M/s Marigold Premises P. Ltd., Pune V. DCIT, Pune

ITA 1035/PUN/2012

• Counselvise Citation: 103524514 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-11-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 22-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: DHARMESH SHAHSHRI KULIN MEHTA
• Keywords: Question of law
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO . 1035 / P N/ 20 1 2 ASSESSMENT YEAR : 200 3 - 04 M/S. MARIGOLD PREMISES PVT. LTD. S . NO. 15, KALYANINAGAR, VADAGAONSHERI, PUNE VS. D CIT, CENTRAL CIRCLE - 2(3), PUNE (APPELLANT) (RESPONDENT) PAN NO. AABCM2608J APPELLANT BY: SHRI DHARMESH SHAH/SHRI KULIN MEHTA RESPONDENT BY: SHRI A.K. MODI ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) - CENTRAL, PUNE DATED 20 - 03 - 2012 FOR THE A.Y. 2003 - 04 IN WHICH THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) HAS BEEN CONFIRMED. THE ASSESSEE HAS TAKEN THE MUL TIPLE GROUNDS BUT THE ISSUE WHICH ARISES FOR OUR CONSIDERATION IS WHETHER THE LD. CIT(A) JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER TO THE EXTENT OF RS.26,56,333/ - U/S. 271(1)(C) OF THE ACT ? 2. THE FACTS WHICH ARE REVEALED FROM TH E RECORD AS UNDER. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT AND CONSTRUCTION. THE ASSESSEE HAS TWO DIVISIONS: A. INFOTECH PARK CALLED MARISOFT. B. OTHER RESIDENTIAL AND COMMERCIAL DEVELOPMENTS. IN THE A.Y. 2003 - 04 THE A SSESSEE CLAIMED THE DEDUCTION TO THE EXTENT OF RS. 72,28,116/ - U/S. 80IA (4) WHICH WAS SUBJECTED TO SCRUTINY . IN THE ASSESSMENT ORDER AS NOTED BY THE ASSESSING OFFICER , THE ASSESSEE HAS 2 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE MERELY FULFILLED THE TWO CONDITIONS OUT OF THE FOUR. THE ASSESSING OFF ICER ALSO REFERRED TO RULE 18C(4). THE ASSESSING OFFICER HAS OBSERVED IN THE ASSESSMENT ORDER THAT THE CBDT HAS NOT NOTIFIED THE INDUSTRIAL PARK DEVELOPED BY THE ASSESSEE TILL THE DATE OF ASSESSMENT. THE ASSESSEE FILED THE COPY OF THE NOTIFICATION NO. SO 354(E) DATED 01 - 04 - 2002 (FILE NO. 12(4)/2001 - IP&ID) ISSUED BY THE MINISTRY OF COMMERCE AND INDUSTRY. THE ASSESSEE EXPLAINED TO THE ASSESSING OFFICER THAT HE WAS UNDER BONAFI DE BELIEVE THAT THERE WAS AUTOMATIC APPROVAL. AS OBSERVED BY THE ASSESSING OFFIC ER THE ASSESSEE HAS COMPLETED ONLY SIX UNITS UP TO 31 - 03 - 2003 AND BY THE END OF THE MARCH, 2005 , THE ASSESSEE HAS CONSTRUCTED 108 UNITS. THE ASSESSING OFFICER ALSO NOTED THAT AS PER THE INFORMATION SUBMITTED IT WAS FOR OFFICE SPACE ONLY BUT THERE WAS NO M ENTIONED REGARDING THE UNITS. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE FIRST AND SECOND FLOOR WAS PURCHASED BY ONE SHRI DEEPAK KOTHARI WHO HAS GIVEN THE PREMISES ON RENT TO MSOURCE INDIA PVT. LTD. AND THE NATURE OF THE BUSINESS OF THE COMPANY IS C ALL CENTRE/BPO. