M/s. HINDALCO INDUSTRIES LTD, MUMBAI V. ACIT CIR 6(3), MUMBAI

ITA 1833/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0879 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 06-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K PAHWA MR KESHAVE SAXENA
• Assessee Lawyers: S E DASTURP R TOPRANI
• Keywords: Business income; Wrong claim; TDS
• Section: 271(1)(c); 80IA; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI SHRI A.L. GEHLOT, A.M. & SHRI V. DURGA RAO, J.M. ITA NO. 1833/M/2009 ASSESSMENT YEAR: 2004-05 HINDALCO INDUSTRIES LTD., APPELLANT CENTURY BHAWAN DR. ANNIE BESANT ROAD, WORLI, MUMBAI 400 025 (PAN AAACH1201R) VS. ASSTT. COMMISSIONER OF INCOME-TAX RESPONDENT RANGE 6(3), ROOM NO. 522, 5 TH FLOOR, AAYAKAR BHAWAN, 101, M.K. ROAD, MUMBAI 400 020. APPELLANT BY : MR. S.E. DASTUR/P.R. TOPRANI RESPONDENT BY : MR. S.K. PAHWA/ MR. KESHAVE SAXENA ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-XX, MUMBAI, PASSED ON 23.12.2008 FOR TH E ASSESSMENT YEAR 2004-05 WHEREIN THE ASSESSEE HAS RAISED THE FO LLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDIN G LEVY OF PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF ALLEG ED WRONG CLAIM OF DEDUCTION UNDER SECTION 80 HHC INASMUCH AS THE SAME WAS MADE IN THE FOLLOWING MANNER: A) WHILE MAKING THE INCREASE IN TERMS OF THE PROVIS O TO SUB- SECTION 80 HHC THE TOTAL TURNOVER OF EXPORT BUSINES S WAS ONLY CONSIDERED AND NOT THE TOTAL TURNOVER OF BUSINESS O F THE APPELLANT. B) WHILE CALCULATING DEDUCTION UNDER SECTION 80 HHC RELIEF AVAILABLE U/S 80-IA WAS NOT REDUCED. 2. THE CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDIN G LEVY OF PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF THE ALLEGED WRONG CLAIM OF SHORT TERM CAPITAL LOSS OF RS. 33,80,390/- ON SALE OF SECURITIES IN TERMS OF THE PROVISIONS OF SECTION 94 (7) OF THE ACT. 3. THE CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDIN G LEVY OF PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF THE A LLEGED WRONG ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 2 CLAIM OF DEDUCTION OF RS. 5,90,000/- UNDER SECTION 80-GGB OF THE ACT. 5. WHILE UPHOLDING LEVY OF PENALTY UNDER SECTION 27 1(1)(C) IN RESPECT OF THE ALLEGED WRONG CLAIM OF DEDUCTION UND ER SECTION 80 HHC INASMUCH AS THE SAME WAS MADE IN THE FOLLOWI NG MANNER:- A) WHILE MAKING THE INCREASE IN TERMS OF THE PROVIS O TO SUB- SECTION 80 HHC THE TOTAL TURNOVER OF EXPORT BUSINES S WAS ONLY CONSIDERED AND NOT THE TOTAL TURNOVER OF BUSINESS O F THE APPELLANT. B) WHILE CALCULATING DEDUCTION UNDER SECTION 80 HHC RELIEF AVAILABLE U/S 80IA WAS NOT REDUCED.. 2. THE AO MADE VARIOUS ADDITIONS/DISALLOWANCES IN T HE ASSESSMENT ORDER. THEREAFTER PENALTY PROCEEDINGS U/ S 271(1)(C) WERE INITIATED AND LEVIED PENALTY AGAINST THE FOLLO WING ITEMS:- I) IN RESPECT OF ALLEGED WRONG CLAIM OF DEDUCTION U /S 80 HHC. II) DEPRECATION CLAIM RS 7,69,392/- TOWARD LEASE HO LD LAND. III) INTEREST OF RS 10,539/- ON ACCOUNT OF LATE PAY MENT OF TDS IV)IN RESPECT OF ALLEGED WRONG CLAIM OF SHORT TERM CAPITAL LOSS OF RS. 33,80,390/- ON SALE OF SECURITIES IN TE RMS OF THE PROVISIONS OF SECTION 94(7) OF THE ACT. V) IN RESPECT OF THE ALLEGED WRONG CLAIM OF DEDUCT ION OF RS. 5,90,000/- U/S 80GGB OF THE ACT. VI) PROFESSIONAL FEE RS 2,25,000/- THE CIT (A) CANCELLED THE PENALTY IN RESPECT OF ITE MS NUMBER II),III) AND VI) STATED ABOVE. 3. THE MATTER RELATING TO GROUND 1) (A) CALCULATION OF DEDUCTION U/S 80 HHC HAS BEEN REMITTED BACK TO THE AO BY THE ITAT IN ITA NO. 3209/M/06 FOR AY 2004-05 VIDE ITS ORDER DATED 1 8/02/2009. THE GROUND 1) (B) DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT. THE AO WAS OF THE VIEW THAT CLAIMING DEDUCTION IN E XCESS OF WHAT IS ELIGIBLE CERTAINLY A PART OF FURNISHING INACCURATE PARTICULARS OF INCOME, THUS, THE AO HELD THAT THIS ISSUE ATTRACTS THE PENALTY U/S 271(1)(C) OF THE ACT AND LEVIED PENALTY. ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 3 4. AS REGARDS THE SHORT TERM CAPITAL LOSS OF RS. 33 ,80,390/- ON SALE OF SECURITIES U/S 94(7), THE AO HELD THAT SECT ION 94(7) IS BASICALLY INTRODUCED IN THE ACT WITH THE INTENTION TO CURB THE PRACTICE OF INVESTING FEW DAYS BEFORE THE DATE OF D IVIDEND AND MAKING AN EXIT AFTER RECEIVING THE DIVIDEND AND IN TERM RECEIVING THE INTEREST FREE INCOME IN FORM OF DIVIDEND ALONG WITH THE LOSS ARISING DUE TO REDUCTION IN THE SALE PRICE AFTER TH E DIVIDEND DECLARATION, WHICH IS PROPERLY CALLED DIVIDEND STR IPPING. ASSESSEES ACT CONTRARY TO THE CLEAR CUT PROVISIONS OF THE LAW AS WELL AS AGAINST THE SPIRIT OF THE LAW AND ASSESSEE NOWHERE DISCLOSED THIS FACT IN ITS COMPUTATION OF INCOME THAT IT HAS NOT ADDED THE LOSS DISALLOWABLE U/S 94(7) ON THE BASIS OF ANY BONA-FID E REASONS. BEFORE THE ITAT, THE ASSESSEE DID NOT PRESS THIS GR OUND OF APPEAL. THE AO WAS OF THE VIEW THAT THE ASSESSEE NOT ONLY F URNISHED INACCURATE PARTICULARS OF INCOME BUT HAS ALSO CONCE ALED THE FACTS REGARDING THE INCOME. THUS, HE LEVIED PENALTY AGAIN ST THIS ISSUE U/S 271(1)(C) OF THE ACT. 5. AS REGARDS DEDUCTION OF RS. 5,90,000/- U/S 80GGB CLAIMED BY THE ASSESSEE, THE AO OBSERVED THAT THIS CLAIM IS CLEARLY CONTRARY TO THE PROVISIONS OF THE LAW AS THE ASSESSEE HAS DO NATED THE SUM TO GENERAL ELECTORAL TRUST AND NOT TO ANY POLITICAL PA RTY WHILE SECTION 80GGB CLEARLY SAYS THAT AMOUNT HAS TO BE PAID TO PO LITICAL PARTY FOR CLAIMING DEDUCTION. THUS, ASSESSEES CLAIM IS C LEAR CONTRARY TO THE PROVISIONS OF THE ACT AND REGARDING WHICH ASSES SEE HAS NOT MADE ANY DISCLOSURE IN ITS COMPUTATION OF INCOME TH AT IT HAS CLAIMED DEDUCTION U/S 80 GGB WITHOUT PAYING THE SAM E TO ANY POLITICALLY PARTY. THE ITAT VIDE ORDER DATED 10.02. 2009, IN ITA NO. 3209/M/06 FOR AY 2004-05 HAS REMITTED THIS ISSUE BA CK TO THE FILE OF THE AO WITH CERTAIN DIRECTIONS. THE AO LEVIED PE NALTY U/S 271(1)(C). 6. THE CIT (A) CONFIRMED THE PENALTIES LEVIED BY TH E AO ON THE ABOVE THREE ISSUES. IN RESPECT OF ALLEGED WRONG CLAIM OF DEDUCTION U/S 80 HHC. IN RESPECT OF ALLEGED WRONG CLAIM OF SH ORT TERM CAPITAL LOSS OF RS. 33,80,390/- ON SALE OF SECURITIES IN TE RMS OF THE ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 4 PROVISIONS OF SECTION 94(7) OF THE ACT, AND IN RESP ECT OF THE ALLEGED WRONG CLAIM OF DEDUCTION OF RS. 5,90,000/- U/S 80GG B OF THE ACT. 7. THE LEARNED AR SUBMITTED THAT EFFECTIVELY THER E ARE THREE ITEMS ON WHICH PENALTY UNDER SECTION 271(1)(C) HAS BEEN CONFIRMED BY THE CIT(A) AND THE ASSESSEE AGITATED IN THE GROUNDS OF APPEAL. THESE ARE PENALTY U/S 271(1)(C) LEVIED IN RESPECT O F CALCULATION OF DEDUCTION U/S 80 HHC, SHORT TERM CAPITAL LOSS U/S 9 4(7) AND DEDUCTION U/S 80 GGB. THE LEARNED AR FIRST TOOK THE GROUND OF APPEAL RELATED TO SHORT TERM CAPITAL LOSS. THE LEAR NED AR SUBMITTED THAT THOUGH IN QUANTUM APPEAL BEFORE ITAT, THE RELA TED GROUND HAS NOT BEEN PRESSED BY THE ASSESSEE AS NOTED BY THE I TAT IN PARA 21 OF THE ORDER, ITA NO. 3209/M/06 DATED 18.02.2009. T HE LEARNED AR SUBMITTED THAT MATTER CAN BE AGITATED IN PENALTY PR OCEEDINGS. THE LEARNED AR IN SUPPORT OF HIS CONTENTION RELIED UPON A JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE OF PRASANNA ENTERP RISES VS. CIT, 244 ITR 188 (KAR.). THE LEARNED AR FURTHER SUBMITTE D THAT SECTION 94(7) IS BASICALLY IS IN RESPECT OF EQUITY LINKED S ECURITY TRANSACTIONS AND NOT FOR OTHER SECURITIES TRANSACTI ON. THE LEARNED AR WHILE REFERRING THE JUDGMENT OF JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. WALFORT SHARE & STOCK BROKES (P.) L TD. 310 ITR 421 (BOM.) AND CBDT CIRCULAR 252 ITR ST. 65 AND PAGE 4 38 OF ITR 310, THE LEARNED AR SUBMITTED THAT THE TRANSACTIONS CARR IED OUT BY THE ASSESSEE WERE NOT EQUITY LINKED. THE TRANSACTIONS W ERE NOT CARRIED OUT WITH AN INTENTION OF DIVIDEND STRIPPING. THE LE ARNED AR DEMONSTRATED HIS CONTENTION FROM STATEMENT OF DETAI LS OF SHORT/LONG TERM PROFIT/LOSS ON SALE OF INVESTMENT. THE TRANSACTIONS ARE OF WEEKLY DIVIDEND & REIMBURSEMENT NOT LINKED T O EQUITY. