TaxTMI 
TaxTMI 
2026 (3) TMI 712
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....ourse of assessment proceedings only and therefore, provisions of section 271(1)(c) are clearly attracted in this case?" (ii) "Whether, on the facts and circumstances of the case and in law, the Hon'ble ITAT is correct in not giving credence to the finding of AO that the loss of Rs. 16,55,35,272/- was not due to purchase and sale of shares but only by valuation/ book loss which was speculative in nature as what was disclosed in Return of Income by the assessee was only gross loss in the business & profession of trading in shares and specifically when the correct facts came to notice only during assessment proceedings?" (iii) "Whether, on the facts and circumstances of the case and in law, the Hon'ble ITAT order is perverse in upholding the order of the Ld. CIT(A) deleting the penalty levied u/s. 271(1)(c) of the I.T. Act, 1961 stating that there was disclosure of these losses without appreciating that the assessee in its Return of Income disclosed carried forward of loss of Rs. 16,55,35,840/- and stated Zero under the head Profits & Gains from Business other than Speculation Business as also in respect of Profits & Gains of Speculation Business and short term capi....
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....he 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 the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the Learned Counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the pre....
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....f 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 further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held 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. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff's case (supra) was upset. In Dharamendra Textile Processors' case (supra), after quoting from section 271 extensively and also considering section 271(1)(c), the Court came to the conclusion that since section 271(1)(c) indicated the element of....
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....hing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. 10. It was tried to be suggested that section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the deta....