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TMI Blog2018 (8) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... and material to the computation of his income have been disclosed by him. If the assessee has disclosed all facts and material in computation of his income, it cannot be said that he has furnished inaccurate particulars of his income. In the present case, it is clear that the assessee has disclosed particulars of the loss in sale of assets which was not in dispute. Instead of treating that loss as capital loss the assessee had treated the same as business loss. Thus, the assessee cannot as such be said to have not disclosed all the material to the computation of his income. - This was a wrong belief of the assessee that loss in sale of assets could be treated as business loss and not the capital loss. Levy of penalty deleted as there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly applied the decision of CIT Vs. Zoom Communication (P) Ltd. 327 ITR 510 (Del.) ignoring the decision of CIT Vs. Siddharth Enterprises 322 ITR 80. (iv)Whether the I.T.A.T. Rightly confirmed the penalty under Section 271(1)(c) of the Act when the Assessee filed return of income declaring loss and the assessment was made at Nil income by the Assessing Authority by order dated 27.03.2007 under Section 154 of the Act. 3. The assessee filed return of its income on 29.10.2004 declaring a loss of ₹ 1,04,25,550/-. Return was processed under Section 143(1) of the Act and the case was taken up in scrutiny. The Assessing Officer (hereinafter referred to as 'the AO') noted that the assessee had inter alia debited an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee passed the order of penalty under Section 271(1)(c) of the Act on 30.03.2009. The AO rejected the contention of the assessee and held that the penalty under Section 271(1)(c) of the Act could be levied even if the return income was a loss. The AO was of the view that the assessee had intention to conceal particulars of its income and, therefore, penalty under Section 271(1)(c) of the Act was imposable. The AO levied 100% penalty of tax amounting to ₹ 37,40,165/-. 7. Aggrieved by the aforesaid penalty order, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal and upheld the order passed by the AO. 8. The assessee filed second appeal before the Tribunal against the order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as under Section 271(1)(c) of the Act, the penalty proceedings can be initiated when the assessee has concealed the particulars of income. When the income itself has been assessed to be Nil, there was no question of any concealment of income and, therefore, the initiation of penalty proceedings as well as the penalty order are bad in law. 12. Learned counsel for the assessee has placed reliance on the judgment of the Supreme Court in the case of Commissioner of Income-tax, Ahmedabad vs. Reliance Petroproducts (P.) Ltd.: [2010] 189 Taxman 322(SC) to buttress his submission that merely because the assessee had claimed expenditure, which was not accepted or was not acceptable, that, by itself, would not attract penalty under Section 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishing inaccurate particulars of income'. The Supreme Court has held that in order to attract the penalty under Section 271(1)(c) of the Act, mens rea was necessary inasmuch as the word 'inaccurate' signifies a deliberate act or omission on behalf of the assessee. Further, the jurisdiction under Section 271(1)(c) of the Act is a discretionary jurisdiction vested upon the assessing authority and the amount of penalty could not be less than the amount sought to be evaded by reason of such concealment of particulars of income but it could exceed three times thereof. 'Inaccurate particulars' is not defined anywhere in the Act. In order to attract the provision of Section 271(1)(c) of the Act, the assessee must be found to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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