SHRI NITIN JAIN, Indore V. THE ACIT 4(1), Indore

ITA 21/IND/2015

• Counselvise Citation: 2122714 RSA 2015
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S DESH
• Assessee Lawyers: R A VERMA
• Keywords: Initiation of penalty proceedings; Wrong claim
• Section: 28

Judgement Text

M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JM & SHRI B.C. MEENA, AM ITA NO. 02/IND/2015 A.Y. 2007-08 ACIT-2(1), BHOPAL . APPELLANT VS. M.P. STATE TOURISM DEVELOPMENT CORPORATION LTD., BHOPAL PAN AABCM 0086 A . RESPONDENT APPELLANT BY : SHRI R.A. VERMA, SR. DR RESPONDENT BY : SHRI S.S. DESHPANDE, CA DATE OF HEARING : 02.06.2015 ITA NOS. 77 TO 79/IND/2014 A.YS. 2003-04 & 2004-05 SMT. BRIJBALA TIWARI, INDORE PAN ABAPT 7401 P . APPELLANT VS. ACIT, CIRCLE-3(1), INDORE . RESPONDENT APPELLANT BY : SHRI ANIL KHANDELWAL, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 13.05.2015 M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 2 ITA NO. 229/IND/2015 A.Y. 2009-10 PURSHOTTAM DAS GUPTA, AGAR MALWA PAN ABUPG 7193 B . APPELLANT VS. ITO-SHAJAPUR . RESPONDENT APPELLANT BY : SHRI G.B. AGRAWAL, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 02.06.2015 ITA NO. 21/IND/2015 A.Y. 2010-11 NITIN JAIN, INDORE PAN ACAPP 3389 H . APPELLANT VS. ACIT-4(1), INDORE . RESPONDENT APPELLANT BY : SHRI ANIL KAMAL GARG, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 01.06.2015 M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 3 ITA NO. 47/IND/2015 A.Y. 2006-07 SMT. PUSHPA GARG, INDORE PAN BJAPG 1026 Q . APPELLANT VS. ACIT-3(1), INDORE . RESPONDENT APPELLANT BY : SHRI S.S. SOLANKI, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 01.06.2015 ITA NO. 337/IND/2014 A.Y. 2008-09 M/S. SHIV OFFSET INDIA PVT. LTD., INDORE PAN AAICS 4399 B . APPELLANT VS. ACIT-4(1), INDORE . RESPONDENT APPELLANT BY : SHRI S.S. DESHPANDE, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 10.06.2015 M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 4 ITA NO. 759/IND/2013 A.Y. 2007-08 S.P. TOOLS & PROCESSORS LTD., INDORE PAN AACCS 4127 P . APPELLANT VS. ACIT, CIRCLE-1(2), INDORE . RESPONDENT APPELLANT BY : SHRI P.D. NAGAR, CA RESPONDENT BY : SHRI R.A. VERMA, SR. DR DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 3.8.2015 ORDER PER BENCH ALL THE ABOVE APPEALS ARE FILED BY THE REVENUE/ASS ESSEES CHALLENGING THE ORDERS OF THE RESPECTIVE LEARNED CO MMISSIONER M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 5 OF INCOME TAX (APPEALS) WITH REGARD TO ISSUE OF IMP OSITION OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. ITA NO.2/IND/2015 (DEPARTMENTAL APPEAL) IN CASE OF M.P. STATE TOURISM DEVELOPMENT DURING COURSE OF HEARING, LD. AR HAS RAISED THE ISS UE WITH REGARD TO RECORDING OF SATISFACTION WHILE INITIATIN G THE PENALTY U/S 271(1)(C) OF THE I.T. ACT. LD. AR SUBMITTED THA T IN THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS O F INCOME WHILE THE LD. AO LEVIED THE SAME ON THE GROUND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME, T HEREFORE, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF T. ASHOK PAI, 292 ITR 11, THE APPEAL OF THE REVENUE MA Y BE DISMISSED. LD. DR OPPOSED THE SUBMISSION OF THE ASS ESSEE AND RELIED ON THE ORDER OF THE A.O. M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 6 ITA NOS.77 TO 79/IND/2014 (ASSESSEES APPEALS) IN CASE OF SMT. BRIJBALA TIWARI DURING COURSE OF HEARING, LD. AR SUBMITTED THAT THE A.O. HAS NOT RECORDED CLEAR CHARGE OF CONCEALMENT OR INAC CURATE PARTICULARS WHILE PASSING ASSESSMENT ORDERS. FOR T HE A.Y. 2003-04, HE INVITED OUR ATTENTION TO PARAS 4.2.2 & 4.4.4 OF THE ASSESSMENT ORDER WHEREIN ADDITIONS ARE MADE AND NO CHARGE IS SPECIFIED. FOR THE A.Y. 2004-05, HE INVITED OUR ATT ENTION TO PARAS 4.2.2, 4.3.2 & 4.4.4 OF THE ASSESSMENT ORDER WHEREIN