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TMI Blog1992 (4) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... re is nothing in section 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provision. - Civil Appeal No. 2626-2628 of 197 - - - Dated:- 28-4-1992 - S. MOHAN. and G. N. RAY. JUDGMENT P.H. Parekh and Sunil Dogre, Advocates, for the respondent. J. Ramamurthy, Senior Advocate (Ranbir Chandra, P. Parameswaran and Ms, A. Subhashini, Advocates, with him), for the appellant. The judgment of the court was delivered by MOHAN J.- All the three appeals can be dealt with under a common judgment since the assessment years are different while the assessee, the respondent, is one and the same. The three assessment years in question are 1964-65, 1965-66 and 1966-67. For the year 1964-65, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Division Bench of the Gujarat High Court. However, the matter was referred to the Full Bench because the Division Bench found itself unable to agree with the view taken by the earlier Division Bench ruling reported in [1975] 36 STC 347 (Morvi Cotton Merchants' Industrial Corporation Ltd. v. State of Gujarat) and in Special Civil Application No. 1059 of 1972, decided by the same Bench on July 18, 1974. In these cases, the Division Bench took the view that in provisions similar to section 271(1)(a) of the Income-tax Act, 1961, under the Sales Tax Act, where also the words "without reasonable cause" have been set out in the section providing for penalty, the burden is on the Revenue to prove the absence of "reasonable cause". Thus, the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee cannot help the Department in establishing its case against the assessee at the time of imposition of penalty. In view of the above discussion and in view of our conclusion, we answer the question as reframed by us as follows : 'Reasonable cause is an ingredient of the offence for which the penalty is provided and the taxing authority has prima facie to prove absence of reasonable cause in the sense that has been explained above.' The matter will now go before the Division Bench for disposal of the case in accordance with law." Thereafter, the matter came before the Division Bench which held that the view expressed by the Tribunal that the assessee had shown "reasonable cause" is not erroneous on the facts and in the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income under section 271(1)(c), then the question of mens rea may come in. Unfortunately, in the judgment under appeal, this distinction has not been borne in mind which led to the non-application of the ratio of the Full Bench of the Kerala High Court reported in [1976] 103 ITR 149 [FB] (CIT v. Gujarat Travancore Agency). It was this aspect of the matter which came to be clarified in [1989] 177 ITR 455 (SC) (Gujarat Travancore Agency v. CIT) which has subsequently been applied in [1992] 193 ITR 713 (SC) (CIT v. Kalyan Das Rastogi). Thus, it is submitted that the Revenue is entitled to succeed. In opposition to this, learned counsel for the assessee drew our attention to the passages occurring in the impugned judgment wherein the requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to furnish the return of total income, and to section 276C which provides that if a person wilfully fails to furnish in due time the return of income required under section 139(1), he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine. It is clear that in the former case what is intended is a civil obligation while in the latter what is imposed is a criminal sentence. There can be no dispute that having regard to the provisions of section 276C which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of cri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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