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TMI Blog2016 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... s with regard to confirm the levy of penalty under section 271(1)(c) of the Act. 3. The brief facts of the case are that the assessee is engaged in the business of manufacture/trading of flavor essences, aromatic components, aromatic chemicals and food colour preparations and filed its return of income for the assessment year 2006-07 on 30.11.2006 admitting income of Rs. 64,47,82,010. Subsequently, assessment was completed u/s 143(3) on 13.11.2009 by making the following disallowances (i) disallowance of gratuity paid Rs. 1 ,22,23,077 (ii) disallowance of excess depreciation on UPS Rs. 45,950 (iii) disallowance u/s 28(iv) Rs. 1 ,39,50,000 Total disallowance Rs. 2,62,19,027 The AO levied penalty based only on the addition made towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon'ble Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd v. CIT(1 68 ITR 705) and decision of the Chennal Tribunal in the case of Southern Gas Fittings (P) Ltd v. DCIT (80 lTD 202) (iii) The mistake has happened since the senior manager in-charge of accounts has resigned and a new manager took over during the previous year relevant to this assessment year Therefore, the claim made by the appellant is neither willful nor intentional. The inadvertent claim of gratuity was due to change in the appellant's accounting department and mistake by the new manager which is not wilfil or deliberate. (iv) The ld.A.R relied on the decision of Punjab & Haryana High Court in the case of CIT Vs. Sidartha Enterprises re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above, the action of the AC in initiating and levying penalty is in order. The ld.D.R further pleaded that let us verify the initiaion and levying of penalty from another angle. Whether there is a deliberate I willful intention or mens rea is there to gain from the double claim? As per the decision of the Hon'ble Supreme Court in the case of UQI v. Dharmendra Textile Processors (2008) 306 ITR 277, mens rea is not required. If there is a wrong claim in the return of income by which there is a benefit to the appellant it is sufficient to attract penalty u/s 271(1)(c). The. Apex court has held in delivering judgment in this case that the penalty leviable in loss of revenue is a civil liability for which the willful concealment is not an esse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c). The other decisions relied on by the AO also proves his stand point. Further, the ld.D.R argued that the decisions relied on by the Id.AR are quite distinguishable. In the case of CIT v. Durr India P Ltd delivered by Madras High Court (supra), the court while holding that mens rea is not essential, the claim of the appellant should be bonafide. In the instant case except saying that the erstwhile senior manager has resigned, the ld.AR has not furnished any details to show how their financial activities have got paralyzed in the absence of erstwhile senior manager and left several unanswered questions as mentioned above. The decision of Hon'ble Supreme Court in the case of Price-Water-house Copers P Ltd (supra) is also disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in this case claimed the above expenditure in the P&L A/c and once again claimed it as allowable expenditure in the statement of income which leads to double claim of the same expenditure. During the assessment proceedings, the assessee was questioned by the AO, it was stated that inadvertently the claim was made on the basis of which the penalty was levied by the AO and confirmed by the CIT(A). The explanation given by the assessee for claiming the same expenditure for two times is very cryptic and too general in nature. There is no cogent and reliable evidence shown by the assessee how such claim has been made by the assessee. There is no base for such claim. Being so, in our opinion such an unadmissible claim could not have been cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent error and in that circumstance, the penalty order was set aside. Hence, the said decision is of no assistance to the assessee. Further, the assessee has strongly relied on the judgement of Supreme Court in the case of CIT v. Reliance Petroproducts Ltd, (supra). In that case, their lordships were only concerned with the question whether in this case, as a matter of fact, the assessee has given inaccurate particulars or not. The Lordships noted in this case there is no finding in details supplied by the assessee in its return were found to be incorrect or erroneous or false and added that such not being the case, there would be no question of inviting the penalty u/s.271(c) of the Act and that a mere making of the claim, which is not sust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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