ADDITIONS ARE MADE AND NO CLEAR AND SPECIFIED CHARG E IS SPECIFIED. FOR THE A.Y. 2005-06, HE INVITED OUR ATT ENTION TO PARAS 4.2.2, 4.3.2, 4.4.4 & 4.5.2 OF THE ASSESSMENT ORDER WHEREIN ADDITIONS ARE MADE AND NO CLEAR AND SPECIFI ED CHARGE IS SPECIFIED. THEREFORE, LD. AR SUBMITTED THAT AS N O CLEAR AND SPECIFIED CHARGE WAS RECORDED, NO PENALTY CAN BE LE VIED IN THESE YEARS. LD. DR OPPOSED THE SAME AND RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 7 ITA NO. 229/IND/2015 (ASSESSEES APPEAL) IN CASE OF PURSHOTTAM DAS GUPTA IN THIS CASE, LD. AR HAS RAISED THE ISSUE THAT WHIL E PASSING THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y FOR FURNISHING INACCURATE PARTICULARS WHILE THE A.O. HA S LEVIED THE PENALTY FOR CONCEALMENT OF PARTICULAR OF THE INCOME . FOR CLARITY, WE REPRODUCE THE RELEVANT PORTION AS UNDER: FROM ASSESSMENT ORDER: IN VIEW OF ASSESSEES REPLY AS ABOVE AND FACT THAT THE HAS SURRENDERED THE LIABILITY AS HIS INCOME, THE AM OUNT OF RS.7,07,616/- IS ADDED TO THE TOTAL INCOME OF THE A SSESSEE. PENALTY PROCEEDINGS U/S 271(1)(C) IS INITIATED SEPA RATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FROM PENALTY ORDER: THEREFORE, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME AND THUS HA S M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 8 COMMITTED DEFAULT WITHIN THE MEANING OF SECTION 271 (1) OF THE I.T. ACT, 1961. HENCE, I LEVY A PENALTY OF RS.2,38,000/- ON THE ASSESSEE U/S 271(1)(C) OF THE I.T. ACT, 1961 FOR THE A.Y. 2009-10. ITA NO.21/IND/2015 (ASSESSEES APPEAL) IN CASE OF NITIN JAIN IN THIS CASE, LD. AR HAS RAISED THE ISSUE THAT WHIL E PASSING THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y FOR FURNISHING INACCURATE PARTICULARS WHILE THE A.O. HA S LEVIED THE PENALTY FOR CONCEALMENT OF PARTICULAR OF THE INCOME . FOR CLARITY, WE REPRODUCE THE RELEVANT PORTION AS UNDER: FROM ASSESSMENT ORDER: PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961 IS BEING INITIATED SEPARATELY FOR FURNISHING INACCU RATE PARTICULARS OF HIS INCOME. M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 9 FROM PENALTY ORDER: IN VIEW OF THE ABOVE DISCUSSION AND VARIOUS PRONOUNCEMENTS BY THE COURTS ON THE ISSUE IN FAVOUR OF DEPARTMENT, I AM SATISFIED THAT THE ASSESSEE HAS CO NCEALED THE PARTICULARS OF INCOME BEING THE UNEXPLAINED CAS H DEPOSITED OF RS.25,13,000/- BY THE ASSESSEE, THEREF ORE, THE ASSESSEE IS COVERED FOR IMPOSITION OF PENALTY U NDER CLAUSE (C) OF SUB SECTION OF 1 TO SECTION 271 OF I. T. ACT, 1961. ITA NO.47/IND/2015 (ASSESSEES APPEAL) IN CASE OF SMT. PUSHPA GARG IN THIS CASE, LD. AR HAS RAISED THE ISSUE THAT WHIL E PASSING THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y FOR CONCEALMENT OF PARTICULARS OF THE INCOME WHILE THE A.O. HAS LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTIC ULARS OF INCOME. FOR CLARITY, WE REPRODUCE THE RELEVANT PORT ION AS UNDER: M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 10 FROM ASSESSMENT ORDER: IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE ASSES SEE HAS FURNISHED INACCURATE PARTICULAR WHICH HAS RESUL TED IN THE CONCEALMENT OF INCOME THEREFORE PENALTY U/S 271 (1) IS INITIATED FOR THIS ADDITION. FROM PENALTY ORDER: THE ASSESSEE HAS FAILED TO MAKE ANY SUBMISSION. THE FACTS OF THE CASE CLEARLY ESTABLISHES THAT THE ASSE SSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS AND F AILED TO DISCLOSE TRUE AND COMPLETE FACTS. THEREFORE, THE PE NALTY OF 100% OF THE TAX ON CONCEALED INCOME IS BEING IMPOSE D. ITA NO. 337/IND/2014 (ASSESSEES APPEAL) IN CASE OF SHIV OFFSET INDIA P. LTD. IN THIS CASE, LD. AR HAS RAISED THE ISSUE THAT WHIL E PASSING THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y FOR FURNISHING INACCURATE PARTICULARS WHILE THE A.O. HA S LEVIED THE