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TMI Blog2021 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,51,285/- u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter called 'the Act'). 2.0 The brief facts of the case are that during the course of assessment proceedings u/s 143(3) of the Act, the Assessing Officer (AO) noted that the assessee had claimed a deduction of Rs. 4,69,52,670/- against provision for bad debts and doubtful debts u/s 36(1)(viia) of the Act while it had made provision for only Rs. 60,00,000/- for the year under consideration. The AO, vide assessment order dated 22.02.2013, held that no such deduction could be allowed without making provision for bad & doubtful debts in the account books of the previous year in which it was claimed, and, thereafter, quoting the case of State Bank of Patiala vs. CIT 272 ITR 54 (P&H), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l debts (without fulfilling the conditions) and claimed as deduction, such deduction knowing that it was incorrect which amounted to concealment. The AO also did not agree with the assessee's submission that it had acted on wrong advice and that there was negligence on the part of the authorized representative, on the ground that inaccurate particulars were supplied in the return which resulted in the reduction of income and, thus, concealment of income was proved. Accordingly, he imposed a penalty of Rs. 1,26,51,285/- being the minimum penalty. The Ld CIT (A) has, vide the impugned order upheld the penalty. 2.2 The assessee is now before this Tribunal and has raised following grounds of appeal. "1. That having regard to the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the AO has held that the assessee had furnished inaccurate particulars. It was submitted that the penalty ought to be deleted in view of the defect in the notice as aforesaid. The Ld. AR placed his reliance on numerous judicial precedents in support of his contention that the defect in notice would make the imposition of penalty unsustainable in law. 4.0 Per contra, the Ld. Sr. DR placed extensive reliance on the observations and findings of both the Lower Authorities. It was also pointed out that the ground relating to the defect in notice was not raised before the Ld CIT (A) and, therefore, the assessee should not be permitted to raise this ground at this juncture. It was argued by the Ld. Sr. DR that the penalty should not be delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Ever if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation 1(A) & (B) it should be discernib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found to be bonafide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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