TaxTMI 
TaxTMI 
2009 (8) TMI 44
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....sment proceedings and furnished the requisite details. During the assessment proceedings, it transpired that assessee worked with M/s DHL International(S) PTE Ltd., Singapore during the previous year and was paid salary in Singapore amounting to US$ 36,680.79 equivalent to Rs.17,81,952/-. The assessee explained that an amount of US $ 8199.87 (Rs.3,98,350/-) was deducted as tax from the aforesaid salary income and having paid tax on salary income earned in Singapore, he was of the view that the said income was not liable to be included in the total income in India. He however, offered salary income of Rs. 17,81,952/- to be included in his total income. The assessee was also found to have received an amount of Rs. 5,00,000/- from his erstwhile employer M/s Honeywell International (India) Pvt. Ltd. in the previous year. His explanation was that the said amount was exempted under Section 10(10 B) of the Act being retrenchment compensation. According to the Assessing Officer, that amount could not be exempted u/s 10 (10B) as the assessee was not a workman. The assessee also earned interest income of Rs. 22,812/- from Bank of India which was not included by him in the total income but he....
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....here tax- withholding had taken place and India had DTAA with Singapore, so he did not include this receipt in his salary income cannot be rejected out of hand. During assessment proceedings however, assessee offered this salary receipt for taxation as per IT Act, 1961. Therefore, an amount of Rs. 17,81,952/- was included in the total income of the assessee. In such setting of facts, I am afraid, the impugned addition may not lead to concealment of income or furnishing of inaccurate particulars thereof." 7. The Revenue challenged the order of CIT (Appeals) before the Income Tax Appellate Tribunal, Delhi (for short, "the Tribunal"). 8. The Tribunal heard the departmental representative and the authorized representative of the assessee and by its order dated December 22, 2006 upheld the order of CIT (Appeals). The Tribunal considered the matter thus: " 12. On a careful consideration of the rival submissions, we are of the view that the CIT (Appeals) was justified in canceling the penalty in respect of all the three items. So far as the salary received in Singapore from DHL is concerned, it is true that since the assessee was a resident of India, the salary received in Singap....
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....ormation leading to the additions was taken by the Assessing Officer only from the return filed by the assessee and that such information was not found to be false. Thus, there has been no failure on the part of the assessee to declare all the facts before the Assessing Officer. We are, therefore, in agreement with the view taken by the CIT (Appeals) that this is not a case where the assessee can be said to have concealed his income or furnished inaccurate particulars even within the meaning of Explanation 1 to Section 271(1)(c)." 9. The revenue filed appeal u/s 260A before the High Court of Delhi. The High Court considered the question whether the Assessing Officer had recorded a valid satisfaction for initiating penalty proceedings under Section 271(1)(c) of the Act. Inter alia, relying upon a decision of that Court in Commissioner of Income Tax vs. Ram Commercial Enterprises Ltd. and noticing that Ram Commercial Enterprises has been approved by this Court in Dilip N. Shroff vs. Joint Commissioner of Income Tax (2007) 291 ITR 519 (SC), and T. Ashok Pai vs. Commissioner of Income Tax (2007) 292 ITR 11 (SC), held that from the reading of the assessment order, it was not discerni....
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....that if that person fails to offer an explanation or the explanation offered by such person is found to be false or the explanation offered by him is not substantiated and he fails to prove that such explanation is bona fide and that all the facts relating the same and material to the computation of his total income has been disclosed by him, for the purposes of Section 271(1)(c), the amount added or disallowed in computing the total income is deemed to represent the concealed income. The penalty spoken of in Section 271(1)(c) is neither criminal nor quasi criminal but a civil liability; albeit a strict liability. Such liability being civil in nature, mens rea is not essential. 12. In the case of Union of India and Ors. vs. Dharamendra Textile Processors and Ors (2008) 306 ITR 277, a three judge Bench of this Court held that Dilip N. Shroff did not lay down correct law as the difference between Section 271(1)(c) and Section 276(c) of the Act was lost sight of. The Court held that the explanation appended to Section 271(1)(c) indicates element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The Court held thus: "Th....
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....er of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. The assess on the other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the `IT Act') taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the `Rules') and a decision of this court in Chairman, SEBI vs. Shriram Mutual Fund & Anr. {2006 (5) SCC 361) and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11 AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench" After referring to a number of decisions on interpretation and construction of statutory interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and h....