The ITO,Vapi Ward-4, Nani Daman V. Shri Lalubhai Babubhai Patel, Nani Daman

ITA 228/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76844 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 05-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 24-01-2013
• Court: TRIBUNAL
• Department Lawyers: RAJNISH K VORA
• Keywords: Onus to prove; Bonafide mistake

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !'# !$ !'# !$ !'# !$ !'# !$0 00 0! !! !0 00 0 %$ %$ %$ %$, , , , &' ( &' ( &' ( &' ( & & & & BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 228/AHD/2013 ASSESSMENT YEAR 2009-10 INCOME TAX OFFICER VAPI WARD-4, DAMAN. VS SHRI LALUBHAI BABUBHAI PATEL H. NO. 204/4, KACHIGAM CHAR RASTA, KACHIGAM, NANI DAMAN. PAN: ABRPP3684M )*/ APPELLANT ,-)* / RESPONDENT REVENUE BY : SHRI RAJNISH K. VORA, SR. DR ASSESSEE(S) BY : SHRI HARDIK VORA, AR $'. / 0'/ // / DATE OF HEARING : 05/06/2014 123 / 0' / DATE OF PRONOUNCEMENT : 20/06/2014 &4 &4 &4 &4/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX, VALSAD DATED 24.10.2012 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX ERRED IN LAW IN DELETING THE PENALTY U/S. 271(1)(C) OF THE ACT MADE ON ACCOUNT OF QUANTUM ADD ITION AS THE ASSESSEE HAS NOT OFFERED INCOME RECEIVED AS CONFIRMING PARTY ON THE SALE OF LAND. ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 2 - 3. WE HEAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . IN THE INSTANT CASE, THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) OF THE ACT ON RS 32,70,000/- BEING THE AMOUNT RECEIVED BY THE ASSESSEE FROM M/S KANDOI FABRICS PRIVATE LIMITED AND RS 16,80,000/- FROM KANDOI POLYTEX PRIV ATE LIMITED FOR ACTING AS A CONFIRMATORY PARTY IN THE TRANSACTION OF SALE O F LAND AS THE ASSESSEE HAD NOT OFFERED THE SAME TO TAX IN THE RETURN OF INCOME . HOWEVER, WHEN THE SAID OMISSION WAS POINTED OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE AGREED TO PAY TAX THEREON AND EXPLAINE D THAT THE OMISSION WAS NOT DELIBERATE BUT WAS ON ACCOUNT OF BONAFIDE MISTA KE ON PART OF THE ACCOUNTANT. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) DELETED THE PENALTY BY OBSERVING AS UNDER: DECISION: - I HAVE CAREFULLY CONSIDERED THE REASONS ENUMERATED BY AO FOR LEVYING PENALTY IN THE IMPUGNE D PENALTY ORDER AS WELL AS THE EXHAUSTIVE SUBMISSIONS MADE BY THE LD. AR. THE BRIEF POINTS FOR LEVYING PENALTY BY THE AO WAS THAT THE APPELLANT DID NOT DISCLOSE THE AMOUNT OF RS.49,50,0 00/- RECEIVED AS CONFIRMATORY PARTY FROM M/S. KANDOI FABRICS PVT. LTD AND M/S. KANDOI POLYTEX OUT OF A LAND SALE BY THIRD PARTIES. FURTHER, THE AO OBSERVED THAT OUT OF LIQUOR SALES AND PURCHASES THE APPELLANT MADE PROFIT OF RS.1,10,266/- WHICH WAS NOT INCLUDED IN THE R/I FILED BY THE APPELLANT. THEREFORE, THE AO LEVIED TH E PENALTY BY INVOKING SEC.271(1)(C) OF THE ACT. ON THE OTHER HAN D, THE APPELLANT CONTENDED THAT THE OMISSION WAS A BONAFID E ONE DUE TO THE NEGLIGENCE OF THE ACCOUNTANT WHO LOOKS AFTER TH E AFFAIRS OF THE APPELLANT. IT WAS ADMITTED THAT, IN THE COURSE OF ASSESSMENT PROCEEDING WHEN THE MATTER WAS BROUGHT TO THE NOTIC E THE APPELLANT PROMPTLY ACCEPTED THE ADDITIONS WITH A RE QUEST TO GRANT LEAVE FROM PENALTY. THE APPELLANT ALSO STATED THAT THE TAX AROUSED DUE TO THE ADDITION MADE WERE PAID TO THE D EPARTMENT AND NO APPEAL WAS PREFERRED BEFORE THE LD. CIT(A). THIS CLEARLY SHOWS THAT THE APPELLANT HAD DISCLOSED ALL MATERIAL FACTS DURING THE ASSESSMENT PROCEEDING AND EXHIBITED BONAFIDE CO NDUCT. IT WAS ALSO CONTENDED THAT THE APPELLANT IS A PUBLIC F IGURE AND ENTRUSTED THE ACCOUNTANT TO FURNISH NECESSARY DETAI LS TO THE CONCERNED AUTHORITY AS AND WHEN