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS TAKEN ON E POSSIBLE VIEW AT THE TIME OF FILING THE RETURN OF INCOME. TH E LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE HAS DISCLOSED F ULL PARTICULARS. HE REFERRED THE RELEVANT PORTION OF RETURN OF INCOM E OF WHICH PHOTO COPY HAS FURNISHED IN THE PAPER BOOK. ACCORDING TO SCHEDULE C- CAPITAL GAIN PAGE 6 OF THE INCOME TAX RETURN FORM T HE ASSESSEE IN COLUMN A STATE REGARDING DETAIL OF CAPITAL GAIN/LOS S WHERE IT IS WRITTEN PLEASE REFER ANNEXURE II GIVING COMPLETE D ETAILS THE COPIES ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 5 OF THOSE DETAILS HAVE BEEN FILED WHICH ARE PLACED ON THE RECORD. THE LEARNED AR FURTHER SUBMITTED THAT THERE WERE NO SPECIFIC REQUIREMENT IN THE RETURN FORM AS REQUIRED IN AMEND ED RETURN FORM ITR-6, PAGE 17, SCHEDULE CG CAPITAL GAIN SNO3 (D) WHICH IS APPLICABLE FROM AY 2007-08. THE LEARNED AR WHILE SU MMING UP HIS ARGUMENT SUBMITTED THAT AFTER FULL DISCLOSURE OF FA CTS THE ASSESSEE MADE CLAIM UNDER THOSE CIRCUMSTANCES IT IS NOT A CA SE OF CONCEALMENT OF PARTICULARS OF INCOME OR INACCURATE PARTICULARS OF INCOME. THE LEARNED AR IN SUPPORT OF HIS CONTENTION S RELIED UPON FOLLOWING DECISIONS:- 1. RELIANCE PETROPRODUCTS PVT.LTD. (322 ITR 158) (SC), 2. JHAVAR PROPERTIES (P.) LTD. V. ACIT, 28 ITR 26 (MUM .) 3. GLORIOUS REALTIES PVT. LTD. VS. ITO, 29 SOT 292 THE LEARNED AR SUBMITTED THAT SIMILAR ARGUMENTS ARE IN RESPECT OF DEDUCTION U/S 80GG & CALCULATION OF DEDUCTION U/S 8 0 HHC. 8. THE LEARNED DR REFERRING CHARGING SECTION 4 OF IT ACT SUBMITTED THAT WHEN THE ASSESSEE FILED A RETURN OF INCOME ALL THE PROVISIONS OF THE ACT ARE TO BE CONSIDERED AND RETURN OF INCOME S HOULD BE IN ACCORDANCE WITH PROVISIONS OF INCOME TAX ACT INCLUD ING SECTION 94(7). THE LEARNED DR SUBMITTED THAT THE JUDGMENT C ITED BY THE LEARNED AR IN CASE OF 244 ITR 188 IS NOT APPLICABLE TO THE FACT OF THE CASE UNDER CONSIDERATION AS IN THE CASE UNDER C ONSIDERATION THE ASSESSEE DID NOT PRESS THE RELEVANT GROUND OF MERIT APPEAL BEFORE ITAT. THE LEARNED DR SUBMITTED THAT PARTICUL ARS DO NOT MEAN INFORMATION. THE LEARNED DR SUBMITTED THAT THE RE WAS NO DISCLOSURE OF LOSS U/S 94(7) BY THE ASSESSEE. THE A SSESSEE IS DUTY BOUND TO POINT OUT SUCH LOSS U/S 94(7) OF THE ACT. THE LEARNED DR SUBMITTED THAT THE CASES CITED BY HE LEARNED AR ARE GO AGAINST THE ASSESSEE AS THE ASSESSEE DID NOT MAKE TRUE DISCLOSU RE. THE LEARNED DR SUBMITTED THAT PROVISIONS RELATED TO SECTION 94( 7) COVERS CERTAIN PRACTICES AND SOMEONE VIOLATE THOSE PROVISIONS THEY HAVE FACE THE CONSEQUENCES. THE LEARNED DR IN SUPPORT OF HIS CONT ENTION RELIED UPON DECISION OF THE SUPREME COURT IN THE CASE OF K .P. MADHUSUDHANAN V. COMMISSIONER OF INCOME-TAX251 ITR 99 (SC) AND RAJASTHAN HIGH COURT IN THE CASE OF COMMISSIONE R OF INCOME- ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 6 TAX V. MOHD. MOHTRAM FAROOQUI 259 ITR 132(RAJ). IT IS ALSO THE SUBMISSION OF THE LEARNED DR THAT WHEN THE ASSESSEE DID NOT PRESS THE GROUND IN MERIT APPEAL, THEREFORE, THOSE GROUND S CANNOT BE RAISED AT THE TIME OF PENALTY MATTER. 9. IN REJOINDER THE LEARNED AR SMUTTED THAT SECT ION 4 IS CHARGING SECTION AND NOTHING IS IN RESPECT OF DISCLOSURE OF PARTICULARS .THE APEX COURT IN THE CASE RELIANCE PETROPRODUCTS PVT.LD. (322 ITR 158) HAS NOT OVER LOOKED THIS SECTION 4 OF THE ACT. 10. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, PERUSED THE RECORD AND GONE THROUGH DECISI ONS CITED. BEFORE COMING TO THE MAIN ISSUE, WE WOULD LIKE TO D EAL WITH THE OBJECTION RAISED BY THE LEARNED DR THAT WHEN TH E ASSESSEE DID NOT PRESS RELEVANT GROUND IN MERIT APPEAL, THE SAME CANNOT BE AGITATED IN PENALTY PROCEEDING. IT IS SETTLED LA W THAT BOTH THE QUANTUM MATTER AND PENALTY MATTER ARE SEPARATE PROCEEDINGS. THE HONBLE KARNATAKA HIGH COURT IN TH E CASE OF PRASANNA ENTERPRISES VS. CIT, 244 ITR 188 (KAR.) HE LD THAT IN PENALTY PROCEEDINGS, THE ASSESSEE IS ENTITLED TO SH OW THAT HE HAS NOT COMMITTED THE OFFENCE AND FOR THAT PURPOSE EVEN FRESH EVIDENCE COULD BE SUBMITTED. WE, THEREFORE, DO NOT FIND SUBSTANCE IN THE SUBMISSION OF THE LEARNED DR IN TH IS REGARDS. NOW WE COME TO THE MAIN ISSUE. THE PROCEEDINGS UNDE R SECTION 271(1) (C) CAN BE INITIATED ONLY IF THE A.O OR THE FIRST APPELLATE AUTHORITY IS SATISFIED IN THE COURSE OF ANY PROCEED INGS UNDER THE ACT AS PER CLAUSE (C) OF THE SECTION 271(1) THA T ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, HE MAY DIREC T THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE SUM MENTIONE D IN SUB- CLAUSE (III) OF CLAUSE (C) OF THE SECTION 271(1). T HE EXPRESSION USED IN CLAUSE (C) OF THE SECTION 271(1) IS HAS CO NCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE, BOTH IN CASES OF CONCEA LMENT AND INACCURACY THE PHRASE PARTICULARS OF INCOME ARE U SED. IT WILL BE NOTED THAT AS REGARDS CONCEALMENT, THE EXPRESSIO N IN CLAUSE (C) OF THE SECTION 271(1) IS HAS CONCEALED THE PAR TICULARS OF HIS ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 7 INCOME AND NOT HAS CONCEALED HIS INCOME. THE EXP RESSIONS 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEF INED EITHER IN SECTION 271(1)(C) OR ELSEWHERE IN THE ACT. TWO W ORDS ARE IMPORTANT WORDS FOR CONSIDERING A MATTER FOR LEVY O F PENALTY UNDER SECTION 271(1) OF THE ACT . THESE WORDS ARE CONCEAL' AND 'INACCURATE PARTICULARS' .THE APEX COURT IN THE CAS E OF RELIANCE PETROPRODUCTS PVT.LD. (322 ITR 158) ( AT PAGE 164 ) REGARDING THE WORD PARTICULARS USED IN THIS SECTI ON, OF THE SECTION 271(1) (C) HAS HELD AS UNDER:_ THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEN D UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCU MENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACC URATE, THE LIABILITY WOULD ARISE. 10.1 NOW COMING TO THE MEANING OF WORDS INACCURAT E AND CONCEAL. AS STATED ABOVE, THESE WORDS HAVE NOT BE EN DEFINED IN THE ACT. HOWEVER, IN WEBSTERS DICTIONARY, THE W ORD 'INACCURATE' HAS BEEN DEFINED AS UNDER: 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRAN SCRIPT.' 10.2 THE WORD 'CONCEAL' IS DERIVED FROM THE LATIN CONCELARE WHICH IMPLIES CON+CELARE TO HIDE. WEBSTER IN HIS NE W INTERNATIONAL DICTIONARY EQUATES ITS MEANING 'TO HI DE OR WITHDRAW FROM OBSERVATION, TO COVER OR KEEP FROM SI GHT; TO PREVENT THE DISCOVERY OF; TO WITHHOLD KNOWLEDGE OF' . THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE O F THE INCOME-TAX AUTHORITIES. 10.3 THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LD. (322 ITR 158) HAS CONSIDERED SOME OTHER CASES OF THE APEX COURT ON THE ISSUE AT PAGE 164 AND 165 AND OB SERVED AS UNDER:- ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 8 IN DILIP N. SHROFF V. JT. CIT [2007] 6 SCC 329, TH IS 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 U NDER SECTION 271(1)( C), MENS REA WAS NECESSARY, AS ACCO RDING TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED A DELIBE RATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHO RITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON O F SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NO T EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TE RM 'INACCURATE PARTICULARS' WAS NOT DEFINED ANYWHERE I N THE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING ACCURATE 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 F ACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS 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 WEN T 