (2009) 225 CTR (SC) 248 : (2009) 28 DTR (SC) 1 : (2009) 9 SCC 589, where this Court was considering the same provision, the Court observed that the AO has to be satisfied that a person has concealed the parti....
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..... Shroff v. Jt. CIT & Another (supra) was upset. In Union of India v. Dharamendra Textile Processors (cited supra) 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 element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of Section 271(1)(c) read with the Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under Section 276-C of the Act. The basic reason why the decision in Dilip N. Shroff v. Jt. CIT and another (cited supra) was overruled by this Court in Union of India v. Dharamendra Textile Processors (cited supra) was that according to this Court the effect and difference between Section 271(1)(c) and Section 276-C of the Act was lost sight of in Dilip N. Shroff v. Jt. CIT and another (cited s....