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT IN THE F.Y. 2002 - 03, FIVE FLOORS WERE OCCUPIE D BY ONLY COMPANY I.E. MSOURCE INDIA PVT. LTD. I.E. MORE THAN 83% OF THE AREA WAS OCCUPIED BY ONE COMPANY. IN SUM AND SUBSTANCE THE ASSESSING OFFIC ER HELD THAT AS THE ASSESSEE HAS NOT FULFILLED THE CONDITION OF SEC. 80IA (4) R.W. RULE 18C HENCE, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION AND HE ACCORDINGLY, DISALLOWED THE ENTIRE DEDUCTION CLAIMED BY THE ASSESSEE AND MADE THE ADDITION TO THE EXTENT OF RS.72,28,116/ - . 3. ON THE SAID ADDITION THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) AND LEVIED THE PENALTY VIDE ORDER DATED 21 - 03 - 2009 OF THE INCOME - TAX ACT. IN THE PENALTY ORDER THE ASSESSING OFFICER HAS PRODUCED THE OBSERVATI ONS FROM THE ASSESSMENT ORDER. THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.26,56,333/ - BY HOLDING THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME AND FURNISHED 3 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE INACCURATE PARTICULARS OF INCOME. THE ASSESSEE CHALLENGED THE PENALTY ORDER B EFORE THE LD. CIT(A) BUT WITHOUT SUCCESSES. THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. THE REASON S AND FINDING S OF THE LD. CIT(A) ARE AS UNDER: 5.3. IN ITS SUBMISSIONS THE APPELLANT HAS CHALLENGED THE LEVY OF PENALTY U/S. 271( 1)(C) OF THE ACT AND HAS STATED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT JUSTIFIED. THE APPELLANT HAS FURTHER STATED THAT THE DISALLOWANCE OF THE DEDUCTION U/S. 80IA(4) WAS MADE BY THE AO AND CONFIRMED BY CIT(A) ONLY ON ACCOUNT OF LEGAL INT ERPRETATION IN RESPECT OF PROVISIONS OF 30 UNITS IN THE I.T. PARK AND ON ACCOUNT OF THE FACT THAT NOTIFICATION WAS NOT RECEIVED. IN RESPECT OF PROVISIONS OF 30 UNITS, THE APPELLANT HAS STATED THAT CONSIDERING THE LANGUAGE USED IN SECTION 80IA OF IT. ACT, T HE REQUIREMENT IS TO PROVIDE THE LOCATION OF 30 UNITS AND NOT TO CONSTRUCT THE 30 UNITS. THEREFORE, ONCE THE PLAN IS READY, SHOWING MORE THAN 30 UNITS AND THE SAME IS CONSIDERED BY MINISTRY OF COMMERCE AT THE TIME OF GRANTING THE APPROVAL, THE CONDITION CA N BE SAID TO HAVE BEEN COMPLIED WITH. IN RESPECT OF NON - RECEIPT OF NOTIFICATION, IT HAS BEEN STATED THAT THOUGH THE NOTIFICATION IS A REQUIREMENT FOR IT. PARK TO CLAIM DEDUCTION, IT IS NOT A PRE - CONDITION FOR CLAIMING THE DEDUCTION. THE APPELLANT HAS FURTH ER STATED THAT IT HAS SOUGHT THE APPROVAL OF MINISTRY OF COMMERCE WHICH WAS THE PRIME REQUIREMENT AND THEREFORE, IT SHOULD BE HELD ELIGIBLE FOR DEDUCTION. IT ALSO INFORMED THAT SUBSEQUENTLY IT RECEIVED NOTIFICATION DT.3/7/2007 IN RESPECT OF IT. PARK. SUCH A DISALLOWANCE ON ACCOUNT OF LEGAL INTERPRETATION OF 80IA OF I . T. ACT, THE APPELLANT HAS CONTENDED, IS UNJUSTIFIED AND NOT SUSTAINABLE. HOWEVER, THE ISSUE RELATING TO DISALLOWANCE OF DEDUCTION U/S. 80 IA (4) HAS ALREADY BEEN SETTLED BY HON'BLE ITAT IN ITS OR DER DT.27/7/2011. IN ITS ORDER, HON'BLE ITAT HAS HELD THAT ONLY SUCH PERSONS WHO HAVE FULFILLED THE CONDITIONS STIPULATED IN THE SCHEME ARE ELIGIBLE TO CLAIM DEDUCTION U/S.80IA OF IT. ACT. HON'BLE ITAT ALSO OBSERVED THAT THERE IS NO ROOM FOR LIBERAL CONSTR UCTION OF THE STATUTE. AS