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. SHROFFS CASE (SUPRA) WAS UPSET. IN DHARAMENDRA TEX TILE PROCESSORS CASE (SUPRA), AFTER QUOTING FROM SECTIO N 271 EXTENSIVELY 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 AS SESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULAR S WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENA CTMENT OF SECTION 271(1)( C) READ WITH EXPLANATIONS INDICA TED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AN D, THEREFORE, WILFUL CONCEALMENT IS NOT AN ESSENTIAL I NGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN T HE MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. THE BASI C REASON WHY DECISION IN DILIP N. SHROFFS CASE (SUPR A) WAS OVERRULED BY THIS COURT IN DHARAMENDRA TEXTILE PROC ESSORS CASE (SUPRA), WAS THAT CCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 27 6C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N.SHROFF (SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN DHARAMENDRATEXTILE PROCESSORS CASE (SUPRA), NO FAU LT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N . SHROFFS CASE (SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND 'INACCURATE'. IT WAS ONLY THE ULTIMATEINFERENCE IN DILIP N. SHROFFS CASE (SUPRA) TO THE EFFECT THAT MENS REA WASAN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 271(1)(C) THAT THE DECISION I N DILIP N. SHROFFS CASE (SUPRA) WAS OVERRULED. ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 9 10.4. FROM ABOVE DISCUSSIONS WE FIND THAT THERE IS STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GI VING INACCURATE PARTICULARS WHILE FILING THE RETURN. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL C ONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LI ABILITY. IT IS OBVIOUS THAT THE PENAL PROVISIONS WOULD OPERATE WHE N THERE IS CONCEALMENT OF PARTICULARS OF INCOME OR A FAILURE O F DUTY TO DISCLOSE FULLY AND TRULY PARTICULARS OF INCOME, IMP OSED UNDER THE ACT AND THE RULES THERE UNDER. THE DUTY IS ENJO INED UPON A PERSON TO MAKE A CORRECT AND COMPLETE DISCLOSURE OF PARTICULARS OF HIS INCOME AND IT IS ONLY WHEN HE FA ILS IN HIS DUTY BY NOT DISCLOSING PARTICULARS OF HIS INCOME OR PART THEREOF, HE CONCEALS THE PARTICULARS OF HIS INCOME. THE DUTY IS ENJOINED UPON HIM TO MAKE A COMPLETE DISCLOSURE OF PARTICULARS OF HIS INCOME AS WELL AS A CORRECT DISC LOSURE. THEREFORE, IF THE DISCLOSURE MADE OF THE PARTICULAR S OF INCOME IS INCORRECT, THEN ALSO HE COMMITS BREACH OF HIS DU TY. SUCH DEFAULTS ENTAIL THE PENAL CONSEQUENCES CONTEMPLATED BY SECTION 271(1) (C). 10.5 THERE CANNOT BE A STRAIGHT JACKET FORMULA FOR DETECTION OF THESE DEFAULTS OF CONCEALMENT OR OF FURNISHING I NACCURATE PARTICULARS OF INCOME AND INDEED CONCEALMENT OF PAR TICULARS OF INCOME AND IN ACCURATE PARTICULARS OF INCOME MAY AT TIMES OVERLAP. IT DEPENDS UPON THE FACTS OF THE EACH CASE . IN THE ASSESSMENT PROCEEDINGS THE AO WHILE ASCERTAINING TH E TOTAL INCOME CHARGEABLE TO TAX WOULD BE IN A POSITION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCOME CONCEALE D OR OF WHICH FALSE PARTICULARS ARE FURNISHED. WHERE IN THE CONST ITUENTS OF INCOME RETURNED, SUCH SPECIFIC OR DEFINITE PARTICUL ARS OF INCOME ARE DETECTED AS CONCEALED, THEN EVEN IN THE TOTAL INCOME FIGURE TO THAT EXTENT THEY REFLECT, IT WOULD AMOUNT TO CONCEALMENT TO THAT EXTENT. IN THE SAME WAY WHERE S PECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DETECTED AS INACCURATE, ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 10 THEN SUCH FIGURE WILL ALSO MAKE THE TOTAL INCOME IN ACCURATE IN PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. IN OTHER WORDS THE AO CANNOT INVOKE PROVISION OF SECTI ON271 (1) (C) ON THE BASIS ROUTINE AND GENERAL PRESUMPTIONS. WHETHER IT BE A CASE OF ONLY CONCEALMENT OR OF ONLY INACCURACY OR BOTH, THE PARTICULARS OF INCOME SO VITIATED WOULD BE SPEC IFIC AND DEFINITE AND BE KNOWN IN THE ASSESSMENT PROCEEDINGS BY THE ITO, WHO ON BEING SATISFIED ABOUT EACH CONCEALMENT OR INACCURACY OF PARTICULARS OF INCOME WOULD BE IN A P OSITION TO INITIATE THE PENALTY PROCEEDINGS ON ONE OR BOTH OF THE GROUNDS OF DEFAULT AS MAY HAVE BEEN SPECIFICALLY AND DIRECT LY DETECTED. 