DCIT, Circle - 4, Kolkata, Kolkata V. M/s. M.K.J. Developers Ltd., Kolkata

ITA 2109/KOL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9195 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 1998-1999
• Appeal Filed On: 23-11-2010
• Court: TRIBUNAL
• Department Lawyers: P KOLHE

Judgement Text

1 , C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KO LKATA [ . . . . . . . . , , , , , ,, , . .. . . .. . , , , , ! ] BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER & SRI C.D. RAO, ACCOUNTANT MEMBER ' ' ' ' / ITA NO. 2109 (KOL) OF 2010 #$% &' / ASSESSMENT YEAR 1998-99 DY.COMMISSIONER OF INCOME-TAX CIRCLE-4, KOLKATA. M/S. M.K.J. DEVELOPERS LTD. KOLKATA. (PAN-AABCM7076L) (*+ / APPELLANT ) - $ - - VERSUS -. (.*+/ RESPONDENT ) *+ / 0 / FOR THE APPELLANT: / SRI P. KOLHE .*+ / 0 / FOR THE RESPONDENT: / SRI RAVI TULSIYAN 1 / ORDER ( . .. . . .. . ), ! (C.D. RAO), ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER DATED 29/11/20109 OF LD. C.I.T.(A)-IV, KOLKATA PERTAINING TO ASSESSMENT YEAR 1998-99. 2. THE APPEAL BY THE REVENUE WAS LATE BY 43 DAYS. AT THE TIME OF HEARING BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE REQUESTED FOR C ONDONATION OF DELAY AND HE STATED THAT SRI PRIYABRATA PRAMANIK, D.C.I.T., CIRCLE-4, H AS ALREADY FURNISHED AN AFFIDAVIT DATED 22/11/2010 EXPLAINING THE REASONS FOR DELAY. THE L D. A/R OF THE ASSESSEE HAS NOT SERIOUSLY OBJECTED TO THE SAME. WE FIND THAT THE A. O. HAS EXPLAINED THE DELAY OF EACH DAY. THE HONBLE APEX COURT IN THE CASE OF COLLEC TOR, LAND ACQUISITION VS. MST. KATIJI & ORS. [167 I.T.R. 471 (SC)] HAS DIRECTED TO ADOPT A PRAGMATIC AND LIBERAL APPROACH WHILE CONSIDERING THE PETITION FOR CONDONATION OF DELAY. WE, THEREFORE, CONSIDERING THE AFFIDAVIT FILED BY THE A.O. AND RESPECTFULLY RELYIN G UPON THE ABOVE DECISION OF HONBLE APEX COURT DEEM IT PROPER TO CONDONE THE DELAY OF 4 3 DAYS IN RESPECT OF THE APPEAL BEFORE US AND ADMIT THE SAME FOR HEARING ON MERITS. 3. THE ONLY GROUND RAISED IN THIS APPEAL BY THE RE VENUE READS AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN HOLDING THAT THE PENALTY U/S 271(1)(C) OF RS.2,06,132/- IMP OSED BY THE ASSESSING OFFICER 2 BE DELETED, SINCE THE ASSESSEE FILED ALL MATERIAL E VIDENCES AND FURNISHED BONAFIDE EXPLANATION, WHILE ACTUALLY THE ASSESSEE DID NOT DI SCLOSE HIS FULL AND TRUE INCOME AND CONCEALED THE INCOME BY FURNISHING INACCURATE P ARTICULARS BEFORE THE ACTUAL INCOME WAS DETECTED BY THE A.O. WHICH HAS ALSO BEEN CONFIRMED BY THE LD. ITAT. 4. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE A SSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE, APART FROM EARNING INCOME FROM MONEY LENDING BUSINESS. DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 1996 -97, THE ASSESSEE HAD ADVANCED A LOAN OF RS. 2 CRORES TO M/S. SHAW WALLACE & CO. LTD. (SW CL) AT THE AGREED RATE OF INTEREST OF 21% PER ANNUM. IN THE BOOKS OF ACCOUNT FOR THE ASS ESSMENT YEAR UNDER APPEAL, THE ASSESSEE, HOWEVER, HAS SHOWN A SUM OF RS.39,14,946/ - @ 15% P.A. AS ITS INTEREST INCOME RECEIVABLE FROM SWCL AND THE RETURN WAS FILED ACCOR DINGLY ON 