M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 11 PENALTY FOR CONCEALMENT OF PARTICULAR OF THE INCOME . FOR CLARITY, WE REPRODUCE THE RELEVANT PORTION AS UNDER: FROM ASSESSMENT ORDER: ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR RS.3,35,852/- IS DISALLOWED AND SHALL BE ADDED TO T HE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271 (1) OF I.T. ACT, 1961 ARE INITIATED FOR ASSESSEES FURN ISHING INACCURATE PARTICULARS OF HIS INCOME. FROM PENALTY ORDER: THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME BEING THE WRONG CLAIM MADE BY ASSESSEE AND THEREFOR E THE CASE IS A FIT CASE FOR IMPOSITION OF PENALTY UNDER CLAUSE OF SUB SECTION OF 1 TO SECTION 271 OF I.T. ACT, 196 1. ITA NO.759/IND/2013 (ASSESSEES APPEAL) IN CASE OF S.P. TOOLS & PROCESSORS LTD. IN THIS CASE, LD. AR HAS RAISED THE ISSUE THAT WHIL E PASSING THE ASSESSMENT ORDER, THE A.O. HAS INITIATED THE PENALT Y FOR FURNISHING INACCURATE PARTICULARS WHILE THE A.O. HA S LEVIED THE M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 12 PENALTY FOR CONCEALMENT OF PARTICULAR OF THE INCOME . FOR CLARITY, WE REPRODUCE THE RELEVANT PORTION AS UNDER: FROM ASSESSMENT ORDER: THE OTHER EXPENSES CLAIMED ARE NOT ALLOWABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES AS SUCH THE SAME ARE NOT ALLOWED. THE PENALTY PROCEEDINGS U/S 271(1) IS INITIATED FO R FURNISHING INACCURATE PARTICULARS OF INCOME. FROM PENALTY ORDER: IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS NOT SUBMITTED CORRECT FACTS ABOUT ITS INCOME AND HA S CONCEALED THE PARTICULARS OF ITS INCOME WITHIN THE MEANINGS U/S 271(1) OF THE I.T. ACT AND THEREFORE IS LIABLE TO PENALTY UNDER THIS SECTION 2. IN ALL THESE APPEALS, EITHER THE A.O. HAS IMPOSE D THE PENALTY FOR FURNISHING INACCURATE PARTICULARS WHILE THE A.O. HAS M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 13 IMPOSED THE PENALTY FOR CONCEALMENT OF INCOME OR TH E A.O. HAS INITIATED PENALTY FOR CONCEALMENT OF INCOME WHILE T HE A.O. HAS LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTIC ULARS. THEREFORE, AS PER THE DECISIONS OF HONBLE SUPREME COURT AND VARIOUS HIGH COURTS, THE A.O. MUST COME TO THE CONC LUSION THAT THE A.O. HAS TO SATISFY WHETHER PENALTY HAS BE EN IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISH ING INACCURATE PARTICULARS OF INCOME. THUS, SATISFACTIO N OF THE A.O. ABOUT CONCEALMENT OF PARTICULARS OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME IS ESSENTIAL BEFOR E LEVYING ANY PENALTY U/S 271(1) OF THE I.T. ACT, 1961. LD. DR S UBMITTED THAT WITH INSERTION SUB-SECTION (1B) IN SECTION 271 W.E.F. 1.4.1989, THE DIRECTION OF INITIATION OF PENALTY PR OCEEDINGS IN THE ORDER OF A.O. SHALL BE DEEMED TO SATISFACTION. 3. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH PARTIES. WE HAVE GONE THROUGH THE PROVISIONS OF SEC. 271(1)(C). WE N OTED THAT PENALTY U/S 271(1)(C) IS LEVIABLE IF AO IS SATISFIE D IN THE COURSE OF ANY PROCEEDINGS UNDER THE INCOME TAX ACT THAT AN Y PERSON M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 14 HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF INCOME. FROM THE ASSESSME NT ORDER WE NOTED THAT THERE IS NO INDICATION WHICH SPEAKS O F AO BEING SATISFIED DURING THE COURSE OF THE ASSESSMENT THAT THE ASSESSEE HAS COMMITTED DEFAULT AS STIPULATED U/S 271(1)(C). NO DOUBT, LEGISLATURE HAS INSERTED SUB-SECTION (1B) IN SEC. 2 71 BY FINANCE ACT, 2008 W.R.E.F. 1.4.1989 PROVIDED THAT DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE ORDER OF ASSESSMENT S HALL BE DEEMED TO CONSTITUTE SUCH SATISFACTION. IN THE ASSE SSMENT WE FIND THAT THERE IS NO SUCH DIRECTION. DIRECTION IS GIVEN ONLY TO THE STAFF TO ISSUE AO, DN & CHALLAN & PEN. NOTICE U/S 271(1)(C). THIS, IN OUR OPINION, DOES NOT TANTAMOU NT TO A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) AS