10.6. IN ADDITION TO MAIN PROVISIONS OF CO NCEALMENT HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FU RNISHED INACCURATE PARTICULARS OF SUCH INCOME THERE ARE DE EMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED .THE DEEMED CONCEALMENT IS PROVIDED IN EXPLANATIONS. OFTEN A QUESTION AROSE WHETHER IN CAS ES WHERE ADDITIONS OR DISALLOWANCES MADE BY THE ITO THE PENA L PROVISIONS OF SECTION271(1)(C) WOULD ATTRACT. EXPLA NATION 1 TAKES CARE OF THIS SITUATION. THE EXPLANATION 1 TO SECTION 271(1) OF THE ACT READS AS UNDER:- EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATE RIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSO N UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR O FFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE, 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 REL ATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHA LL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 10.7. A CONSPECTUS OF THE EXPLANATION MAKES IT CLEAR THAT THE STATUTE VISUALISED THE ASSESSMENT PROCEEDINGS A ND PENALTY ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 11 PROCEEDINGS TO BE WHOLLY DISTINCT AND INDEPENDENT O F EACH OTHER. IN ESSENCE, THE EXPLANATION IS A RULE OF EVI DENCE. PRESUMPTIONS WHICH ARE REBUTTING TABLE IN NATURE AR E AVAILABLE TO BE DRAWN. THE INITIAL BURDEN OF DISCHARGING THE ONUS OF REBUTTAL IS ON THE ASSESSEE. THE RATIONALE BEHIND T HIS VIEW IS THAT THE BASIC FACTS ARE WITHIN THE SPECIAL KNOWLED GE OF THE ASSESSEE. SECTION 106 OF THE INDIAN EVIDENCE ACT, 1 872, GIVES STATUTORY RECOGNITION TO THIS UNIVERSALLY ACCEPTED RULE OF EVIDENCE. THERE IS NO DISCRETION CONFERRED ON THE A SSESSING OFFICER AS TO WHETHER HE CAN INVOKE THE EXPLANATION OR NOT. EXPLANATION 1 COMES INTO OPERATION WHEN, IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME O F ANY PERSON, THERE IS FAILURE TO OFFER AN EXPLANATION OR AN EXPLANATION IS OFFERED WHICH IS FOUND TO BE FALSE B Y THE ASSESSING OFFICER OR THE FIRST APPELLATE AUTHORITY, OR AN EXPLANATION IS OFFERED WHICH IS NOT SUBSTANTIATED. IN SUCH A CASE, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME IS DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. AS PER THE PROVISI ON OF EXPLANATION 1, THE ONUS TO ESTABLISH THAT THE EXPLA NATION OFFERED WAS BONA FIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME HAVE BEEN DISCLOSED BY HIM WILL BE ON THE PERSON CHARGED WITH CONCEALME NT. 10.8 THE ISSUE RELATING TO BONAFIDE AND FALSE RETURNS IN IMPOSING PENALTY ON THE ASSESSEE UNDER SECTION 43 O F THE MADHYA PRADESH GENERAL SALES TAX ACT, 1958, AND SEC TION 9(2) OF THE CENTRAL SALES TAX ACT, 1956 HAVE BEEN EXAMIN ED BY THE APEX COURT IN THE CASE OF CEMENT MARKETING CO. OF I NDIA LTD. V .ASSISTANT COMMISSIONER OF SALES TAX [1980] 4 TAXMA N 44 (SC), 124 ITR 15 (SC). FACTS IN BRIEF OF THIS CASE WERE THAT THE ASSESSEE-COMPANY EFFECTED CERTAIN TRANSACTIONS OF SALE OF CEMENT IN ACCORDANCE WITH THE PROVISIONS OF THE CEM ENT CONTROL ORDER DURING THE ASSESSMENT PERIOD 1-8-1971 TO 31-7- 1972. THE AMOUNT OF FREIGHT INCLUDED IN THE 'FREE O N RAIL DESTINATIONS RAILWAY STATION' WAS PAID BY THE PURCH ASERS AND ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 12 HENCE THE ASSESSEE DEDUCTED FROM THE PRICE SHOWN IN THE INVOICES SENT TO THE PURCHASERS. IN THE COURSE OF I TS ASSESSMENT TO SALES TAX UNDER THE MADHYA PRADESH GE NERAL SALES TAX ACT, 1958 AND THE CENTRAL SALES TAX ACT, 1956, THE ASSESSEE DID NOT INCLUDE THE SAID AMOUNT OF FREIGHT IN ITS TAXABLE TURNOVER ON THE GROUND THAT