30/11/1998. THEREAFTER ON 27/4/2000, THE ASSESSEE-COMPANY RECEIVED A TDS C ERTIFICATE FROM SWCL IN RESPECT OF THE SAID LOAN SHOWING INTEREST OF RS.45,02,094/- RECEIVABLE FROM IT, WHICH WAS CALCULATED @ 21% P.A. WHILE FRAMING THE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL, THE A.O. ADDED A SUM OF RS.5,88,948/- BEING THE DIFFERENCE BETWEEN THE INTEREST SHOWN IN THE TDS CERTIFICATE AND THE INTEREST INCOM E SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. THE APPEALS FILED BY THE ASSESSEE AGAIN ST THE SAID ADDITION BEFORE THE LD. C.I.T.(A) AND THEN BEFORE THE TRIBUNAL WERE DISMISS ED. 5. THE A.O. INITIATED PENALTY PROCEEDING U/S. 271( 1)(C) OF THE ACT. THE ASSESSEE EXPLAINED BEFORE THE A.O. THAT IN VIEW OF A PROPOSA L MADE AT THE CREDITORS MEETING HELD ON 16/3/1998 AND 07/4/1998, THE ASSESSEE DISCLOSED INTEREST ON LOAN TO SWCL @ 15% INSTEAD OF 21% AS PER MUTUAL AGREEMENT BETWEEN THE BORROWER AND THE ASSESSEE. THAT FACED WITH VARIOUS FINANCIAL DIFFICULTIES, THE BORR OWER I.E. SWCL PROPOSED A SCHEME OF COMPROMISE AND AN ARRANGEMENT FOR REPAYMENT OF LOAN WAS REACHED ACCORDING TO THAT SCHEME. IT WAS ALSO STATED THAT INTEREST RATE AS A PPLICABLE AT THAT TIME WOULD BE EXTENDED UPTO AND INCLUDING 31/3/1997 AND FURTHER W .E.F. 01/4/1997, INTEREST RATE @ 15% P.A. WOULD BE PAID UPTO THE DATE OF REPAYMENT O N THE DIMINISHING BALANCE. IT WAS ALSO STATED THAT THE SAID SCHEME WAS APPROVED BY TH E HONBLE CALCUTTA HIGH COURT VIDE ITS JUDGMENT DATED 24/12/1998. THE ASSESSEE FURTHE R STATED THAT THERE WAS NO CONCEALMENT OF INCOME OR DISHONEST AND CONTUMACIOUS CONDUCT ON THE PART OF THE 3 ASSESSEE. THE A.O., HOWEVER, OBSERVED THAT THE ORD ER OF HONBLE HIGH COURT DATED 24/12/1998 WAS SUBSEQUENT TO THE END OF THE RELEVAN T PREVIOUS YEAR AND THE ASSESSEE WAS NOT A PARTY TO THE PETITION. ACCORDING TO HIM FURTHER, SWCL HAD PROVIDED INTEREST @ 21% P.A. IN ITS BOOKS OF ACCOUNT AND TDS CERTIFIC ATE WAS ISSUED INDICATING THE CREDIT OF INTEREST OF RS.45,02,094/-. IN VIEW OF THE ABOV E, THE A.O. INFERRED THAT THE ASSESSEE DELIBERATELY DID NOT DISCLOSE IN THE RETURN OF INCO ME THE INTEREST INCOME RECEIVABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND THUS IT WAS AN ATTEMPT TO MINIMIZE ITS TAX INCIDENCE. HE, THEREFORE, IMPOSED A PENALTY OF RS. 2,06,132/- U/S. 271(1)(C) OF THE ACT. 6. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. C.I.T.(A). THE LD. C.I.T.(A) AFTER CAREFULLY CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE, PERUSING THE EVIDENCES PRODUCED BEFORE HIM AND RELYING ON SOME J UDICIAL PRONOUNCEMENTS DELETED THE PENALTY IMPOSED U/S. 271(1)(C) OF THE ACT BY OBSERV ING AS UNDER :- 8.1. ON CAREFULLY GOING THROUGH THE CASE, I CONCLU DE THAT SECTION 271(1)(C) APPLIES WHERE THE ASSESSEE HAS CONCEALED THE PARTI CULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. T HE PRESENT WAS NOT A CASE OF CONCEALMENT OF THE INCOME. AS REGARDS THE FURNISHI NG OF INACCURATE PARTICULARS, NO INFORMATION GIVEN IN THE RETURN AND/OR SUBSEQUEN T FILING OF TDS CERTIFICATE WITH THE A.O., WERE FOUND TO BE INCORRECT OR INACCU RATE . THE WORDS INACCURATE PARTICULARS MEAN THAT THE DETAILS SUPPLIED IN THE RETURN AND/OR DOCUMENTS FILED AT THE ASSESSMENT STAGE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE ABSENCE OF A FINDING BY THE AO THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCO RRECT OR ERRONEOUS OR FALSE, THERE WOULD BE NO QUESTION OF INVITING PENALTY U/S 271(1)(C). 