TaxTMI 
TaxTMI 
2020 (3) TMI 881
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....spect to the new power projects were wrongfully claimed as the revenue expenditure by the assessee. In such circumstances, the expenditure so claimed was disallowed in the quantum proceedings. It was held to be capital in nature. The assessment under Section 143(3) of the Act came to be framed determining the total income at Rs. 5,60,71,852/after disallowance of Rs. 4,75,07,667/on account of treating the said expenditure as capital expenditure. In the aforesaid context, the penalty proceedings under section 271(1)(c) of the Act came to be initiated against the assessee. The Assessing Officer levied penalty of Rs. 1,59,91,080/under Section 271(1)(c) on the premise that the assessee had furnished inaccurate particulars of income. 2.2 The assessee being dissatisfied with the order of penalty referred to above preferred an appeal before the CIT(A). The CIT(A) allowed the appeal preferred by the assessee substantially relying on the decision of the Supreme Court in the case of Commissioner of Income-tax, Ahmedabad Vs. Reliance Petro Products Private Limited : (2010) 322 ITR 158 (SC). 2.3 The Revenue being dissatisfied with the decision of the CIT(A) preferred appeal before the Appella....
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....has been established that 'mens rea' or deliberate attempt is not essential for levy of penalty, if it is established that assessee has furnished inaccurate particulars or concealment of particulars of income, penalty is levaible. The decisions relied upon by the assessee in its reply dtd.07/03/2012 have been gone through and it has been found that the ratio of the above decisions relied upon by the assessee company is as under: a. Wrong claim does not amount to concealment. b. There should be willful/deliberate attempt on part of the assessee to conceal income or to file inaccurate particulars of income. c. Penalty cannot be levied merely on the basis of addition. d. Penalty cannot be levied where addition has been made on basis of difference of opinion in interpretation of Law. In the present case, the issue is of filing of inaccurate particulars of income and not of concealment of particulars of income. It is pertinent to note here that Hon'ble Supreme Court in the case of Dharamendra Textiles Processors 306 ITR 277 (2008) (SC) has already laid down that penalty is a 'civil liability' thus mens rea is not essential. Thus, cases relied by assessee on....
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....uch expenses on the basis of audited accounts and tax audit report which has not brought out these expenditure as capital in nature. It is therefore the bonafide for the claim of such expenditure cannot be doubted or questioned. (ii) All the details & materials facts were either disclosed or submitted before A.O. as and when asked for. None of these expenses were found bogus or excessive. These genuine expenses were disallowed being held as capital in nature. This preposition cannot lead to satisfaction that appellant has furnished inaccurate particulars of income. (iii) There are two opinions on this issue. Even Hon'ble Gujarat High Court's latest order in the case of GNFC (Supra) as relied on is in favour of appellant. This reflects that issue is contentious in nature and debatable. In view of latest order of Hon'ble Gujarat High Court, the ratio is binding on lower appeal authorities. It is therefore despite Hon'ble ITAT considered the issue against appellant, the penalty is not exigible. (iv) Apart from ratio of Hon'ble Supreme Court order in the case of Reliance Petro Product Ltd. (Supra), there are plethora of judgment which directly dealt with the i....
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.... the CIT(A)." 7. Section 271(1)(c) reads thus: " 271. Failure to furnish returns, comply with notices, concealment of income etc: (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person- (a) [***] (b) has failed to comply with a notice under subsection (2) of section 115WD or under subsection (2) of section 115WE or under subsection (1) of section 142 or subsection (2) of section 143 or fails to comply with a direction issued under subsection (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or (d) has concealed the particulars of the fringe benefits or furnished inaccurate particulars of such fringe benefits, he may direct that such person shall pay by way of penalty,- (i) [***] (ii) in the cases referred to in clause (b), in addition to tax, if any, payable by him, a sum of ten thousand rupees for each such failure ; (iii) in the cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but whi....