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TMI Blog2019 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out in his reply that the mistake was caused on account of the Accountant. Even considering the fact, the assessee has such a large turnover it would be difficult even to assume that the assessee would attempt to conceal or avoid payment of tax on interest income as 27,832/-. Also the explanation given by the assessee has not been found to be false nor has the explanation be disputed. As relying on RELIANCE PETROPRODUCTS PVT. LTD.[2010 (3) TMI 80 - SUPREME COURT] and ASHOK PAI VERSUS COMMISSIONER OF INCOME-TAX [2007 (5) TMI 199 - SUPREME COURT] it cannot be said that there is concealment of income or furnishing of inaccurate particulars of income, which can give cause for levy of penalty u/s.271(1)(c) - decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... only a clerical mistake and the same has now been offered and tax paid thereon. The ld.A.R also placed before us a copy of reply given by the assessee in respect of penalty notice which is shown at pages 104 to 105 & 106- 107 of paper book, which reads as follows:- "V.K.C. JAVAMOHAN, 81/40w Kutchecy Road, Myapore, Chennal - 600 004. April 15, 2015 The Asst. Commissioner of Income Tax, Non-Corporate Circle I, Chennai. Respected Sir, Ref: My own/PAN No.ADA PJ 2642 Q A.Y, 2012-13. Sub: Reply to Notice u/s 274 read with sec 271 (c) Of the Income tax Act 1961-Reg. With reference to the above I wish to submit the following for your consideration. I have not willfully concealed the particulars of Income. Or furnished inaccurate particulars of Income etc., for the above said Assessment Year. I believed that my accountant has done the accounting works properly. Due to her (i.e accounts) ill health she has finished the accounting work during the closing date to fiie the return and my auditors have also verified the accounts at the last time and certain errors were not been noticed by them also. I have started the Flat Construction business during the period. Due to Ine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pacucity of time.. I have started the Flat Construction business during the period. Due to Inexperience of my accountant she has not brought the working progress in the profit and loss account. She has debited all the expenditure and credited the Sales made during the year to the profit and loss account and that is the reason for the low profit. As soon as the department noticed the low profit I voluntary accepted my error (i.e. not considered the working progress) and revise the Statement of Total Income by incorporating the working progress etc and accepted to pay the necessary taxes including interest whichever is applicable. The other disallowance is provisions of payments to contracts without TDS etc., In his regard I wish to say that the provisions were made during the month of March and the actual payments were made subsequent financial year and at the time of payments made the necessary TDS were made I have honestly admitted the mistake and accepted the addition with the view to aim the expenditure in the subsequent assessment year. The last disallowance is the Bank Interest ₹ 27,832/- by oversight this was omitted by rne. Hence I wish to bring to you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the Assessing Officer must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his * [2009] 317 ITR 1 (SC). ** [2008]306 ITR 277(SC). *** [2010] 1 GSTR 66 (SC). **** [2007] 291 ITR 519 (SC). income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT* was upset. In Union of India v. Dharamendra Textile Processors**, after quoting from section 271 extensively and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,441/-, which is the claim of expenditure incurred, but it has been moved to work in progress and it has been allowed as expenditure in the immediately succeeding year. The genuineness of the expenses have not been questioned nor disputed. The second issue is in regard to current liabilities in the balance sheet in respect of which the TDS has not been deducted, but TDS deducted in the succeeding year and the payment has been done. Therefore, we cannot say 'concealment of income on this TDS. In respect of addition of ₹ 27,832/-, it is noticed that the assessee has shown it in its capital account and the assessee has also categorically pointed out in his reply that the mistake was caused on account of the Accountant. Even considering the fact, the assessee has such a large turnover it would be difficult even to assume that the assessee would attempt to conceal or avoid payment of tax on interest income as ₹ 27,832/-. Also the explanation given by the assessee has not been found to be false nor has the explanation be disputed. This being so, in view of the principles laid down in the decisions of the Hon'ble Supreme Court in the cases of Ashok Pai (T) Vs. CIT (2007) 292 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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