2015 (11) TMI 916

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....on 271(1)(c) of the Act were heard together and are being disposed of by this consolidated order for the sake of convenience. I. T. A. No. 4364/Del/2013 : 2. The assessee is a non-banking finance company. The main source of income being from capital gains, interest income, rental income, dividend from sale of mutual funds. The assessee had filed return of income declaring total income at Rs. 2,83,25,511. The Assessing Officer noticed that the assessee had shown dividend income to the tune of Rs. 2,43,67,057 but no separate expenses incurred by it in lieu of this income had been shown. The assessee further submitted that the expenditure had been incurred as administrative expenses and they were statutory or necessary expenses, hence should....

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....a, observing that since the assessee itself had made disallowance of Rs. 2,43,670, this was only a case of difference of opinion, as according to the Assessing Officer rule 8D was applicable whereas as per the assessee rule 8D was not applicable. 5. We have considered the submissions of both parties and have perused the record of the case. Admittedly the assessee on its own had disallowed a sum of Rs. 2,43,670 under section 14A but the Assessing Officer computed the disallowance as per rule 8D at Rs. 35,71,608. The provision of rule 8D comes into play only when the Assessing Officer records a finding that having regard to the accounts of the assessee he is not satisfied with the correctness of the claim of the assessee in respect of such e....

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....e basis of which computation made under rule 8D was made by the Assessing Officer was false. We further find that the learned Commissioner of Income-tax (Appeals) in paras 5.1 to para 5.4 of his order has held as under: "5.1 Section 271(1)(c), provides for imposition of penalty in case the Assessing Officer, in the course of any proceeding under the Act, is satisfied that :  (i) any person had concealed particulars of his income, or  (ii) had furnished inaccurate particulars of such income. Further, after insertion of Explanation 1 to section 271(1)(c), the onus is on the assessee to show that there was no intention of concealment and not on the Revenue. 5.2 Mens rea was considered to be a necessary ingredient for levy of pen....

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....ischarged by the Department.  (iv) The Assessing Officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He should not begin with the presumption that the assessee is guilty.  (v) Though penalty proceedings under the Income-tax law may not be criminal in nature, they are still quasi-criminal requiring the Department to establish that the assessee has concealed his income.  (vi) It has to be understood that the Explanation to section 271(1)(c) is an exception to the general rule raising a legal fiction by which the burden which is ordinarily with the Department is sought to be placed on the assessee. This burden on the assessee is subject to 'cond....