8.2 IN HIS PENALTY ORDER, THE A.O. STATED THAT IT CAN BE CONCLUDED THAT THE ASSESSEE WAS WELL AWARE ABOUT ITS INTEREST INCOME W HICH, IT DELIBERATELY DID NOT DISCLOSE IN THE RETURN OF INCOME AND THEREBY TRIED TO MINIMIZE ITS TAX INCIDENCE. ON PERUSAL OF THE CASE AND ALL THE PAPERS/DOCUMENTS FILED BY THE APPELLANT, THE FINDINGS OF THE A.O. SEEMS TO BE A HASTE FINDING WI THOUT CONSIDERING THE MATERIALS AVAILABLE BEFORE HIM FOR CONSIDERATION. IT IS VERY MUCH CLEAR ON THE FACE OF TDS CERTIFICATE ISSUED BY THE SAID M/S. SWCL THAT IT WA S ISSUED ON 26-042004 MUCH AFTER THE FILING OF RETURN OF INCOME ON 30-11-1998, HENCE CONTENTION OF THE A.O. TREATING THE CASE AS CONCEALMENT OF INCOME IS NOT J USTIFIED. 8.3 FURTHER, SUBMITTING AN INCORRECT CLAIM FOR EX PENDITURE WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME IS NOT CORRECT. BY NO STRETCH OF IMAGINATION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, 4 BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. IF THE CONTENTION OF THE REVENUE I S ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED B Y THE AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/S 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 8.4 I HAVE CAREFULLY CONSIDERED THE JUDICIAL DEC ISIONS IN THE CASE OF DHARMENDRA TEXTILES REPORTED IN 306 ITR 277 (SC) AND CASE OF D ILIP N. SHROFF REPORTED IN 291 ITR 519 (SC) AND CAME TO THE CONCLUSION THAT TH E LAW LAID DOWN IN DILIP SHROFF 291 ITR 519(SC) AS TO THE MEANINGS OF THE WO RDS CONCEAL AND INACCURATE CONTINUES TO BE GOOD LAW BECAUSE WHAT WAS OVERRULED IN DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 (SC) WAS ONLY THAT PART IN D ILIP SHROFF WHERE IT WAS HELD THAT MENS REA WAS AN ESSENTIAL REQUIREMENT FOR PENA LTY. 8.5 IN MY OPINION, MENS REA IS NOT A DECISIVE EL EMENT AT ALL, TO ATTAIN THE FINALITY IN THIS INSTANT CASE. WHERE THE APPELLANT FILED AND /OR BROUGHT TO THE NOTICE OF THE REVENUE, ALL MATERIAL EVIDENCES, FURNISHED BONA FIDE EXPLANATIONS AT ITS OWN, SO THIS CASE HAS NOTHING TO DO WITH THE ELEMENT OF MEN S REA. 8.6. THUS ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE ALSO LEGAL POSITION DISCUSSED AS ABOVE, IT IS HELD THAT THE PENALTY IMP OSED BY THE A.O. U/S. 271 (1)(C) IS DELETED. HENCE THIS APPEAL BY THE DEPARTMENT. 7. AT THE TIME OF HEARING BEFORE US, THE LD. DEPAR TMENTAL REPRESENTATIVE RELIED ON THE ORDER OF A.O. HE FURTHER SUBMITTED THAT SWCL H AD PROVIDED INTEREST @ 21% P.A. IN ITS BOOKS OF ACCOUNT AND ISSUED TDS CERTIFICATE ACC ORDINGLY. FURTHER, AS AT THE END OF THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THERE WAS NEITHER SUCH ORDER OF THE HIGH COURT, NOR ANY MODIFICATION IN TH E ORIGINAL AGREEMENT CHARGING INTEREST AT 21%. THEREFORE, THE ASSESSEE WILLFULLY TO EVADE TAX HAD SUPPRESSED THE INTEREST RECEIVABLE BY IT FROM SWCL AND THE A.O. HAS JUSTIFI ABLY LEVIED PENALTY FOR SUCH CONCEALMENT OF INCOME U/S. 271(1)(C) OF THE ACT. H E, THEREFORE, SUBMITTED THAT THE ORDER OF LD. C.I.T.