THE APPELLANT DID NOT FULFILL THE CONDITIONS LAID DOWN IN INDUSTRIAL PARK SCHEME, 2002, OF THE NOTIFICATION ISSUED BY THE MINISTRY AND BY THE CBDT AND THE CONDITIONS LAID DOWN IN RULE 18C OF IT. RULES, HON'BLE ITAT HELD THAT THE A PPELLANT WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/S.80IA OF IT. ACT. THEREFORE, HON'BLE ITAT DISMISSED THE APPEAL OF THE APPELLANT. THE ORDER OF ITAT WAS PRONOUNCED ON 27/7/2011, MUCH AFTER THE 4 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE ALLEGED DATE OF NOTIFICATION WHICH, ACCORDING TO THE APPELLANT, W AS 3/7/2007. THEREFORE, THERE IS NO AMBIGUITY ABOUT THE INELIGIBILITY OF THE APPELLANT FOR DEDUCTION U /S. 80IA(4)(III) OF THE I.T. ACT. 5.4. THE APPELLANT'S MAIN CONTENTION AGAINST IMPOSITION OF PENALTY U/S. 271(1)(C) OF I.T. ACT IS THAT IT HAD NOT CLAIME D EXCESSIVE DEDUCTION DELIBERATELY. THE APPELLANT HAS STATED THAT PENALTY PROCEEDINGS ARE QUASI - CRIMINAL IN NATURE AND, THEREFORE, THE AO MUST PROVE THAT THE APPELLANT HAS CONCEALED THE SAID INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME DELIBERATELY BY CLAIMING EXCESSIVE INCOME. APPELLANT HAS ALSO SUBMITTED THAT ALL THE PARTICULARS OF INCOME AND BASIS OF CLAIM OF THE INCOME WERE ON RECORD OF THE AO. IT HAS ALSO CONTENDED THAT THE ISSUE RELATING TO ALLOWABILITY OF DEDUCTION U/S. 80IA(4)(III) IS A DEBA TABLE ISSUE AS IT WAS DECIDED BY ITAT BY A MAJORITY DECISION. HOWEVER, THESE CONTENTIONS OF THE APPELLANT ARE NOT SUSTAINABLE IN VIEW OF THE RECENT DECISION OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA & OTHERS VS. DHARMENDRA TEXTILE PROCESSORS & OTHERS (2008) 306 ITR 277 WHEREIN IT HAS BEEN HELD THAT OBJECT BEHIND ENACTMENT OF SECTION 271(1)(C) READ WITH EXPLANATION IS TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE AND PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION U/S. 276C. IT HAS BEEN FURTHER HELD THAT 'MENS REA' IS NOT AN ESSENTIAL INGREDIENT OF SECTION 271(1)(C) AND THERE IS NO DISCRETION WITH THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY, TO LEVY PENALTY BELOW THE PRESCRIBED LIMIT. IN VIEW OF THIS DECISION OF HON'BLE SUPREME COURT, I AM OF THE CONSIDERED VIEW THAT THE AO WAS JUSTIFIED IN IMPOSING MINIMUM PENALTY U/S.271 (1)(C) OF IT. ACT IN THE CASE OF THE APPELLANT. 5.5 . IN ITS SUBMISSION THE APPELLANT HAS CITED MANY CASE LAWS. HOWEVER, A CAREFUL PERUSAL OF THESE CASE LAWS REVEALS THAT THEY ARE DISTINGUISHABLE ON FACTS. FOR EXAMPLE, IN THE CASE OF ITO VS. DEVIBAI H. PARMANI [84 ITD 342 (MUM)] IT HAS BEEN HELD THAT I T HAS TO BE PROVED THAT THE CLAIM OF THE APPELLANT IS INCORRECT. IN VIEW OF THE DECISION OF HON'BLE ITAT, PUNE, THERE IS NO DOUBT THAT THE CLAIM OF THE APPELLANT WAS INCORRECT. IN THE CASE OF CIT VS. KERALA SPINNERS LTD. (247 ITR 541) THE EXPLANATION OF TH E ASSESSEE WAS BONAFIDE. HOWEVER, IN THE CASE OF THE APPELLANT, THE CLAIM OF DEDUCTION U/S.80IA WAS MADE IN VIOLATION TO THE RELEVANT PROVISIONS. IN ITO VS. 5 