TaxTMI 
TaxTMI 
2017 (9) TMI 484
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....(iv) The other abbreviations used in this order for the sake of convenience, clarity and brevity are as follows : (a) Assessing Officer is referred to as 'AO' ; (b) Commissioner of Income-tax (Appeals)-6, Chennai is referred to as 'CIT(A)'; (c) Income Tax Appellate Tribunal 'B' Bench, Chennai is referred to as 'ITAT'. 3(v) Assessee is engaged inter-alia in the business of design, fabrication and supply of cement equipment. Assessee has filed its return of fringe income for the said assessment year on 31.10.2002 declaring a total income of Rs. 3,10,70,066.00. The assessment was completed under Section 143(3) of the IT Act, determining the income of Assessee as Rs. 9,22,42,335.00. Subsequently, the assessment was revised under Section 154 of the IT Act, determining the income as Rs. 9,26,68,392.00. Thereafter, on 31.12.2008, a revision was made giving effect to an order dated 22.06.2007 made by the ITAT, wherein and whereby the income of the Assessee was determined at Rs. 9,16,60,121.00. 3(vi) When the matter stood as above, reassessment proceedings were initiated by issuance of a notice under Section 148 of the IT Act on 23.3.2009 and reassessmen....
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.... that there was a mere inadvertent human error on the part of the Chartered Accountant (who according to the Assessee was different from the Chartered Accountant who issued certificates in earlier years) while issuing the certificate under Section 80HHB of the IT Act and as such, the AO has not examined the aforesaid facts. 4(vi) So contending, Assessee advanced it's case that the perspective of AO while proceeding to levy penalty under Section 271(1)(c) of the IT Act is erroneous. 4(vii) Per contra, the primary contention of Revenue, both before the ITAT and before us is that the Assessee has furnished inaccurate particulars and therefore, is liable to be mulcted with penalty under Section 271(1)(c) of the IT Act. 4(viii) We noticed that this is the fulcrum and sheet anchor of the case of Revenue. 4(ix) We have heard the learned counsel for the Revenue Mr.T.R.Senthil Kumar. We have also perused the orders of the authorities below, i.e., AO, CIT(A), besides perusing the order of ITAT, which is called in question before us. 4(x) What we gather from the orders of the two authorities below and ITAT is that Revenue does not have any incriminating material or evidence against A....
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.... reexamine the factual findings. We take it that the factual finding arrived at by the authority below, namely, CIT(A), as confirmed by ITAT are conclusive, as no perversity has been pointed out by revenue in arriving at such findings. 4(xviii) Having said this, it takes us to the proposed substantial questions of law, on which the Revenue wanted this TCA to be admitted. Questions, which according to the Revenue are substantial questions of law as proposed by the Revenue, in the instant TCA, read as follows : "1.Whether in the facts and in the circumstances of the case the Appellate Tribunal was correct in deleting the penalty levied u/s 271(1)(c) of the Act, relying on the Apex Court's decisions in the case of Price Waterhouse Private Ltd. (348 ITR 306) and Reliance Petro Products Pvt. Ltd. (322 ITR 158) when the case on hand is distinguishable on facts? 2.Whether the Appellate Tribunal was correct in holding that inadvertent error that the Chartered Accountant failed to note the ceiling in respect of amount credited by the assessee to foreign project reserve account while computing the deduction under section 80HHB of the Act by itself would not attract penalty u/s 271(1)(....
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....re, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law. (ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law. (iii) The general rule is that High Court will not interfere with the concurrent findi....
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....aju [AIR 1951 Mad 969 : (1951) 2 MLJ 222 (FB)] : (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR p. 557) "When a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal with that question at some length and discuss alternative views, then the question would be a substantial question of law. On the other hand if the question was practically covered by the decision of the highest court or if the general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular fact of the case it would not be a substantial question of law." This Court laid down the following test as proper test, for determining whether a question of law raised in the case is substantial: (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR pp. 557-58) "The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an ....
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....Coopers Private Ltd. Vs. CIT reported in (2012) 348 ITR 306 (SC) and also CIT Vs. Reliance Petroproducts Pvt. Ltd. reported in 322 ITR 158 (SC). Therefore, we have no hesitation whatsoever in holding that the proposed questions of law are definitely not substantial questions of law. Owing to all that we have set out herein, in our considered view, we do not find any other substantial question of law arising in this case. 4(xxv) We are of the view that they may not even qualify as pure questions of law as they are all turning heavily on facts. 4(xxvi) We have held elsewhere in this judgment that the factual findings returned by the CIT(A) and ITAT are held to be conclusive as we are sitting in Section 260A of the IT Act and as no perversity has been pleaded or projected qua such factual findings. 5 CONCLUSION : 5(i) Owing to all that have been stated supra, we have no hesitation whatsoever in holding that no substantial questions of law arises in the instant TCA and the same deserves to be dismissed. 5(ii) We have also concluded that the assessee is not guilty of deliberate furnishing of inaccurate particulars / concealment of income and is not liable to be mulcted with penalty....
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....e purpose of Section 271(1)(c), to be deemed to represent his income in respect of which particulars have been concealed, only if the assessee fails to offer an explanation or offers an explanation which is found by the Assessing Authority to be false or if the assessee offers an explanation which he is unable to substantiate and fails to prove that the explanation was bona fide and that facts material to the computation of his total income had been disclosed by him. 5. Under Section 271(1)(c) of the 1961 Act, the imposition of penalty is not automatic whenever there is less income returned. The pre-condition for imposition of penalty is subjective satisfaction of the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or the Commissioner, as the case may be, that the assessee has concealed particulars of his income or furnished inaccurate particulars of such income. The furnishing of inaccurate particulars would have to be deliberate. 6. In view of Explanation I, referred to above, there is no requirement on the part of the Revenue to establish mens rea for the purpose of imposition of penalty. Mere satisfaction of concealment and/or furnishing of inacc....
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....d ultimately, the concealed income was treated as additional income. In the background of the aforesaid facts, penalty was imposed. The Supreme Court rejected the contention that the onus lay on the Assessing Officer to establish mens rea. In effect and substance, the Supreme Court held that on receipt of a notice, it was for the Assessee to explain, that concealment was not deliberate. 11. After the insertion of the Explanation, it cannot be said that the onus lies on the Revenue to establish mens rea for concealment of income before imposition of penalty. If there was failure to return the correct income, there would be a presumption of concealment, unless the Assessee was able to prove that his failure to return his correct income was not due to fraud or neglect. 12. In the instant case, the learned Tribunal arrived at the factual finding that there was no concealment, but a bona fide error made by the Chartered Accountant. The Assessing Officer also did not record any finding that the explanation of bona fide error of the Chartered Accountant was incorrect. 13. In M.A.K.Data P. Ltd. v. Commissioner of Income Tax, reported in (2013) 358 ITR 0593 (SC), the Supreme Court held t....
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....sors, reported in (2008) 13 SCC 369, the Supreme Court observed as under: "17. It is of significance to note that the conceptual and contextual difference between Section 271(1)(c) and Section 276-C of the IT Act was lost sight of in Dilip N. Shroff v. CIT, (2007) 6 SCC 329. 18. The Explanations appended to Section 271(1)(c) of the IT Act entirely indicates the element of strict liability on the Assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilip N. Shroff case has not considered the effect and relevance of Section 276-C of the IT Act. Object behind enactment of Section 271(1)(c) read with Explanations indicate that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276-C of the IT Act." 19. The proposition of law enunciated in Dharamendra Textile Processors (supra) is unexceptionable. However, as observed above, there was no concealment in this case and in any case, when the Appellate Tribunal, the fact find....