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TMI Blog2010 (8) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... lty. 4. The learned AR submitted that the assessee has filed revised return saying that the said capital gain is under section 94(7) of the Act. The learned AR referred page 2 of Assessing Officer's order and submitted that the assessee has furnished complete details of the transactions and on the basis of the details the Assessing Officer calculated 'short-term capital gains' after taking into consideration of provisions of section 94(7) of the Act. The learned AR further submitted that the assessee was old and aged more than 75 years. He further submitted that the assessee has filed return on the advice of technical person J.D. Mehta & Co., C.A., in support of which the learned AR referred page 9 where a copy of receipt of payment of professional fee has been placed on record. The learned AR submitted that the Assessing Officer did not point out any specific particulars, which were inaccurate or concealed particulars of income. It is also the submission of the learned AR that if there are two views on one issue, which is favourable to the assessee to be taken into consideration. The learned AR further submitted that section 94(7) is basically is in respect of equity linked secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of 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 accurate 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271(1)(c). 11. There cannot be a straight jacket formula for detection of these defaults of concealment or of furnishing inaccurate particulars of income and indeed concealment of particulars of income and in accurate particulars of income may at times overlap. It depends upon the facts of the each case. In the assessment proceedings the Assessing Officer while ascertaining the total income chargeable to tax would be in a position to detect the specific or definite particulars of income concealed or of which false particulars are furnished. Where in the constituents of income returned, such specific or definite particulars of income are detected as concealed, then even in the total income figure to that extent they reflect, it would amount to concealment to that extent. In the same way where specific and definite particulars of income are detected as inaccurate, then such figure will also make the total income inaccurate in particulars to the extent it does not include such income. In other words the Assessing Officer cannot invoke provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on the Assessing Officer as to whether he can invoke the Explanation or not. Explanation 1 comes into operation when, in respect of any facts material to the computation of total income of any person, there is failure to offer an explanation or an explanation is offered which is found to be false by the Assessing Officer or the first appellate authority, or an explanation is offered which is not substantiated. In such a case, the amount added or disallowed in computing the total income is deemed to represent the income in respect of which particulars have been concealed. As per the provision of Explanation 1, the onus to establish that the explanation offered was bona fide and all facts relating to the same and material to the computation of his income have been disclosed by him will be on the person charged with concealment. 14. The issue relating to "bona fide" and "false" returns in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9(2) of the Central Sales Tax Act, 1956 have been examined by the Apex Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the assessee does not include a particular item in the taxable turnover under a bona fide belief that he is not liable so to include it, it would not be right to condemn the return as a "false" return inviting imposition of penalty. The court held that if the view canvassed on behalf of the revenue were accepted, the result would be that even if the assessee raises a bona fide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the Court to be not acceptable. That surely could never have been intended by the Legislature. Under the circumstance of the case the Court was of the view that the assessee could not be said to have filed "false" returns when it did not include the amount of freight in the taxable turnover shown in the returns and the Assistant Commissioner was not justified in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax Act, 1958, and section 9(2) of the Central Sales Tax Act, 1956. 15. From the above di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration we find that the assessee has furnished full detail and has not concealed any particulars of income or has furnished any inaccurate particular of income. Further, we noticed that that there were no such specific requirements in the return form applicable to the year under consideration. Such requirement of the column in the return has been inserted by amendment in return form, ITR-6, at page 17, "Schedule CG capital gain" SNo. 3 (d) which is applicable from assessment year 2007-08. In the case of Reliance Petroproducts (P.) Ltd. (supra) the Hon'ble Supreme Court held that where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The case of the assessee under consideration is squarely covered by the above judgment of the Apex Court. The assessee demonstrated that their claim was bona f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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