(A) DELETING THE PENALTY SHOULD BE QUASHED AND THAT OF A.O. BE RESTORED. 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUPPORTED THE ORDER OF LD. C.I.T.(A). HE FURTHER SUBMITTED THAT THE BORROWER SWCL WAS IN A FINANCIAL CRISIS. THAT FOR NON-PAYMENT OF DUES, A FEW OF THE CREDITORS OF SWCL GOT DECREE AGAINST IT FROM THE 5 COURT. THAT SOME OF THE CREDITORS FILED PETITIONS BEFORE THE COURT FOR ITS WINDING UP. THAT FACED WITH THESE PROBLEMS, SWCL SUBMITTED A SC HEME OF COMPROMISE AND/OR ARRANGEMENT BEFORE ITS CREDITORS IN TWO MEETINGS HE LD ON 16/3/1998 AND 7/4/1998 WHERE IT WAS PROPOSED BY THE SAID COMPANY THAT INTE REST WOULD BE PAID AT THE CONTRACTUALLY AGREED RATES TILL 31/3/1997 AND W.E.F . 1/4/1997 SIMPLE INTEREST @ 15% PER ANNUM TILL THE DATE OF REPAYMENT ON THE DIMINISHING BALANCE. THE LD. COUNSEL FILED A COPY OF COMPANY APPLICATION NO. 755 OF 1997 ALONG WITH C OPY OF JUDGMENT DATED 24/12/1998 OF HONBLE CALCUTTA HIGH COURT ON THE SAID APPLICAT ION AND SUBMITTED THAT SUBSEQUENTLY THIS SCHEME OF REPAYMENT OF INTEREST AND LOAN WAS A PPROVED BY THE HONBLE HIGH COURT BY ITS ORDER DATED 24/12/1998. HE, THEREFORE, SUBM ITTED THAT THE ASSESSEE WAS UNDER A BONA FIDE BELIEF/IMPRESSION THAT INTEREST ORIGINALL Y AGREED UPON @ 21% P.A. WAS NOT RECOVERABLE AND THE INTEREST ACTUALLY RECEIVABLE WO ULD BE @ 15% P.A., KEEPING IN VIEW THE SCHEME DULY RATIFIED BY THE HONBLE HIGH COURT. I N REGARD TO THE ALLEGATION OF THE A.O. THAT THE ASSESSEE WAS NOT A PETITIONER TO THE HIGH COURT, THE LEARNED COUNSEL SUBMITTED THAT THE SCHEME APPROVED BY THE HONBLE HIGH COURT WAS APPLICABLE TO THE CLASS OF CREDITORS AND THE ASSESSEE BEING ONE OF THE CREDITO RS TO SWCL, THE DECISION OF HONBLE HIGH COURT WAS ALSO APPLICABLE TO THE ASSESSEE NOTW ITHSTANDING THE FACT THAT THE ASSESSEE WAS NOT A PARTY TO THE PETITION. HE, THER EFORE, SUBMITTED THAT THERE WAS NO DELIBERATE OR CONSCIOUS CONCEALMENT OF INTEREST INC OME, AS ALLEGED BY THE A.O. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. C.I .T.(A) HAS APPRECIATED THE MATTER IN PROPER PERSPECTIVE AND HENCE HIS ORDER DELETING THE PENALTY U/S. 271(1)(C) OF THE ACT SHOULD BE SUSTAINED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PART IES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE EVIDENCES PLACED ON RECOR D. THE UNDISPUTED FACTS, AS WE OBSERVE, ARE THAT DURING THE FINANCIAL YEAR RELEVAN T TO ASSESSMENT YEAR 1996-97, THE ASSESSEE HAD ADVANCED RS. 2 CRORES TO SWCL AT AGREE D RATE OF INTEREST AT 21% P.A. THE BORROWER-COMPANY SWCL WAS RUNNING INTO FINANCIAL CR ISIS AND FOR NON-PAYMENT OF DUES, SOME OF THE CREDITORS APPROACHED THE HONBLE HIGH C OURT FOR REDRESSAL. SWCL THEREAFTER SUBMITTED A SCHEME OF COMPROMISE/AGREEME NT BEFORE ITS CREDITORS IN 6 MEETINGS HELD ON 16/3/1998 & 7/4/1998 AND ACCORDING TO THE COMPROMISE ARRIVED AT IN THOSE MEETINGS, SWCL AGREED TO PAY INTEREST @ 15% W .E.F. 1/4/1997 P.A. TILL