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE STEEL INDUSTRIES OF INDIA [97 TAXMAN (MAG.)34], THE ASSESSEE FILED DOCUMENTS TO DEMONSTRATE BONAFID ES OF ITS CLAIM. NO SUCH DOCUMENTS WERE PRODUCED BY THE APPELLANT. IN FACT, THE APPELLANT WAS NOT IN POSSESSION OF THE REQUIRED DOCUMENTS AS IT DID NOT FULFILL THE REQUIRED CONDITIONS. IN THE CASE OF CIT VS. INDIAN METALS & FERRO ALLOYS LTD. (117 CTR 378), ITAT RECORDED A POSITIVE FINDING THAT THE CLAIM OF THE ASSESSEE WAS BONAFIDE. IN THE CASE OF THE APPELLANT, HON'BLE ITAT HAS REJECTED THE CLAIM OF DEDUCTION OF THE APPELLANT. LIKEWISE, OTHER CASE LAWS CITED BY THE APPELLANT ARE ALSO DISTINGUISHABLE. 5.6 . IN VIEW OF THE DISCUSSION IN THE PRECEDING PARAGRAPHS, GROUND OF APPEAL NO. 3 IS DISMISSED. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD. COUNSEL SUBMITS THAT SO FAR AS THE QUANTUM IS CONCER NED THERE WAS A DECENT IN THE DIVISIONAL BENCH BETWEEN THE TWO MEMBERS AND THE MATTER WAS REFERRED TO THE T HIRD MEMBER AND FINALLY AFTER INTERPRETING THE PROVISIONS OF SEC. 80IA(4) THE MATTER WAS DECIDED AGAINST THE ASSESSEE AND NOW THE MATTER IS PENDING B EFORE THE HON'BLE HIGH COURT. HE SUBMITS THAT THE APPEAL FILED BY THE ASSESSEE HAS ADMITTED BY THE HON'BLE HIGH COURT OF BOMBAY BY FRAMING THE SUBSTANTIAL QUESTION OF LAW. HE REFERRED TO THE COPY OF THE ORDER OF THE HON'BLE HIGH COURT DATED 26 - 03 - 2013 WH ICH IS PLACED AT PAGE NOS. 74 TO 75 OF THE COMPILATION . HE SUBMITS THAT IT IS PURELY INTERPRETATION OF THE PROVISIONS OF LAW WHETHER THE ASSESSEE IS ENTITLED FOR CLAIMING THE DEDUCTION EVEN IF ALL THE 30 UNITS HAVE NOT BEEN MADE FULLY OPERATIONAL. HE SUB MITS THAT EVEN IF THE HON'BLE T HIRD MEMBER HAS HELD THAT THE ASSESSEE IS NOT ENTITLED FOR CLAIMING THE DEDUCTION , THE FACT REMAINS THAT THERE WAS A DIVERSION OF THE OPINION BETWEEN THE HON'BLE MEMBERS OF THE DIVISIONAL BENCH AND ONE OPINION WAS TILL DATE I N FAVOUR OF THE ASSESSEE. MOREOVER, THE HON'BLE HIGH COURT HAS ALSO ADMITTED THE APPEAL OF THE ASSESSEE U/S. 260A OF THE INCOME - TAX ACT BY FRAMING THE SUBSTANTIAL QUESTION OF LAW. 6 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE HE SUBMITS THAT THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE C ASE OF GANESH HOUSING CORPORATION LTD. IS IN FAVOUR OF THE ASSESSEE WHICH IS ALSO ON THE INTERPRETATION OF THE PROVISIONS OF SEC. 80IA(4)(III). HE SUBMITS THAT THE DECISION IN THE CASE OF GANESH HOUSING CORPORATION LTD. VS. PADAM SINGH, UNDER SECRETARY AN D OTHERS 339 ITR 441 (GUJ.) WAS CHALLENGED BY THE REVENUE BY FILING THE SLP IN THE HON'BLE SUPREME COURT WHICH WAS S UMMARILY DISMISSED. HE REFERRED TO THE COPY OF THE ORDER PASSED BY THE HON'BLE SUPREME COURT DISMISSING THE SLP AT PAGE NO. 145 OF THE C OMP ILATION. HE ARGUES THA T IN THE A.Y. 2005 - 06 THE ASSESSEE HAS BEEN GRANTED THE DEDUCTION BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE HAS COMPLIED WITH ALL THE ELIGIBILITY CRITERIA. HE ARGUES THAT AS THE TWO VIEWS WERE POSSIBLE ON INTERPRETATION