THE AO HAS NOT UTTERED ANYTHING IN THE ASSESSMENT O RDER IN THIS REGARD. THE ACTION OF THE AO, IN OUR OPINION, IS TOTALLY ILLEGAL AND DOES NOT MEET THE REQUIREMENT OF SEC. 2 71(1)(C) EVEN AFTER THE AMENDMENT MADE BY THE FINANCE ACT, 2008. IN THE CASE OF MS. MADHUSHREE GUPTA BRITISH AIRWAYS PLC V S. UNION M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 15 OF INDIA, 317 ITR 107 (DEL), THE SCOPE OF AMENDMENT WAS EXPLAINED BY THE HON'BLE DELHI HIGH COURT AS UNDER : IN OUR OPINION, THE IMPUGNED PROVISION ONLY PROVIDES THAT AN ORDER INITIATING PENALTY CANNOT BE DECLARED BAD IN LAW BECAUSE IT STATES THE PENALTY PROCEEDINGS ARE INITIATED, IF OTHERWISE IT IS DISCE RNIBLE FROM RECORD THAT THE AO HAS ARRIVED AT PRIMA FACIE SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS. THE ISSUE IS OF DISCERNIBILITY OF THE SATISFACTION AR RIVED AT BY THE AO DURING THE COURSE OF PROCEEDING BEFORE HIM. THE PRESENCE OF PRIMA FACIE SATISFACTION FOR INITI ATION OF PENALTY PROCEEDINGS WAS AND REMAINS A JURISDICTIONAL FACT WHICH CANNOT BE WISHED AWAY AS THE PROVISION STANDS EVEN TODAY, I.E. POST AMENDMENT. IF THERE IS NO MATERIAL TO INITIATE PENALTY PROCEE DINGS; AN ASSESSEE WILL BE ENTITLED TO RECOURSE TO A COURT OF LAW. 4. THIS IS THE SETTLED LAW THAT THE PENALTY PROCEED INGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT. THE PENALTY P ROCEEDINGS CAN BE INITIATED ON TWO CHARGES I.E. I) CONCEALMENT OF PARTICULARS OF INCOME AND II) FURNISHING OF INACCUR ATE PARTICULARS OF INCOME. BOTH THE CHARGES ARE ENTIREL Y DIFFERENT. IF THE PROCEEDINGS ARE INITIATED ON CHARGE OF CONCEALM ENT, THEN M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 16 PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AND VICE VERSA. TH US, THERE MUST BE A CLEAR FINDING ABOUT THE CHARGE FOR WHICH PENALTY IS IMPOSED OR INITIATED. IT IS INCUMBENT UPON THE AO T O STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH FINDINGS, THE ORDER WOULD BE BAD IN LAW. THE CASE OF NEW SORATHIA ENGINEERING CO. LTD., 282 ITR 642, HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER: - IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STAT E WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMEN T OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASSESSEE. HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE COMMISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRIBUNAL HAD FAILED T O APPRECIATE THIS LEGAL ISSUE. THE RATION IN CIT V. M ANU ENGINEERING WORKS 132 ITR 306 (GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT BE UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. IN THE CASE OF COMMISSIONER OF INCOME TAX V. RAJAN AND CO., 291 ITR 340 (DEL), WHEREIN IT IS HELD THAT THE PROV ISION OF M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 17 SECTION 271 (1) (C) OF THE INCOME TAX 1961 WOULD RE QUIRE PROPER APPLICATION OF MIND AND RECORDING OF AT LEAST A BAR E MINIMUM OPINION ON THE PART OF AO THAT A CASE FOR INITIATIO N OF PENALTY PROCEEDING WAS MADE AS THERE WAS CONCEALMENT OF INC OME OR THAT INCORRECT PARTICULARS HAD BEEN FURNISHED BY TH E ASSESSEE WITH THE INTENTION TO AVOID PAYMENT OF TAXES. THIS VIEW IS SUPPORTED BY VARIOUS DECISIONS OF HIGH COURT THEREF ORE IT IS NOT NECESSARY TO DISCUSS THE OTHER JUDGMENT ON THE ISSU E. 5. AO HAS NOT MADE OUT ANY SPECIFIC CHARGE EITHER OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY U/S 2 71(1) (C) CAN BE LEVIED FOR EITHER OF THE CHARGE. THE PENALTY ORDER SIMPLY STATES THAT PENALTY IS ATTRACTED ON THIS ADDITION A S IT IS MANDATORY AND AUTOMATIC. IT DOES NOT STATE FOR WHAT DEFAULT PENALTY IS LEVIED SEC. 271(1) (C) (III) IS EXPRESSL Y CLEAR THAT THE PENALTY CAN BE LEVIED FOR CONCEALMENT OF PARTICULAR S OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS THE PARTICULARS OF INCOME WHICH IS THE COMMON SUBJECT M ATTER OF M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 18 BOTH THE CHARGES. THE WORD CONCEAL AS PER WEBSTER S DICTIONARY MEANS TO HIDE, WITHDRAW, OR REMOVE FROM OBSERVATION; COVER OR KEEP FROM SIGHT; TO KEEP SECR ET; TO AVOID DISCLOSING OR DIVULGING. THAT MEANS NON DISCLOSURE OF PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE PAR TICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULAR S OF INCOME. FOR EXAMPLE, IN CASE OF BUSINESSMAN, IF A P ARTICULAR TRANSACTION OF SALE IS NOT SHOWN IN THE BOOKS, IT W OULD AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME WHILE SALE IS SHOWN BUT AT A LESSER VALUE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 6. IT IS PERTINENT TO NOTE THAT THRUST OF THE LEGI SLATURE IS UPON THE PARTICULARS OF INCOME WHICH ARE EITHER CONCEALE D OR FURNISHED INACCURATELY BY THE ASSESSEE. THEREFORE, ONE MUST UNDERSTAND THE MEANING OF THE WORDS PARTICULARS OF INCOME. THE INCOME TAX TRIBUNAL HAD TO CONSIDER THE MEANING OF THE EXPRESSION FURNISHING OF INACCURATE PARTICULARS OF INCOME M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 19 APPEARING IN SECTION 271(1) (C) IN THE CASE OF KANB AY SOFTWARE INDIA (P) LTD, 122 TTJ 721 (PUNE). IT WAS HELD THAT THE EXPRESSION PARTICULAR REFERS TO FACTS, DETAILS, SPECIFICS OR THE INFORMATION ABOUT SOMEONE OR SOMETHING. THUS, THE D ETAILS OR INFORMATION ABOUT THE INCOME WOULD DEAL WITH FACTUA L DETAILS OF INCOME AND CANNOT BE EXTENDED TO AREAS WHICH ARE SU BJECTIVE SUCH AS STATUS OF THE TAXABILITY OF AN INCOME ADMIS SIBILITY OF A DEDUCTION AND INTERPRETATION OF LAW. ACCORDINGLY, I T WAS HELD THAT MERE REJECTION OF A LEGAL CLAIM WOULD NOT AMOU NT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THI S VIEW IS FORTIFIED BY THE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS, 322 ITR 158 SC. IN THIS CAS E, THE CLAIM OF ASSESSEE U/S 36(1) (III) WAS REJECTED BY THE A O AND THE ORDER OF AO WAS UPHELD BY THE TRIBUNAL. AS A RESULT THERE OF, THE PENALTY U/S 271(1) (C) WAS IMPOSED ON ACCOUNT OF FU RNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY WAS H ELD TO BE ILLEGALLY IMPOSED BY THE TRIBUNAL SINCE FACTUAL DET AILS OF INCOME FURNISHED BY THE ASSESSEE WERE FOUND TO BE CORREC T. THE M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 20 MATTER ULTIMATELY REACHED THE SC AND THE HONBLE CO URT UPHELD THE VIEW OF THE TRIBUNAL BY HOLDING THAT MERE MAKI NG OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNTING TO FURNISHING INACCURATE CLAIM OF FURNISH ING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 7. EXPLANATION 1 TO SECTION 271(1) (C) CANNOT BE A PPLIED WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING O F INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES A DEEMING F ICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY AND CONSE QUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST T HE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. ON THE OTHER HAND, WHERE CHARGE AGAINST THE AS SESSEE IS FURNISHING INACCURATE PARTICULARS OF INCOME, THE AO HAS TO ESTABLISH EITHER THAT ASSESSEE HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISIONS OR THE CASE OF ASSESSEE FALLS WITHIN THE SCOPE OF THE DEEMING FI CTIONS CREATED UNDER THE EXPLANATIONS. FOR EXAMPLE, THE ASSESSEE MIGHT NOT M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 21 DISCLOSE PARTICULAR SALES OR DIVIDEND INCOME OR INC OME FROM ANY SOURCE. SUCH INSTANCES WOULD FALL UNDER THE MAI N PROVISIONS ITSELF. IN SUCH CASES, THE BURDEN IS ON THE AO TO ESTABLISH THE EXISTENCE OF THE CHARGE ON THE BASIS OF MATERIAL ON RECORD. 