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TMI Blog2015 (2) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998, though not crucial, the appellate authorities have placed much reliance on subsequent events than the categorical declaration in return of income on February 6, 1998. The criterion is not the contents of the letter dated February 23, 1998, nor the revised return filed in response to the scrutiny notice. The criterion in this case is categorical declaration made by the assessee at the time of submission of returns. The categorical statement with reference to the above reasoning clearly indicates there is concealment of income from the HUF, i.e., knowingly the assessee furnished inaccurate particulars of income for computation of tax. - Decided in favour of the Revenue - I. T. A. No 306 of 2009 - - - Dated:- 17-1-2014 - DR. MANJULA CHELLUR AND A. M. SHAFFIQUE, JJ. For the Appellant : P. K. R. Menon, Senior Counsel, GOI (Taxes), and Jose Joseph, Standing Counsel for Income-tax For the Respondent : P. Balakrishnan JUDGEMENT Dr. Manjula Chellur C. J.- In this appeal, the following substantial questions of law arise for consideration : 1. Whether, on the facts and in the circumstances of the case and in the light of the facts found an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the taxable income, did not accept the explanation given by the assessee. He proceeded to impose penalty under section 271(1)(c) of the Income-tax Act. Aggrieved by the same, the assessee approached the Commissioner of Income-tax (Appeals). By referring to section 271(1)(c) of the Act and also the declaration made in the initial returns filed on February 6, 1998 and the particulars given in the letter dated February 23, 1998, the Commissioner of Income-tax (Appeals) opined that the contents of the letter amply prove that the assessee had voluntarily requested the Assessing Officer to include income of the HUF in his hands and there was justification for not furnishing the revised return as there was prevention, therefore, there was no justification on the part of the Assessing Officer in imposing penalty. Accordingly, penalty imposed under section 271(1)(c) of the Income-tax Act came to be cancelled. 4. Aggrieved by the same, the Revenue approached the Tribunal contending that there was no justification in the order of the appellate authority in interfering with the order of imposition of penalty levied by the Assessing Officer. The Tribunal though made discussion with referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. In that context, they referred to the Income-tax Act and also excise duty. With reference to section 271(1)(c) of the Income-tax Act, their Lordships opined, the Explanations appended to section 271(1)(c) indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return of income. The object behind the enactment of section 271(1)(c) of the Income-tax Act read with the Explanations indicate that the said section has been enacted to provide a remedy for loss of revenue. The penalty under that provision is a civil liability. Therefore, willful concealment is not an essential ingredient to attract civil liability but it is a matter of prosecution under section 276C of the Act. Their Lordships also referred to several judgments on the issue and ultimately opined that casus omissus ought not to be created by interpretation, save in some case of strong necessity. Therefore, in the absence of the words wilful or mens rea , there was no justification to read in between the lines with reference to the abovesaid two words. Therefore, according to the learned standing counsel for the Revenue, the Department need not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vised return that is crucial on the question, but the omission or wrong statement with what intention has to be seen. In other words, if the concealment is on account of honest and bona fide reasons, it could be considered and not otherwise. In the light of such observation of the apex court and also the earlier Division Bench of this court, what is required to be seen is what exactly was the declaration made by the respondent-assessee at the time of filing his return of income on February 6, 1998. Filing of a revised return in response to scrutiny notice is also an admitted fact in the present case. 8. Both the appellate authorities have placed much reliance on letter dated February 23, 1998, in concluding that the imposition of penalty is arbitrary, erroneous and not justifiable. Paragraph 2 of the proceedings of the Deputy Commissioner of Income-tax is relevant, which reads as under : 2. A scrutiny of the statement submitted for this year, with reference to the previous years records revealed that the assessee has not disclosed the under mentioned items of income for the current year. 1. Salary income from Lachmandas and Sons amounting to ₹ 50,000 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 4,55,000 was not at all disclosed though a categorical statement to that effect was included. In the light of the observations of the apex court and also this court with reference to men rea or intention, while declaring the income by the assessee with reference to each case based on the facts and circumstances, court or authorities concerned have to determine whether there is an honest and bona fide declaration on the part of the assessee at the time of filing the returns. 10. Though we are not required to enquire into mens rea or wilful intention on the part of the assessee, we cannot close our eyes to the categorical declarations made by the assessee at the time of filing the return. In the light of the categorical statement that the entire income from the HUF was included in the individual income of the assessee which apparently was far from truth, we only have to opine that there was no honest and bona fide disclosure made by the respondent at the time of filing the return of income. On the other hand, but for the scrutiny taken up by the Department, the additional income from the HUF would have gone unnoticed and it would have escaped from computation of tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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