TaxTMI 
TaxTMI 
2025 (3) TMI 1005
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....e Revenue has raised the following substantial questions of law for consideration: "(i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in deleting the penalty of Rs. 4, 61, 771/- u/s. 271 (1) (c) imposed by the A.O. on the addition of unexplained cash credit u/s. 68 to the tune of Rs. 14, 94, 407/- on sale of shares of penny stock M/s. Sulabha Engineering Ltd. falsely claimed by the assessee as Long-Term Capital Gains exempt u/s. 10 (38) of the IT Act, 1961 ? ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in holding that stricter proof of culpability is missing in this case when the AO had clearly established in the assessment order that the asses....
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....rt by judgment dated 8th July, 2022 in a batch of cases namely, PCIT vs. Swati Bajaj and Others, 2022 SCC Online Cal. 1572. The present proceedings arise out of penalty proceedings initiated under Section 271 (1) (c) of the Act to the tune of Rs. 4, 61, 771/-. Learned Tribunal in the impugned order noted that the addition made by the Assessing Officer on the ground of bogus claim of long term capital gain was affirmed by this court, observed that the penalty proceedings being a different proceeding than the matter concerning quantum addition during the assessment proceedings, the penal provisions of levy of penalty under Section 271 (1) (c), the stricture yardstick of culpability is required to be established. After making such an observati....
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.... conclusion by placing reliance on the decision of the Hon'ble Supreme Court in Union of India & Ors. vs. Dharamendra Textile Processors & Others, (2008) 13 SCC 369. The question which falls for consideration before the larger Bench in a batch of appeals was, whether Section 11-AC of the Central Excise Act, 1944 with the intention of imposing mandatory penalty on the persons who evaded payment of tax should be read to condone mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed medium. The assessee in the said case referred to Section 271 (1) (c) of the Income Tax Act and took a stand that Section 11-AC of the Central Excise Act is identical and in a given case it was open to the Assessin....
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....culpability has to be established does not lay down the correct legal principle. In other words, the Tribunal cannot hold that wilful concealment/culpability is required to be established, which is not required to be done as the same is a civil liability as explained in Dharamendra Textile Processors [supra]. 8. Therefore, we are inclined to set aside that portion of the order passed by the learned Tribunal while interpreting the provisions of section 271 (1) (c) of the Act as it is not in consonance with the decision of the Hon'ble Supreme Court in Dharamendra Textile Processors. 9. As rightly pointed out by the learned senior standing counsel for the revenue, various provisions of the Act which fall in Chapter XXII of the Income Tax Act....