TaxTMI 
TaxTMI 
2017 (3) TMI 886
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....t was pleaded that when assessment order was passed u/s. 143(3) r.w.s.147 of the Act by the Assessing Officer, the penalty proceedings were initiated for different reasons i.e., for furnishing inaccurate particulars of income, whereas explanation -1 to section 271(1)( c) was initiated for concealment and not for furnishing inaccurate particulars. Reliance was placed upon the decision in 292 ITR 11 (Supreme Court). The crux of the argument is that explanation-1 is applicable for concealment and not for furnishing inaccurate particulars, therefore, penalty will not survive. 4. On the other hand the learned DR Shri Rajat Mittal, thought defended confirmation of penalty, but did not controvert the factual matrix. 5. We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee kept fixed deposits with the bank and such deposits were auto renewed. No pay outs were made to the assessee whereas the bank had been deducting TDS on the accrued interest. The assessee, when realized, immediately filed revised returns on 19/08/2011, declaring interest income on FDs before an investigation is made by the department as is evident....
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....crept in is not acceptable." 7. Mr. G. Sarangan, learned senior counsel appearing on behalf of the appellant, would submit that the Tribunal having arrived at a finding of fact that the appellant was not guilty of deliberate concealment of his income and thus, having no mens rea in this behalf, the impugned judgment cannot be sustained. In any event, it was urged, no specific question having been referred as to whether the findings of the Tribunal are perverse or not, the High Court committed a manifest error in differing with the findings of fact arrived at by the Tribubnal. 8. Mr. B. Datta, learned Additional Solicitor General appearing on behalf of the respondent, on the other hand, would submit that the Assessing Authority as also the Commissioner of Income Tax having arrived at a finding of fact that the appellant was guilty of deliberate concealment of his income, the Tribunal was not correct in interfering therewith. 9. Reference of the question to the High Court as noticed hereinbefore was general in nature. No question was referred as to whether the finding of the Tribunal was perverse or not. Existence of mens rea is essentially a question of fact. The Tribunal alone,....
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....on, the word "conceal" means: "to hide or keep secret. The word "conceal" is con plus celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of; to withhold knowledge of. The offence of concealment is, thus, a direct attempt to hide an item of income or a portion thereof from the knowledge of the income tax authorities." In Webster's Dictionary, "inaccurate" has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript." 15. It signifies a deliberate act of omission on the part of the assessee. Such deliberate act must be either for the purpose of concealment of income or furnishing of inaccurate particulars. 16. The term 'inaccurate particulars' is not defined. Furnishing of an assessment of value of the property may not by itself be furnishing of inaccurate particulars. Even if the explanations are taken recourse to, a finding has to be arrived at having regard clause (a) of Explanation 1 that the Assessing Officer is required to arrive at a finding that the explanation offered by an assessee, in the event, h....
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....uld not constitute a deliberate act of suppressio veri or suggestio falsi. 23. We may notice that in Commissioner of Income-Tax v. Jeevan Lal Sah 1994 (205) ITR 244, this Court dealt with the amendment of Section 271(1)(C) made in the year 1964 to hold : "Even after the amendment of 1964, the penalty proceedings, it is evident, continue to be penal proceedings. Similarly, the question whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income continues to remain a question of fact. Whether the Explanation has made a difference is _ while deciding the said question of fact the presumption created by it has to be applied, which has the effect of shifting the burden of proof. The entire material on record has to be considered keeping in mind the said presumption and a finding recorded." 24. The question came for consideration of this Court yet again in K.C. Builders and Anr v. Assistant Commissioner of Income-Tax 2004 (265) ITR 562 = (2004) 5 SCC 731), wherein it was held : "One of the amendments made to the abovementioned provisions is the omission of the word 'deliberately' from the expression 'deliberatel....
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.... Explanation 4 to Section 271(1)(c) relates to the computation of the quantum of penalty. 28. The provisions of Section 271(1)(c)(iii) prior to 1.4.1976, and after its amendment by the Finance Act, 1975 with effect from 1.4.1976, later provisions being applicable to the assessment year in question, being substantially the same except that in place of the word 'income' in sub clause (iii) to sub clause (c) of Section 271 prior to its amendment by Finance Act, 1975, the expression "amount of tax sought to be evaded" have been substituted. Explanation 4 inserted for the purpose of clause (iii) where the expression "the amount of tax sought to be evaded", was inserted had in fact made no difference in so far as the main criteria, namely, absence of tax continued to exist, prior to or after 1.4.1976, changing only the measure or the scale as to the working of the penalty which earlier was with reference to the 'income' and after the amendment related to the 'tax sought to be evaded'. The sine qua non which was there prior or after the amendment on 1.4.1976 to the fact that there must be a positive income resulting in tax before any penalty could be levied conti....