9. EXPLANATION 1 TO SECTION 271(1) (C) STATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME O F THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RESPEC T OF WHICH PARTICULARS HAVE BEEN CONCEALED. THIS DEEMING PROVI SION IS NOT ABSOLUTE ONE BUT IS REBUTTABLE ONE. IT ONLY SHIFTS THE ONUS ON THE ASSESSEE. EXPLANATION 1 REFERS TO THE TWO SITUA TIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICU LARS OF INCOME IS DEEMED. IT IS NOT APPLICABLE WHERE THE CH ARGE AGAINST THE ASSESSEE IS FURNISHING INACCURATE PARTICULARS O F THE INCOME. THE FIRST SITUATION IS WHERE THE ASSESSEE IN RESPEC T OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME FAI LS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WHICH IS FOUN D BY THE AO OR THE COMMISSIONER TO BE FALSE. THE SECOND SITUATI ON IS WHERE M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 22 THE ASSESSEE IN RESPECT OF ANY FACTS MATERIAL TO TH E COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH, T HE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE TH AT SUCH EXPLANATION WAS BONA FIDE ONE AND THAT ALL THE FACT S RELATING TO THE COMPUTATION OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESUMPTION AVAILABLE UNDER EXPLANATION TO SECT ION 271(1) (C), CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSE E FALLS UNDER EITHER OF THE CLAUSES (A) OR (B). 10. IN THE PRESENT CASES, THE AO HAS NOT BROUGHT O UT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPO SED ON THE ASSESSEE U/S 271(1) (C) OF THE ACT. HE HAS NOT BROU GHT OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PA RTICULARS OF INCOME. 11. IN SOME OF CASES, THE AO HAS NOT INITIATED THE PROCEEDINGS FOR ANY PARTICULAR CHARGE. THE PENALTY WAS INITIATE D VIDE NOTICE AS NOTED ABOVE. M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 23 12. THE AO IN SOME CASES INITIATED THE PENALTY WITH OUT ANY MENTION OF ANY PARTICULAR DEFAULT AND LEVIED THE SA ME AGAIN WITHOUT MENTIONING ANY SPECIFIC CHARGE. IN CIT V. A TUL MOHAN BINDAL (2009) 9 SCC 589, WHERE HONBLE SUPREME COUR T WAS CONSIDERING THE SAME PROVISION, IT OBSERVED THAT TH E ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCE ALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. THUS THE SATISFACTION OF THE AO ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME IS ESSENTIAL BEFORE LEVYING ANY PENALTY U/S 271(1)(C). THE AO AS IS APP ARENT FROM THE PENALTY ORDER HAS NOT SATISFIED ABOUT THE CONCE ALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. ON THIS BASIS I TSELF THE PENALTY STAND DELETED. 13. THE AO AS IS APPARENT FROM THE PENALTY ORDERS S IMPLY RELIED ON THE DECISION OF UNION OF INDIA VS DHARMENDRA TEX TILE M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 24 PROCESSORS 306 ITR 277 AS WELL AS DILIP N SHROFF V JCIT 291 ITR 519 AND TOOK THE VIEW THAT THE LEVY OF THE PENA LTY IS AUTOMATIC AND MANDATORY AND ACCORDINGLY IMPOSED THE PENALTY WITHOUT BRINGING ON RECORD WHAT DEFAULT STATED U/S 271(1) (C) WAS COMMITTED BY THE ASSESSEE. IN THE CASE OF DHARM ENDRA TEXTILES PROCESSORS (SUPRA), THE HONBLE SUPREME CO URT HAS HELD THAT PENALTY U/S 271(1) (C) IS A CIVIL LIABILI TY AND THAT WILFUL CONCEALMENT AND MEANS REA ARE NOT ESSENT IAL INGREDIENTS FOR ATTRACTING THE CIVIL LIABILITY AS I S THE CASE IN THE MATTER OF PROSECUTION U/S 276 OF THE ACT. IT HAS FU RTHER BEEN HELD IN THAT CASE THAT MENS REA IS NOT AN ESSENTIAL INGREDIENT FOR IMPOSING THE PENALTY. THE HONBLE SUPREME COURT IN THIS CASE NOWHERE HELD THAT IF THE ADDITION IS MADE, PEN ALTY IS AUTOMATIC. EVEN IN UNION OF INDIA V. DHARMENDRA TEX TILE PROCESSORS REPORTED IN (2008) 306 ITR 277 (SC), THE SUPREME COURT HAS OBSERVED THAT THE FINDING AS TO SUPPRESSI ON OR INACCURATE PARTICULARS IN THE RETURN ARE NECESSARY FOR ATTRACTING THE PENAL PROVISION UNDER SECTION 271(1) (C) OF THE INCOME TAX