2020 (9) TMI 92

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....(for short, the Act) is directed against the order dated 26.9.2008 passed by the Income Tax Appellate Tribunal, Chennai 'B' Bench (for brevity, the Tribunal) in I.T.A.No.1875/Mds/2007 for the assessment year 2003-2004. 3. The appeal has been admitted on 14.7.2009 on the following substantial question of law : "?Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty under Section 271(1)(c) of the Act on the rejection of claim of sundry creditors which were offered for taxation in the course of the assessment proceedings by the Appellant even though the presumption on the concealment of Income or furnishing of inaccurate particulars of Income as per explanation 1 was rebutted in the proceedings?....

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.... sustaining the levy of penalty under Section 271(1)(c) of the Act on the rejection of claim of sundry creditors which were offered for taxation in the course of the assessment proceedings by the appellant even though the presumption on the concealment of income or furnishing of inaccurate particulars of income as per Explanation 1 was rebutted in the proceedings? ii. Whether the Appellate Tribunal is correct in law in sustaining the action of the respondent in imposing penalty under Section 271(1)(c) of the Act even though the application of the deeming provisions in Section 41(1) of the Act would not come within the ambit of the said penal provisions especially the explanation offered was bona fide and not rejected as malafide ? ....

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.... 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 276C of the Income Tax Act and held that any concealment come within the purview of Section 271(1)(c) would automatically render the assessee for penalty under Section 271(1)(c) of the Act. 7. On the facts, we have concluded that the assessee's attitude before the officer is inconsistent and even the inconsistent stand could not be established with the supportive evidence or materials. In the light of the decision of the Apex Court in the case of Union of India Vs. Dharmendra Textiles Processors [306 ITR 277], we are of the view that penalt....