THE DATE OF REPAYMENT ON THE DIMINISHING BALANCE. THIS COMPROM ISE AGREEMENT WAS DULY RATIFIED BY THE HONBLE HIGH COURT VIDE ORDER DATED 24/12/1998. IT IS FACT THAT THE ASSESSEE WAS NOT A PARTY TO THE PETITION FILED BEFORE THE HONBL E HIGH COURT. BUT IT IS ALSO FACT THAT THE ASSESSEE HAD ADVANCED RS. 2 CRORES TO SWCL. TH E COMPROMISE SCHEME/AGREEMENT PROPOSED BY SWCL AND DULY RATIFIED BY THE HONBLE H IGH COURT VIDE JUDGMENT DATED 24/12/1998, IN OUR OPINION, IS ALSO APPLICABLE TO A LL THE CLASS OF CREDITORS TO SWCL, WHETHER THEY WERE PETITIONERS BEFORE THE HONBLE HI GH COURT OR NOT. IT IS ALSO EVIDENT FROM THE COPY OF JUDGMENT OF HONBLE HIGH COURT PLA CED BEFORE US THAT REPRESENTATION BEFORE THE HONBLE COURT WAS MADE ON BEHALF OF THE PETITIONER AS ALSO FOR THE ASSESSEE AND OTHER PARTIES. IN THAT VIEW OF THE MATTER, IN OUR CONSIDERED OPINION, WE FIND NO MALA FIDE INTENTION ON THE PART OF THE ASSESSEE TO BELIE VE THAT THE SAID SCHEME/ARRANGEMENT DULY RATIFIED BY THE HONBLE HIGH COURT IS ALSO APP LICABLE TO IT AND IT WAS UNDER THIS BONA FIDE BELIEF THAT THE ASSESSEE HAD DECLARED INTEREST RECEIVABLE FROM SWCL AT THE RATE OF 15% P.A. INSTEAD OF 21% AGREED UPON EARLIER. WE FUR THER OBSERVE THAT TDS CERTIFICATE WAS ISSUED BY SWCL CHARGING INTEREST AT 21% ON 27/4 /2000, WHICH WAS MUCH AFTER THE DATE OF FILING OF THE RETURN OF INCOME FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION ON 30/11/1998. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE EVEN AFTER GETTING THE TDS CERTIFICATE AGAINST INTEREST HAS INTENTIONALLY AND CONSCIOUSLY GIVEN WRONG FIGURES IN ITS RETURN OF INCOME, RESULTING IN CONCEALMENT OF INTER EST INCOME. FURTHER, WE FIND SUBSTANTIAL FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE ACTING UPON THE COMPROMISE SCHEME PRESENTE D BY SWCL BEFORE ITS CREDITORS ON 16/3/1998 & 7/4/1998 HAD BONAFIDELY BELIEVED THAT INTEREST ULTIMATELY RECEIVABLE FROM THE BORROWER DURING THE ASSESSMENT YEAR UNDER CONSI DERATION WOULD BE @ 15% ONLY AND NOT 21% P.A. AS ORIGINALLY AGREED UPON WHILE ADVANC ING LOAN. FURTHER, IN OUR CONSIDERED OPINION, IF THE ASSESSEE MADE CERTAIN CLAIM ON THE BASIS OF CERTAIN BELIEF BASING ON THE COMPROMISE SCHEME DULY RATIFIED BY THE HIGH COURT, IT WILL NOT BE CONSIDERED AS EITHER CONCEALING OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS THEREOF SO AS TO ATTRACT 7 PENALTY U/S.271(1)(C) OF THE ACT. THE REVENUE HAS NOT POINTED OUT THAT ASSESSEE CONCEALED ANY FACT OR FURNISHED ANY INACCURATE FACT S. MERELY BECAUSE THE CLAIM OF THE ASSESSEE HAS NOT BEEN ALLOWED IN APPEAL, IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS BY C LAIMING INTEREST INCOME AT LESSER FIGURE IN RESPECT OF LOAN ADVANCED TO SWCL. IT IS P ERTINENT TO MENTION HERE THAT THE COMPUTATION ARRIVED AT BY THE A.O. IN THE QUANTUM A SSESSMENT ORDER WAS BASED ON THE DATA AND INFORMATION SUPPLIED BY THE ASSESSEE OR FU RNISHED ALONG WITH THE RETURN OF INCOME. FROM THIS POINT OF VIEW ALSO, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ITS INCOME OR FILED INACCURATE PARTICULARS. IN ADD ITION TO THIS, THE A.O. HAS NO OTHER MATERIAL