M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 25 ACT, 1961. THIS JUDGMENT DOES NOT OVERRULE THE EXPL ANATIONS APPENDED TO SECTION 271(1) (C). IT EVEN HELD THAT T HE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1) (C) READ WIT H EXPLANATIONS INDICATES THAT THE SAID SECTION HAS BE EN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PE NALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. THUS, THE RATI O LAID DOWN IN THIS JUDGMENT WAS CONFINED TO TREATING THE WILFUL C ONCEALMENT IS NOT ESSENTIAL FOR IMPOSING THE PENALTY U/S 271(1 ) (C) OF THE ACT. WHERE AN ASSESSEE GENUINELY MAKES A CLAIM FOR A PARTICULAR DEDUCTION BY DISCLOSING ALL THE NECESSAR Y FACTS RELATING TO THE SAME, THAT CANNOT BE REGARDED TO BE CONCEALMENT EVEN IF THE ASSESSEES CLAIM IS REJECTE D. THIS IS THE SETTLED LAW THAT PENALTY PROCEEDINGS ARE DISTINCT F ROM THE ASSESSMENT PROCEEDINGS AND, THEREFORE, IF ANY ADDIT ION IS MADE, IT DOES NOT MEAN THAT THE PENALTY WILL AUTOMATICALL Y BE LEVIED. IN THE CASE OF THE ASSESSEE, WE NOTED THAT THE ASSE SSEE DURING THE COURSE OF THE SURVEY HIMSELF SURRENDERED CERTAI N EXPENSES AND UNSECURED LOAN AS ITS INCOME ALTHOUGH THESE EXP ENSES AND M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 26 UNSECURED LOANS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS NOT A CASE WHERE THE REVENUE GO T EVIDENCE THAT THE EXPENDITURE RECORDED AND THE UNSECURED LOA NS ARE BOGUS. IN THE PENALTY PROCEEDINGS THE ASSESSEE IS G IVEN AN OPPORTUNITY TO EXPLAIN HIS CASE IF HE SUCCESSFULLY EXPLAINS HIS POSITION AND IS NOT TRAPPED WITHIN THE PARAMETERS O F SECTION 271(1) (C) ALONG WITH THE EXPLANATIONS DEEMING THE CONCEALMENT OF INCOME, PENALTY CANNOT BE IMPOSED. I N THIS CASE, THE PENALTY HAS BEEN IMPOSED MERELY OBSERVING THAT THE PENALTY IS AUTOMATIC AND MANDATORY. SECTION 271(1) (C) DEALS WITH THE TWO SITUATIONS FOR IMPOSING THE PENALTY; H AS CONCEALED THE PARTICULARS OF HIS INCOME; OR HAS FURNISHED THE INACCURATE PARTICULARS OF SUCH INCOME. EXPLANATION 1 IS APPLIC ABLE ONLY IN CASE OF FIRST SITUATION I.E. AMOUNT ADDED OR DISALL OWED IN THE TOTAL INCOME BE DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED. 14. NOW THE QUESTION ARISES WHETHER IN THIS CASE CA N ONE SAY THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 27 INACCURATE PARTICULARS MEANS THAT THE PARTICULARS ARE INCORRECT OR NOT ACCURATE OR NOT CORRECT. THAT MEAN S, THE PARTICULARS HAVE NOT BEEN FURNISHED IN CORRECT/EXAC T MANNER AS IS REQUIRED TO BE FURNISHED TO DETERMINE THE COR RECT INCOME CHARGEABLE TO TAX OF THE ASSESSEE. 15. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M. S. BINDRA & SONS P. LTD 336 ITR 125 (DELHI) HAS OBSERVED AS U NDER IN RESPECT OF DHARMENDRA TEXTILES PROCESSOR DECISION A ND DILIP N SHROFF DECISION AS RELIED BY THE A.O.:- IN FACT, SECTION 271(1) (C) CAME TO BE INTERPRETED BY THE APEX COURT IN DHARMENDRA TEXTILE PROCESSORS CASE (SUPRA). THE THREE JUDGE BENCH OF THE APEX COURT OVER-RULED THE DECISION IN DILIP N. SHROFF V. JT. CIT (2007) 291 ITR 519 (SC) AND APPROVED THE DECISION IN CHAIRMAN, SEBI V. SHRIRAM MUTUAL FUND (2006) 5 SSC 361. IN THE SAID CASE, THE SUPREME COURT HELD: - 27. THE EXPLANATION APPENDED TO SECTION 271(1) (C) OF THE INCOME-TAX ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING THE RETU RN. THE JUDGMENT IN DILIP N. SHROFFS CASE (2007) 8 SCAL E 304 (SC) HAS NOT CONSIDERED THE EFFECT AND RELEVANC E M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 28 OF SECTION 276C OF THE INCOME TAX ACT. THE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1) (C) READ WIT H THE EXPLANATIONS INDICATES THAT THE SAID SECTION HA S BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVI L LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTI ON UNDER SECTION 276C OF THE INCOME-TAX ACT. 