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TMI Blog2016 (8) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(1)(a) and in the assessment made under Section 143(3), additions were made under 14 heads and the total income was finally fixed at Rs. 23,93,510/-. The assessee carried the matter in appeal before the CIT (Appeals), who deleted six items of additions and, as a result, the total income got reduced to 13,32,000/-. Both sides filed appeals before the Tribunal, which restored two items of additions. Thus, the total income stood enhanced to Rs. 21,32,000/-. 4. Insofar as the assessment year 1994-1995 is concerned, the assessee filed its return declaring the total income of 21,39,850/-. The case was taken up for scrutiny and in the assessment made under Section 143(3), the total income was fixed at Rs. 68,32,870/-. In the appeal filed before the CIT (Appeals), deduction of Rs. 50,000/- out of the additions made was allowed. In the further appeal filed before the Tribunal, addition of Rs. 15,44,350/- was ordered to be deleted and the total income got reduced to Rs. 52,38,520/-. 5. Insofar as the assessment year 1995-1996 is concerned, the total income declared by the assessee was Rs. 12,31,670/- and after scrutiny and assessment, the total income was finally fixed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal in I.T.A.Nos.424 to 426/2005. By the impugned common order, the Tribunal held that in the facts and circumstances of the case, there was no justification to levy penalty in these cases. The reasoning of the Tribunal is reflected in paragraphs 7 and 8 of its order, which reads thus: 7. We heard the parties. There is no dispute that all the additions have been made in the normal course of assessments on the basis of details furnished by the assessee itself. The Assessing Officer has pointed out deficiencies regarding the evidences and materials to support various claims of expenditure by way of deductions made by the assessee. But for those lapses, the Assessing Officer has already disallowed the claims of the assessee and made corresponding additions but the question is whether those additions made by the assessing authority by way of disallowances of expenditure will automatically attract the provisions of section 271(1)(c) of the Act so as to hold that the assessee is liable for concealment of income or furnishing of in accurate particulars of income. 8. In these cases, the Profit and Loss Accounts have been prepared by the assessee on the basis of the regular books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person - (a) . . . . . . . . . . . . . . . (b) . . . . . . . . . . . . . . . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income (d) . . . . . . . . . . . . . . . he may direct that such person shall pay by way of penalty, -- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Explanation 1 - Where in respect of any facts material to the computation of the total income of any person under this Act, - (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner to be false, or (B) such person offers an explanation which is not able to substantiate and fails to prove that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court in its judgment in Commissioner of Income Tax v. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158(SC). In that judgment, after extracting the relevant part of Section 271(1)(c), the Apex Court has held that a glance at this provision would suggest that in order to be covered by this Section, there has to be concealment of particulars of income of the assessee or that the assessee must have furnished inaccurate particulars of his income. It was also held that the meaning of the word "particulars" used in the Section would embrace the details of the claim made. Thereafter, the Apex Court has proceeded to explain the provision thus: "We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and the requirement of "concealment of income" is that income has not been declared at all or is not even recorded in the books of accounts or in a particular case, the concealment of the particulars of income may be from the books of account as well as from the return furnished. In the judgment in New Sorathia Engineering Co. v. Commissioner of Income Tax [2006] 282 ITR 642 (Guj), the Gujarath High Court has taken the view that it was incumbent upon the Assessing Officer to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee and that in the absence of such positive finding, penalty levied under Section 271(1)(c) is liable to be struck down. 14. We may also mention that the Senior Counsel for the Revenue had relied on the Apex Court judgment in Commissioner of Income Tax v. Mssadilal Ram Bharose [1987] 165 ITR 22 where the Apex Court held that it is not the requirement of law that any and every explanation by the assessee must be accepted and that the explanation submitted by the assessee must be an acceptable explanation, acceptable to a fact-finding bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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