TO CONSIDER THAT THE ASSESSEE HAS FILED IN ACCURATE PARTICULARS AND CONCEALED THE INCOME SO AS TO JUSTIFY THAT THE ASSESSEE IS LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT. 9.1. IN THIS CONNECTION, WE MAY REFER TO THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF CEMENT MARKETING CO. OF INDIA LTD. VS. ASST . CST [124 ITR 15 (SC)] AND THE RELEVANT PORTION OF THE FINDING OF THEIR LORDSHIPS ARE AS UNDER :- ..BUT WHERE THE ASSESSEE DOES NOT INCLUDE A PARTI CULAR 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 RETURN AS, A FALSE RETURN INVITING IMPOSITION OF PENALTY. THIS VIEW WHICH IS BEING TAKEN BY US IS SUPPORTED B Y THE DECISION OF THIS COURT IN HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC), WHERE IT HAS BEEN HELD : EVEN IF A MINIMUM PENALTY IS PRESCRIBED, TH E AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LI ABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE . IT IS ELEMENTARY TH AT S. 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT, 1958, PROVIDING FOR IMPOSITION OF PENALTY IS PENAL IN CHARACTER AND UNLESS THE FILING OF AN INACCURATE RETURN IS ACCOMPANIED BY A GUILTY MIND, THE SECTION CANNOT BE INVOKED FOR IMPO SING PENALTY. IF THE VIEW CANVASSED ON BEHALF OF THE REVENUE WERE ACCEPTED, T HE RESULT WOULD BE THAT EVEN IF THE ASSESSEE 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 FO UND BY THE COURT TO BE NOT ACCEPTABLE. THAT SURELY COULD NEVER HAVE BEEN INTEN DED BY THE LEGISLATURE. WE ARE, THEREFORE, OF THE VIEW THAT THE ASSESSEE CO ULD 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 ASST. CST WAS NOT JUSTIFIED IN IMPOSING 8 PENALTY ON THE ASSESSEE UNDER S. 43 OF THE MADHYA P RADESH GENERAL SALES TAX ACT, 1958, AND S. 9 SUB-S. (2) OF THE CENTRAL SALES TAX ACT, 1956. 9.2. CONSIDERING THE TOTALITY OF THE FACTS AND CI RCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE RATIO OF AFORESAID DECIS ION OF HONBLE SUPREME COURT, WE ARE OF THE CONSIDERED OPINION THAT THE A.O. COULD NOT M AKE OUT ANY CASE TO JUSTIFY THAT THE PENALTY IS LEVIABLE U/S. 271(1)(C) OF THE ACT. ON THE OTHER HAND, THE LD. C.I.T.(A) HAS RIGHTLY DELETED THE PENALTY IMPOSED ON THE ASSESSEE KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAS NEITHER CONCEALED THE INCOME NOR FURNI SHED INACCURATE PARTICULARS THEREOF. WE, THEREFORE, CONFIRM HIS ORDER DELETING THE PENAL TY OF RS.2,06,132/- LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. 2 1 !3 4 3$ 25 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 29.3.11. SD/- SD/- ( . . . . . . . . ) ( . .. . . .. . ) ! (D.K. TYAGI) , JUDICIAL MEMBER (C.D.RAO) , ACCOUNTANT MEMBER ORDER PRONOUNCED IN THE COURT ON 29.3.11. SD/- SD/- AM(CDR) JM (MS) ( (( (! ! ! !) )) ) DATE: 29 -03-2011 1 / .##6 76&8- COPY OF THE ORDER FORWARDED TO: 1. *+ / THE APPELLANT : D.C.I.T., CIRCLE-4, KOLKATA. 2 .*+ / THE RESPONDENT : M/S. M.K.J.DEVELOPERS LTD., 2, CLI VE GHAT STREET, KOL-1. 3. #1$ () : THE CIT(A)-IV, KOLKATA. 4. #1$/ THE CIT, KOL- 5 . <# .#$ / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . 6 .#/ TRUE COPY, 1$3/ BY ORDER, (DKP) = > / DY/ASST. REGISTRAR .