OF THE PROVISIONS OF LAW AND ACCORDING TO THE FAVORABLE INTERPRETATION IF THE ASSESSEE HAS CLAIMED THE DEDUCTION THEN BONAFIDE CANNOT BE DISPUTED. HE SUBMITS THAT THE CLAIM OF THE ASSESSEE IS WELL SUPPORTED BY THE SUBSEQUENT DECISION OF THE HON'BLE HIGH C OURT OF GUJARAT IN THE CASE OF GANESH HOUSING CORPORATION LTD. (SUPRA). HE PLACED HIS HEAVY RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC). II. CIT VS. DHARAMPAL PREMCHAND LTD. 329 ITR 572 (DELHI) III. C IT VS. HARSHVARDHAN CHEMICALS AND MINERAL LTD. 289 ITR 212 WE HAVE ALSO HEARD THE LD. DR, WHO SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. HE SUBMITS THAT THE ASSESSEE WAS WELL AWARE THAT HE HAS NOT COMPLIED WITH THE CONDITIONS OF SEC. 80IA(4)(III) AND HE COULD NOT HAVE CLAIMED THE DEDUCTION. HE PLEADED FOR CONFIRMING THE PENALTY. 5. THE FACTS ARE ALREADY NARRATED HERE - IN - ABOVE AS CAME OUT FROM THE ARGUMENTS AS WELL AS FROM THE RECORD . SO FAR AS THE QUANTUM IS CONCERNED THE APPEAL FILED BY THE ASSESSE E AGAIN THE MAJORITY DECISION 7 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE HAS BEEN ADMITTED BY THE HON'BLE HIGH AND THE HON'BLE HIGH COURT HAS FRAMED THE SUBSTANTIAL QUESTION OF LAW: (A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL ERRED IN DENYING THE DEDUCTION CLAIME D BY THE APPELLANT AMOUNTING TO RS.72,28,116/ - UNDER SECTION 80IA(4)(III) OF THE ACT IN RESPECT OF INCOME DERIVED BY IF FROM THE INDUSTRIAL PARK FOR ASSESSMENT YEAR 2003 - 04? (B) WHETHER IT IS OPEN TO THE TRIBUNAL TO RELY UPON RULE 18C OF THE RULES AND CER TAIN PROVISIONS FROM THE INDUSTRIAL PARKS SCHEME, 2002 AS LAYING DOWN THE CONDITION THAT THE CONSTRUCTION OF THE MINIMUM NO. OF UNITS SHOULD BE COMPLETED BEFORE DEDUCTION COULD BE CLAIMED UNDER SECTION 80 - IA(4)(III) OF THE ACT, WHEN NO SUCH CONDITION EXIST S IN THE SAID SECTION? (C) WHETHER THE NOTIFICATION BY THE CENTRAL BOARD OF DIRECT TAXES NOTIFYING THE APPELLANTS INDUSTRIAL PARK VIDE NOTIFICATION DATED JULY 03, 2007 RELATES BACK TO THE DATE ON WHICH THE APPELLANT FILED THE APPLICATION ON JANUARY 31, 2 003 OR IN THE LEAST FROM FEBRUARY 17, 2003 I.E. THE DATE ON WHICH THE PROJECT WAS APPROVED BY THE MINISTRY OF COMMERCE AND INDUSTRY IN THE GOVERNMENT OF INDIA? 6. AS THE ASSESSEE APPEAL IS ADMITTED AND SUBSTANTIAL QUESTION OF LAW HAVE BEEN FRAMED BY TH E HON'BLE HIGH COURT IT CERTAINLY SUGGEST THAT IT IS INTERPRETATION OF THE STATUTORY PROVISION AND NOT MERELY THE FACTUAL ASPECT. WE ALSO FIND THAT IN THE A.Y. 2005 - 06 ONWARDS THE ASSESSEE HAS BEEN GRANTED A DEDUCTION U/S. 80IA(4)(III) OF THE INCOME - TAX A CT HENCE, IT CANNOT BE AT LEAST SAID THAT THOUGH THE ASSESSEE WAS NOT AT ALL ELIGIBLE BUT HAS CLAIMED THE DEDUCTION. 8 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE 7 . IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) THE HON'BLE SUPREME COURT HAS HELD AS UNDER: 9. THEREFORE, IT IS OBVIOUS THAT I T MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULA RS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. [2007(6) SCC 329], THIS COURT EXPLAINED THE TERMS 'CONCEALMENT OF INCOME' AND 'FURNISHING INACCURATE PARTICULARS'. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(1)(C), MENS REA WAS NECESSARY, AS ACCORDING TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESS EE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD 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 ASSESSEE 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 IN COME 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 WA S ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. WAS UPSET. IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), AFTER QUOTING FROM SECTION 271 EXTENSI VELY AND ALSO CONSIDERING SECTION 271(1)(C), THE COURT CAME TO THE CONCLUSION THAT SINCE SECTION 271(1)(C) INDICATED THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF 9 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE SECTION 271(1)(C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THER EFORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276 - C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUM BAI & ANR. (CITED SUPRA) WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 276 - C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DIL IP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 271(1)(C) THAT THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED. 10. WE ARE NOT CONCE RNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS : NOT ACCURATE, NO T EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT'. 11. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN TH E DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURAT E PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH 10 ITA NO . 1035 /PN/201 2, M/S. MARIGOLD PREMISES PVT. LTD ., PUNE CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 8 . AFTER GIVING OUR ANXIOUS CONSIDERATION FACTS ON RECORD IN OUR OPINION THE ASSESSEES CASE IS SQUARELY COVERED BY THE PRINCIPL ES LAID DOWN BY THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) . MOREOVER, THE HON'BLE JURISDICTION HIGH COURT HAS ADMITTED THE APPEAL FILED BY THE ASSESSEE CHALLENGING THE DECISION OF THE ITAT, PUNE AND ALSO HAVE FRAMED THE SUBSTAN TIAL QUESTION S OF LAW HENCE, IT CANNOT BE SAID THAT NO LEGAL ISSUE IS INVOLVED MORE SO THE INTERPRETATION OF LAW. WE, THEREFORE, HOLD THAT NO MANDATE OF SEC. 271(1)(C) HAS BEEN FULFILLED ON FACTS OF THIS CASE FOR LEVYING THE PENALTY AND HENCE, THE PENALTY LEVIED BY THE ASSESSING OFFICER WAS NOT AT ALL JUSTIFIED. WE, ACCORDINGLY, CANCEL THE ENTIRE PENALTY AND ALLOW THE GROUNDS TAKEN BY THE ASSESSEE. 9 . IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 - 08 - 2014 SD/ - SD/ - ( G . S . PAN NU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 28 TH AUGUST, 2014 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - CENTRAL, PUNE 4 THE CIT - CENTRAL, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE