TaxTMI 
TaxTMI 
2019 (3) TMI 142
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndum of appeal for decision by this Court:- "i. Whether on the facts and the circumstances of the ITAT was correct to confirm the penalty of Rs. 21,17,500/- under Section 271(1)(c) of the Act for A.Y. 2007-08? ii. Whether the ITAT right in law holding that the appellant made incorrect claim which tantamount to furnishing inaccurate particulars of income so as to attract the penalty under section 271(1) (c) of Act applying the decision of CIT vs. Zoom Communication Pvt. Ltd. (2010) 327 ITR 510 (Del) contrary to decision of CIT vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158 (SC) and CIT vs. Rubber Udyog Vikas Pvt. Ltd. (2011) 335 ITR 588? iii. Whether the ITAT while confirming the penalty rightly did not consider that while preparing the income tax return in not adding income tax paid amount to Rs. 12,24,000/- and statutory provisions amounting to Rs. 52,24,042/- made as required under U.P. Cooperative Samiti Limited, where not added back in advertently being intentional bonafide and clerical mistake due to the ignorance of insertion of sub section (4) of section 80P of the Act by Finance Act, 2006? iv. Whether the appellant bank having claim the amounts of Rs. 12,2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir profit was calculated as per the provisions of the Cooperative Societies Act and their bye-laws after taking into account necessary reserves/provisions and denied that they had concealed the particulars of their income or furnished inaccurate particulars of the same. However, the Deputy Commissioner of Income Tax-VI, Kanpur vide his order dated 28th of May, 2010 held that the assessee-appellant had concealed its income by filing inaccurate particulars and, therefore, the case was covered by Section 272(1)(c) of the Act and directed the assessee to pay a penalty of Rs. 21,70,500/-. The order dated 28th of May, 2010 was challenged by the assessee before the Commissioner of Income Tax (Appeals) II, Kanpur who vide order dated 23.12.2011 rejected the challenge and confirmed the order passed by the Assessing Officer. Subsequently, the assessee filed Second Appeal No. I.T.A. No. 114 before the Income Tax Appellate Tribunal which was also dismissed by the Tribunal vide its judgment and order dated 06.09.2012. Before the CIT(A) as well as the Tribunal, the assessee had pleaded that in the assessment year previous to 2007-08, the income of the assessee was exempted under Section 80-P of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of penalty under Section 271(1)(c) of the Act was made out against the assessee. In support of his submission, the counsel for the assessee has relied on Commissioner of Income Tax, Ahmedabad vs. Reliance Petroproducts Private Limited 2010 (11) SCC 762 and Dilip N. Shroff vs. Joint Commissioner of Income Tax, Mumbai & Another 2007 (6) SCC 329. Rebutting the arguments of the counsel for the assessee, the counsel for the revenue argued that the penalty levied on the appellant was for a statutory offence and the concealment made by the assessee came to light only when its details were divulged by the assessee-appellant on being specifically inquired into by the A.O. It was argued that the assessee was a bank and is adequately assisted by a qualified staff. The counsel for the revenue argued that it was a clear case of an intentional claim of the impugned expenses and thus of concealment of particulars of income and it was not a case of bona fide mistake on the part of the assessee in supplying the particulars of its income. It was argued by the counsel for the revenue that the assessee had not been able to successfully discharge its burden that it was not a case for levy of penalty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that Section 271(1)(c) of the Act had been enacted to provide a remedy for loss of revenue and the penalty under the said provision was a civil liability. The Supreme Court further held that willful concealment was not an essential ingredient for attracting civil liability as was the case in matter of prosecutions under Section 276-C of the Act. In Dharamendra Textile (supra), the Supreme Court held that the Dilip N. Shroff's case had not been correctly decided. Subsequently, in Reliance Petroproducts (supra), the Supreme Court held that Dharamendra Textile (supra) had overruled Dilip N. Shroff only to the extent that Dilip N. Shroff held that mens rea on the part of the assessee was an essential ingredient for imposing penalty under Section 271(1)(c) of the Act but the Supreme Court in Dharamendra Textile (supra) found no fault with the reasoning in Dilip N. Shroff (supra) regarding the meaning of the terms 'conceal' and 'inaccurate'. It is relevant to notice that in Reliance Petroproducts (supra), the assessee had neither concealed its income or furnished inaccurate particulars of its income in the return and all the details given in the return filed by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (emphasis added) A reading of the judgment of the Supreme Court in Reliance Petroproducts (supra) shows that the particulars furnished in the return filed by the assessee would be relevant to decide whether the assessee could be subjected to penalty under Section 271(1)(c) of the Act and if the particulars furnished in the return are found to be inaccurate the liability to pay penalty under Section 271(1)(c) would arise. The relevant observations of the Supreme Court in Paragraph no. 12 of the aforesaid judgment are reproduced below: "12. Therefore, it is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise." (emphasis added) The dispute in the present case shall be considered in light of the law laid down by the Supreme Court in its aforesaid judgments. It is an admitted case of the assessee that Rs. 12.24 lacs and Rs. 52.24 lacs which were shown in the profit and los....