TaxTMI 
TaxTMI 
2015 (4) TMI 1165
X X X X Extracts X X X X
X X X X Extracts X X X X
....lable to be canvassed in favour of the assessee, it is already held against the assessee and therefore, this question be held as rejected against the assessee. Learned counsel for the appellant only made submissions with regard to justification of not accepting the explanation of the appellant for the purpose of an amount of Rs. 1,99,82,000/ - as indicated in the question framed. Assessee is a Cooperative society registered under the M.P. Cooperative Societies Act of 1960. The Society carries out its activity by forming a Cooperative of Sugarcane growers, farmers and workers belonging to Khandwa District in M.P. an economically backward area of State of Madhya Pradesh. The Society runs a Sugar Factory at Naval Nagar, Burhanpur, District Khandwa. The affairs of the society are managed by the Board of Directors. In the return of income submitted by the Society for the assessment year 1992 -93 penalty in question under Section 271(1)(c) has been imposed upon the appellant. After the assessment proceedings were held the AO found that the assessee has credited an amount of Rs. 89,49,367/ - on account of previous years adjustment. However, it was held by the Assessing Officer that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsel appearing for the assessee invited our attention to the statement of fact and with regard to the amount in question and the imposition of penalty, it was submitted by him that even though the assessee was required to pay to the financial institute a sum of Rs. 8.50 Crore and this amount was to be paid by 30th of June, 1992 as per the agreement and the one time settlement entered into with the financial institute, if the entire amount of Rs. 8.50 Crore was not paid by 30th June, 1992 then there was a provision for forfeiting the waiver of interest/damages and charging of compound interest. It was said that the entire outstanding amount of Rs. 8.50 Crore could not be paid on or before 30th June, 1992. Only a sum of Rs. 5,02,5000/ - could be paid and the remaining amount was paid only by 7.4.93. As such the assessee was under the bonafide belief that till assessee may not be entitled to waiver of interest or damages. This was to be forfeited and compound interest liable to be imposed. That is why assessee showed interest on the amount payable to the financial institute. It is emphasized by Shri Nema that the assessee society due to non payment of the amount as per the settlement ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the assessee having violated the provisions of law, imposition of penalty under Section 271(1)(c) read with explanation thereof is proper. For the purpose of imposing penalty under the aforesaid provisions mens rea, bad intention, malafide intention etc. are not applicable and in view of the judgment in the case of Dharamendra Textile Processors (supra), no further indulgence into the matter is called for. Shri Sanjay Lal took pains in taking us through the facts of the case and tried to emphasize that the question of mens rea or the intention of the appellant in this case is of no consequence because appellant did not disclose the correct fact with regard to payment of interest on 2.11.92 when the original return was filed and even when the revised return was filed on 26.11.93 and even when the assessment was completed sometimes in the year 1993 -1994. Accordingly, he submits that in view of the aforesaid, the findings recorded by the Tribunal is not correct. We have considered the rival contentions and we find that even though in the case of Dharamendra Textile Processors & Ors. (supra) in the matter of imposition of penalty for concealment of income under Section 271(1)(c) of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he matter was again considered by the Supreme Court in the case of Price Waterhouse Coopers (P) Ltd. Vs. Commissioner of Income Tax, Kolkatta - [2012]25 Taxmann.com 400 (SC) and it has been held that if the assessee has committed an inadvertent and bonafide mistake or error and had not intended to conceal his income or furnishing inaccurate price, the penal clause should not be enforced. The Madras High Court in the case of Durr India (P) Ltd. (supra) has considered the matter and after taking note of various judgments of the Supreme Court including the judgment in the case of Reliance Petroproducts (P) Ltd., Dilip N. Shroff, Dharmendra Textile Processors (supra) has laid down principle to say that penalty being a civil liability, the requirement of mens rea is not an essential element. But, if the claim of the assessee is bonafide then mere submission of an inaccurate particular by itself could not be held against the assessee under the provision of section 271(1)(c), it is held that if a bonafide error has resulted in submission of inaccurate particular and if there is justification for making such a statement, penalty should not be imposed. That being the legal position, if w....