TaxTMI 
TaxTMI 
2021 (12) TMI 205
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....axman 65 (SC)?" 2) The brief facts leading to the present appeal are as follow; 2.1 The return of income for the assessment year 2011-12 was filed by the respondent. The assessee had claimed the carry forward of current year losses and current year unabsorbed depreciation. The return was processed under Section 143(1) of the Income-Tax Act, 1961 ( "the Act" for short). It was also selected for scrutiny and a notice under Section 143(2) of the Act was issued. 3) The Assessing Officer had noticed that assessee had claimed the additional depreciation amounting to Rs. 18,47,95,000/- under Section 32(1)(iia) of Act. On examination of the eligibility, it was noticed that the assessee, during the year under consideration, had commenced the production and prior to the said year, he was not engaged in the business of manufacturing. After analyzing Section 32(1) (iia) of the Act, the Assessing Officer held them not eligible for the additional depreciation, and accordingly, the claim of additional amount of Rs. 18,47,95,000/- (rounded off into) had not been sustained. 4) The penalty was levied under Section 271(1)(c) for a sum of Rs. 6,13,84,278/- and this was initiated for furnishing i....
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....tional depreciation of Rs. 18,47,95,000/- for plant and machinery under Section 32(1)(iia) of the Act, which has been disallowed by them on the ground that the production has been started in the current year by the respondent, and therefore, it cannot be said to have been already engaged in the business of manufacturing. This was construed as furnishing the inaccurate particulars and hence, the Assessing Officer had started the penalty proceedings. It would be to refer to Section 271(1)(c) of the Act at this stage. Section 271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or furnished inaccurate particulars of such income." 9) We may direct that the person shall pay by way of penalty, as provided under this clause. 10) We could notice that the CIT Appeals and ITAT have considered the disallowance of the claim of depreciation on the part of the authority to hold that the same is not a ground to hold that it is a concealment of income. While so holding, it noticed that the respondent had made a claim of depreciation on t....
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.... clean and simple and in order to expose the assessee to the penalty, unless the case is strictly covered by the Proviso, the penalty provision cannot be invoked and by no stage of imagination the incorrect claim in law can tantamount to furnishing of inaccurate particulars. "7. As against this, Learned Counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the Act. It was pointed out that there was no concealment or any inaccurate particulars regarding the income were submitted in the Return. Section 271(1)(c) is as under:- "271(1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or furnished inaccurate particulars of such income." A glance at this provision would suggest that in order to be covered, there has to be concealment of ....
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....ould 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. In Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai & Anr. [2007(6) SCC 329], this Court explained the terms "concealment of income" and "furnishing inaccurate particulars". The Court went on to hold therein that in order to attract the penalty under Section 271(1)(c), mens rea was necessary, as according to the Court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause (iii) of Section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was fur....