16. THE AFORESAID DECISION HAS TAKEN NOTE OF IN CIT V. RELIANCE PETROPRODUCTS (P) LTD. (2010) 322 ITR 158 (SC). WHI LE CONSIDERING THE PHRASE CONCEALMENT OF PARTICULARS, THE APEX COURT REFERRED TO SECTION 271 AND HELD AS FOLLOWS: - 9. THEREFORE, IT IS OBVIOUS THAT IT 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, WHE RE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF V. JOINT CIT (2007) 6 SSC 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 SIGNIFI ED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSES SEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271 (1) (C) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 29 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 THR EE 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 AO MUST BE FOUND TO HAVE FAIL ED 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 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. DHARMENDRA TEXTILE PROCESSORS AFTER QUOTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTIO N 271(1) (C), THE COURT CAME TO THE CONCLUSION THAT SINCE SECTION 271(1) (C) INDICATED THE ELEMENT OF S TRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FO R GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NOT NECESSITY OF MENS REA. THE 271(1) (C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION W AS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THEREFORE, WILLF UL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN THE M ATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N SHROFF V. JOIN T CIT WAS OVERRULED BY THIS COURT IN UNION OF INDIA V . DHARMENDRA TEXTILE PROCESSORS WAS THAT ACCORDING TO M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 30 THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTIO N 271(1) (C) AND SECTION 276C OF THE ACT WAS LOST SIG HT OF IN THE CASE OF DILIP N SHROFF V. JOINT CIT. HOWE VER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS, NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHRO FF V. JOINT CIT, WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS CONCEAL AND INACCURATE. IT WAS ONLY THE ULTIMATE INFERENCEIN DILIP N. SHROFF V. JOINT CIT T O THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FO R THE PENALTY UNDER SECTION 271(1) (C) THAT THE DECIS ION IN DILIP N. SHROFF V. JOINT CIT WAS OVERRULED. 17. FROM THE PERUSAL OF THE AFORESAID DECISIONS, IT IS APPARENT THE IN NONE OF THE DECISION OF HONBLE SUPREME COUR T AS RELIED BY THE AO, IT HAS BEEN HELD THAT THE PENALTY U/S 27 1 (1) (C) IS MANDATORY OR AUTOMATIC WHEREVER THE ADDITION OR DIS ALLOWANCES ARE MADE BY THE AO. THE ASSESSING OFFICER MERELY OB SERVED THAT THE PENALTY IS MANDATORY AS HE WAS FULLY AWARE OF T HAT NO CHARGE AS SPECIFIED U/S 271 (1) (C) WAS LEVIABLE AG AINST THE ASSESSEE. ON THIS BASIS ALSO, THE PENALTY WAS WRONG LY LEVIED JUST FOR THE PURPOSE OF LEVYING THE PENALTY. WE, AC CORDINGLY CONFIRM THE ORDER OF LD. CIT(A) IN DEPARTMENTAL APP EAL AND SET M.P. STATE TOURISM AND OTHERS (ITA NO.2/IND/2015 AN D OTHERS) 31 ASIDE THE ORDERS OF LD. CIT(A) IN THE APPEALS OF TH E RESPECTIVE ASSESSEES DELETING THE PENALTY ORDERS PASSED U/S 27 1(1)(C). 18. IN THE RESULT, THE APPEAL OF THE REVENUE I.E. I TA NO.2/IND/2015 (AY 2007-08) IS DISMISSED WHEREAS APP EALS OF RESPECTIVE ASSESSEES I.E. ITA NOS.77 TO 79/IND/2014 (AYS 2003- 04, 2004-05 & 2005-06), ITA NO.229/IND/2015 (AY 200 9-10), ITA NO.21/IND/2015 (AY 2010-11), ITA NO.47/IND/2015 (AY 2006-07), ITA NO.337/IND/2014 (AY 2008-09), ITA NO.759/IND/2013 (AY 2007-08) ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 3.8.2015 . SD/- SD/- (B.C. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3.8.2015 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR !VYS! COPY TO APPELLANT/RESPONDENT/CIT/CIT(A)/DR, INDORE