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TMI Blog2007 (3) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... e themselves. Therefore, the assessees are quite aware that either wittingly or unwittingly, they cannot escape from the statutory duty of payment of tax on such income. Such a failure of duty on the part of the assessees, in our considered opinion, constitutes an element of concealment, warranting levy of penalty u/s 271(1)(c) of the Act, inasmuch as the assessees who had gained the benefit under the statute cannot be permitted to state that they had no intention to suppress such gain, nor that omission of such income in the returns was by oversight, as, both legally and logically it follows that they had a knowledge of the receipt of income from the respondent. But for the pointing out by the respondent as to the said additions, while passing the assessment order u/s 143(3) of the Act for the assessment year 1996-97, the said income as well as the tax liability would have remained unearthed. Therefore, under such circumstances, we see every justification for initiating the proceedings for penalty u/s 271(1)(c) of the Act and levying penalty, based on factual and concurrent finding by the authorities below. Accordingly, we have no hesitation to answer the question against the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l undisclosed income : (i) 244A interest received for the assessment year 1993-94 10,52,820 (ii) Unexplained credits in SB account 4,938 10,57,758 100% of tax sought to be evaded on Rs. 10,57,758 = 40% of Rs. 10,57,758 4,23,103 (ii) in T. C. No. 1006 of 2007 Total undisclosed income : (i) 244A interest received for the assessment year 1993-94 7,64,640 (ii) Unexplained credits in SB account 3,615 7,68,255 100% of tax sought to be evaded on Rs.7,68,255 = 40% of Rs.7,68,255 Rs. 3,07,302 4. On appeal by the assessees, before the Commissioner, the penalty levied was modified by order even dated May 15, 2000, in the respective case, confirming penalty with regard to the addition of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 156 is paid in excess of such demand. (2) If the proceedings resulting in the refund are delayed for rea sons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under sub-section (3) of section 143 or section 144 or section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount ; and such notice of demand shall be deemed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or offers an explanation which is found by the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. Explanation 2. Where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (iii) of this sub-section had been levied, that part of the amount so added or deducted in such earlier assessment year immediately preceding the year in which the receipt, deposit, outgoing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars have been furnished exceeds the total income assessed, means the tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income ; (b) in any case to which Explanation 3 applies, means the tax on the total income assessed ; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished. Explanation 5. Where in the course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income, (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but a strict liability where the question of proving beyond the shadow of doubt one's existence of bona fide belief that such duty or interest is not taxable does not arise. It goes without saying that any violation of the law or rules relating to economic offences, either relating to the payment of duty or tax as the case may be, the theory of mens rea is not attracted. In such matters, the rules of interpretation contemplate a strict interpretation rather than a liberal and wider interpretation. 12. The rule of mens rea has to be established beyond all reasonable doubt in criminal cases, but it is not so in the case of an economic offence. The classical view that no mens rea, no crime has long ago been eroded, especially regarding economic crimes. In economic offences, the notion that a penalty or a punishment cannot be cast in the form of an absolute or no fault liability but must be preceded by mens rea must be rejected. A rule of strict liability or absolute liability should be imposed without insisting mens rea to deal with such socio economic crimes, vide S. Bagavathy v. State of Tamil Nadu [2007] 1 LW 892. 13. Mens rea is not an essential ingredient for contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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