2022 (8) TMI 452

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....c) of the Income Tax Act, 1961 ["Act" in short]. 2. The assessee, a Co-operative Bank has filed its return of income for the assessment year 2008-09 on 30.09.2008 admitting an income of Rs..2,48,81,820/-. The return was processed under section 143(1) of the Act. Notice under section 148 of the Act was issued on 12.10.2011 and served on the assessee on 13.10.2011 after recording the following reason: "It is seen from tile computation statement that tile total income was arrived at after allowing deduction u/s 36(l)(viia) @ 7.5% to tile tune of Rs.20,17,446/-. The assessee- Bank is a Co-Operative Society having employees as its members. It does not have rural branches and hence the advances fall in the nature of urban advances. So the prov....

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.... v. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) and prayed for deleting the penalty levied under section 271(1)(c) of the Act. 4. On the other hand, the ld. DR strongly supported the orders of authorities below. 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including the case law relied upon by the assessee. In the assessment order, the Assessing Officer has observed that the claim of deduction of Rs..20,17,446/- under section 36(1)(viia) of the Act is not in accordance with the provisions of the Act and not found to be correct. Accordingly, the claim of deduction was disallowed and brought to tax, which was confirmed by the ld. CIT(A). In the penal....

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....alty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By referring to the decisions in the case of Dilip N.Shroff vs. Joint CIT reported in [2007] 291 ITR 519 (SC), and in the case of Union of India vs. Dharmendra Textiles Processors reported in [2008] 306 ITR 277 (SC), the Hon'ble Supreme Court pointed out that the explanation must be preceded by a finding as to how and in what manner the assessee had furnished the particulars of his income and to impose penalty, element of mens rea was essential. Explaining the term "conceal" and "inaccurate", the said decision overruled the decision in the case of Dilip N.Shroff vs. Joint CIT, (supra), as regards the mens rea to be an essential ingredien....