IT DID NOT FORM PART OF THE SALE PRICE. IN HIS TWO SEPARATE ASSESSMENT ORDERS, ONE UNDER THE CENTRAL SALES TAX ACT, 1956, AND THE OTHER UNDE R THE MADHYA PRADESH GENERAL SALES TAX ACT, 1958, THE ASS ISTANT COMMISSIONER, HOWEVER, INCLUDED THE SAME IN THE TAX ABLE TURNOVER FOR LEVYING TAX. HE ALSO IMPOSED HEAVY PEN ALTY ON ACCOUNT OF THE ASSESSEE'S FAILURE TO DISCLOSE THE S AME IN ITS TAXABLE RETURNS. ON DIRECT APPEAL TO THE SUPREME CO URT HELD THAT IT IS DIFFICULT TO SEE HOW THE ASSESSEE COULD BE SAID TO HAVE FILED 'FALSE' RETURNS, WHEN WHAT THE ASSESSEE DID, NAMELY, NOT INCLUDING THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER, WAS UNDER A BONA FIDE BELIEF THAT THE AMOUNT OF FRE IGHT DID NOT FORM PART OF THE SALE PRICE AND WAS NOT INCLUDIBLE IN THE TAXABLE TURNOVER. THE CONTENTION OF THE ASSESSEE TH ROUGHOUT WAS THAT ON A PROPER CONSTRUCTION OF THE DEFINITION OF 'SALE PRICE' IN SECTION 2(O) OF THE MADHYA PRADESH GENERA L SALES TAX ACT, 1958, AND SECTION 2(H) OF THE CENTRAL SALES TA X ACT, 1956, THE AMOUNT OF FREIGHT DID NOT FALL WITHIN THE DEFIN ITION AND WAS NOT LIABLE TO BE INCLUDED IN THE TAXABLE TURNOVER. THIS WAS THE REASON WHY THE ASSESSEE DID NOT INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER IN THE RETURNS FILED BY IT. THE COURT FURTHER HELD THAT IT WAS A HIGHLY ARGUABLE CONTENTI ON WHICH REQUIRED SERIOUS CONSIDERATION BY THE COURT AND THE BELIEF ENTERTAINED BY THE ASSESSEE THAT IT WAS NOT LIABLE TO INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER, COUL D NOT BE SAID TO BE MALA FIDE OR UNREASONABLE. WHAT SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT, 1958, REQUIRE S IS THAT THE ASSESSEE SHOULD HAVE FILED A 'FALSE' RETURN. WH ERE THE ASSESSEE DOES NOT INCLUDE A PARTICULAR ITEM IN THE TAXABLE TURNOVER UNDER A BONA FIDE BELIEF THAT HE IS NOT LI ABLE SO TO INCLUDE IT, IT WOULD NOT BE RIGHT TO CONDEMN THE RE TURN AS A ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 13 'FALSE' RETURN INVITING IMPOSITION OF PENALTY. THE COURT HELD THAT IF THE VIEW CANVASSED ON BEHALF OF THE REVENUE WERE ACCEPTED, THE RESULT WOULD BE THAT EVEN IF THE ASSE SSEE RAISES A BONA FIDE CONTENTION THAT A PARTICULAR ITEM IS NOT LIABLE TO BE INCLUDED IN THE TAXABLE TURNOVER, HE WOULD HAVE TO SHOW IT AS FORMING PART OF THE TAXABLE TURNOVER IN HIS RETURN AND PAY TAX UPON IT ON PAIN OF BEING HELD LIABLE FOR PENALTY IN CASE HIS CONTENTION IS ULTIMATELY FOUND BY THE COURT TO BE N OT ACCEPTABLE. THAT SURELY COULD NEVER HAVE BEEN INTEN DED BY THE LEGISLATURE. UNDER THE CIRCUMSTANCE OF THE CASE THE COURT WAS OF THE VIEW THAT THE ASSESSEE COULD NOT BE SAID TO HAVE FILED 'FALSE' RETURNS WHEN IT DID NOT INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER SHOWN IN THE RETURNS AND THE A SSISTANT COMMISSIONER WAS NOT JUSTIFIED IN IMPOSING PENALTY ON THE ASSESSEE UNDER SECTION 43 OF THE MADHYA PRADESH GEN ERAL SALES TAX ACT, 1958, AND SECTION 9(2) OF THE CENTRA L SALES TAX ACT, 1956. 10.9. FROM THE ABOVE DISCUSSION OF SCHEME O F THE ACT, TWO IMPORTANT THINGS COME OUT ARE THAT IT IS THE DU TY OF THE ASSESSEE TO FURNISH PARTICULARS OF INCOME SIMULTANE OUSLY HE HAS RIGHT TO CLAIM ALL EXEMPTIONS AND DEDUCTIONS PR OVIDED IN THE ACT, ACCORDING TO THE ASSESSEE FOR WHICH HE IS ENTITLED. THE DUTY OF THE ASSESSING OFFICER IS TO ASSESS REAL AND CORRECT INCOME IN ACCORDANCE WITH LAW. THE CBDT IN ITS CIRC ULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 REGARDING DEPART MENTAL ATTITUDE TOWARDS STATED THAT THE CBDT IN ITS CIR CULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 REGARDING DEPART MENTAL ATTITUDE TOWARDS STATED THAT OFFICERS OF THE DEP ARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS T O HIS RIGHTS. IT IS ONE OF THEIR DUTIES TO ASSIST A TAXPA YER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIM ING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SH OULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND O R RELIEF IS DUE TO HIM. IT IS FURTHER STATED THAT OFFICERS SHOU LD, WHEN ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 14 REQUESTED, FREELY ADVISE ASSESSEES THE WAY IN WHICH ENTRIES SHOULD BE MADE IN VARIOUS FORMS, THEY SHOULD NOT TH EMSELVES MAKE ANY IN THEM ON THEIR BEHALF. WHERE SUCH ADVICE IS GIVEN, IT SHOULD BE CLEARLY EXPLAINED TO THEM THAT THEY AR E RESPONSIBLE FOR THE ENTRIES MADE IN ANY FORM AND TH AT THEY CANNOT BE ALLOWED TO PLEAD THAT THEY WERE MADE UNDE R OFFICIAL INSTRUCTIONS. 10.10 IN THE LIGHT OF ABOVE DISCUSSION WE CONS IDER THE FACTS OF THE CASE UNDER CONSIDERATION. ON PERUSAL OF THE ORDERS OF REVENUE AUTHORITIES, WE FIND THAT THE PENALTY U/S 2 71(1)(C) WAS LEVIED MAINLY ON THE GROUND THAT THE ASSESSEES CLA IMS U/S 94(7), 80 GG B AND 80 HHC ARE NOT CORRECT. IN SUCH CASES THE EXPLANATION OF THE ASSESSEE IS TO BE SEEN. EXPLANAT ION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER; THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOM E. THE LEARNED AR HAS DEMONSTRATED THAT THE CLAIMS OF THE ASSESSEE WERE BONAFIDE CLAIM AFTER MAKING FULL DISCLOSURE. T HE LEARNED AR REFERRED THE RELEVANT PORTION OF RETURN OF INCOM E OF WHICH PHOTO COPY HAS FURNISHED IN THE PAPER BOOK. ACCORDI NG TO SCHEDULE C-CAPITAL GAIN PAGE 6 OF THE INCOME TAX RE TURN FORM THE ASSESSEE IN COLUMN A STATE REGARDING DETAIL OF CAPITAL GAIN/LOSS WHERE IT IS FILLED UP BY THE ASSESSEE BY WRITING AS PLEASE REFER ANNEXURE II GIVING COMPLETE DETAILS. WE NOTICED THAT THAT THERE WERE NO SPECIFIC REQUIREMENTS IN TH E RETURN FORM APPLICABLE TO THE YEAR UNDER CONSIDERATION. SU CH COLUMN IN THE RETURN HAS BEEN INSERTED BY AMENDMENT IN RET URN FORM, ITR-6, AT PAGE 17, SCHEDULE CG CAPITAL GAIN SNO3 (D) WHICH IS APPLICABLE FROM AY 2007-08. THE APEX COURT IN TH E CASE OF RELIANCE PETROPRODUCTS PVT. LD. (322 ITR 158) ( AT PAGE 164 ) REGARDING THE WORD PARTICULARS USED IN THIS SECTI ON, OF THE SECTION 271(1) (C) HAS HELD THAT THERE CAN BE NO DI SPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAU SE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH T HE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS AR E FOUND TO ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 15 BE INACCURATE, THE LIABILITY WOULD ARISE. BUT IN TH E CASE UNDER CONSIDERATION WE FIND THAT THE ASSESSEE HAS FURNISH ED FULL DETAIL AND HAS NOT CONCEALED ANY PARTICULARS OF INC OME OR HAS FURNISHED ANY INACCURATE PARTICULAR OF INCOME. IN T HE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (322 ITR 158) (SC) THE HONBLE SUPREME COURT HELD THAT WHERE THERE IS NO FINDING T HAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY U/S 271(1)(C). A MERE MAKING OF A CLAIM , WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. THE CASE OF THE ASSESSEE UN DER CONSIDERATION IS SQUARELY COVERED BY THEE ABOVE JUD GMENT OF THE APEX COURT. THE ASSESSEE DEMONSTRATED THAT THEI R CLAIMS WERE BONAFIDE CLAIMS. THE CLAIM REGARDING 80 HHC & 80 GG HAVE BEEN SENT BACK TO THE AO AND SOME PART OF GROU ND RELATED TO 80 HHC HAS BEEN DECIDED IN FAVOUR OF THE ASSESSE E BY THE ITAT, THEREFORE, IN THE LIGHT OF ABOVE DISCUSSION, WE DONT FIND THAT THE CASE UNDER CONSIDERATION IS A FIT CASE FOR LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT WE THEREFORE CAN CELLED THE PENALTY LEVIED. 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF JULY, 2010. SD/- SD/- (V. DURGA RAO) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH JULY, 2010. ITA NO. 1833/M/09 HINDALCO INDUSTRIES LTD. 16 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, H BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 30.4.2010 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 3.5.2010 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER