TaxTMI 
TaxTMI 
2026 (9) TMI 1627
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....ion 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment year 2014-15. 2. The grounds of appeal raised by the Assessee before us in the memorandum of appeal in Form No. 36 read as under: "1. The Ld. CIT(A) has erred on facts and in law in confirming the levy of penalty of Rs. 35,950/- u/s 271(1)(c) of IT Act, 1961. 2. The appellant craves to alter, amend and modify any ground of appeal. 3. Necessary cost to be awarded to the assessee." 3. Briefly stated, the facts of the case are that the assessee, an individual, is the proprietor of M/s Grasim Mineral and a partner in M/s Goyal Mineral and M/s United Mineral. For the year under consideration, he filed his original ....
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.... out at Rs. 9,13,891/- ... Against this he has incurred expenditure on salary and royalty of Rs. 3,07,500/- ... and the outstanding debtor of Rs. 3,04,821/- totaling to Rs. 7,39,363/- leaving a balance of Rs. 1,74,528/-. ... Thus what is projected by him is that from the working of this Mine he has not earned anything rather because of non-realization of debtors he has suffered loss." 5. The AO computed the addition upon the very figures so furnished. His operative finding, in paragraph 5 of the assessment order, reads as under: "The assessee has received amount of Rs. 913891/- and incurred expenses of Rs. 7,39,363/- as noted on this paper. Accordingly, the assessee has concealed the income of Rs. 1,74,528/- and the same is here....
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.... the assessment proceedings, that the explanation of the assessee had never been found to be false, and that the addition had been accepted only to buy peace. 9. The learned Departmental Representative (hereinafter referred to as "the learned DR") supported the orders of the authorities below and submitted that the explanation of the assessee was neither substantiated nor shown to be bona fide. 10. We have heard the rival contentions and perused the material available on record. The assessee did not challenge the assessment order and the addition of Rs 1,74,528 has attained finality. We express no view upon it. The only question before us is whether the penalty levied under section 271(1)(c) of the Act can be sustained. 11. Section....
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....rticulars, and the conclusion in paragraph 7 returns to concealment. The assessee was thus never told, and has never been held guilty of, any one specific identified default. 13. The AO rested his conclusion on Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 (SC), for the proposition that the levy of penalty is a civil liability and that wilful concealment is not an essential ingredient. The proposition is correct and we respectfully follow it. Dharamendra Textile Processors (supra) dispensed with the requirement of proof of mens rea. It did not render the levy of penalty automatic upon the making of an addition, and it did not relieve the AO of the obligation to find that the conditions of section 271(1)(c) of the Ac....