REQUIRED. THEREFORE , THE OMISSION WAS BONAFIDE AND SHOULD NOT ATTRACT PENAL PROVISIONS ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 3 - PLEADED BY THE APPELLANT. NEEDLESS TO MENTION HERE THAT THE APPELLANT HAS ALSO RELIED UPON VARIOUS JUDGEMENTS T O BUTTRESS HIS CAUSE WHICH WILL BE DISCUSSED IN THE LATER PARAS OF THIS ORDER. I HAVE CAREFULLY EXAMINED THE FACTS AND CIRCUMSTANCES OF THE CASE. IN THE BACKGROUND STATED ABOVE THE RELEVANT QUESTIO N WHICH CALLS FOR AN ANSWER IS WHETHER SUCH ACT OF THE APPELLANT AMOUNTS TO 'FURNISHING INACCURATE PARTICULARS OF INCOME' AND/O R 'CONCEALMENT OF INCOME' AS ENVISAGED IN THE PROVISI ONS U/S. 271(1)(C) OF THE ACT? 4.3.1 A PLAIN READING OF THE PROVISION OF LAW MAK ES IT CLEAR THAT SO FAR AS THE SCHEME OF PENALTY FOR CONCEALMENT OF INCOME IS CONCERNED, IT IS 'SINE QUA NON' FOR IMPOSITION OF P ENALTY THAT THE ASSESSING OFFICER, DURING THE COURSE OF ANY PROCEED INGS, SHOULD BE SATISFIED THAT THE ASSESSEE HAS (I) CONCEALED HI S INCOME, OR (II) FURNISHED INACCURATE PARTICULARS OF INCOME. A S REGARDS THE QUANTUM OF PENALTY, THE PENALTY IMPOSED UNDER SECTI ON 271(1)(C) CAN RANGE BETWEEN LO O% TO 300% OF THE TA X SOUGHT TO BE AVOIDED BY THE ASSESSEE, AS A RESULT OF SUCH CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE THIRD AND MOST IMPORTANT FEATURE OF THIS PROVISION IS DEEMING PROVISION REGARDING CONCEALMENT OF INCOME. THIS DEEMING FICTI ON, BY WAY OF EXPLANATION 1 TO SECTION 271(1)(C) ENVISAGES TWO SITUATIONS (A) FIRST, WHERE IN RESPECT OF ANY FACTS MATERIAL T O THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT; THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLA NATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSI NG OFFICER AND, (B) SECOND, WHERE IN RESPECT OF ANY FACTS MATE RIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THIS ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATIO N AND THE ASSESSEE FAILS TO PROVE THAT SUCH EXPLANATION IS BO NAFIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELAT ING TO THE SAME AND MATERIAL TO THE COMPUTATION OF TOTAL INCOME. IN THE FIRST SITUATION, THE DEEMING FICTION IS TRIGGERED BY THE INACTION OF THE ASSESSEE BY HIS NOT GIVING THE EXPLANATION WITH RES PECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME, O R BY ACTION OF THE ASSESSING OFFICER BY GIVING CATEGORICAL FINDING TO THE EFFECT THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS FALSE . IN THE SECOND SITUATION, THE DEEMING FICTION IS TRIGGERED BY THE FAILURE OF THE ASSESSEE LEADING TO SATISFACTION OF CONDITIO NS LAID DOWN IN CLAUSE B OF EXPLANATION 1 TO SECTION 271(1)(C) , NAMELY THAT THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AN EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOM E, AND, IN ADDITION TO THIS, THE ASSESSEE IS ALSO NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONAFIDE AND ALL THE FACTS RE LATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF TOTAL INCOM E HAVE BEEN ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 4 - DISCLOSED BY THE ASSESSEE. IT IS THUS NOT DIFFICULT TO DISCERN THAT, EVEN ON THE FIRST PRINCIPLES, A PENALTY UNDER SECTI ON 271(1)(C) IS NOT SIMPLY A CONSEQUENCE OF AN ADDITION BEING MADE TO THE INCOME OF THE ASSESSEE. THE PENALTY UNDER SECTION 2 71(1)(C) IS A PENALTY FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS, OR, UNDER THE EXTENDED DEFINITION BY T HE VIRTUE OF EXPLANATION 1 TO SECTION 271(1)(C), FOR A DEEMED CO NCEALMENT OF INCOME. AS A COROLLARY TO THIS LEGAL POSITION, UNLE SS IT IS ESTABLISHED THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OR IT IS ESTABLISHED THAT, O N THE FACTS OF THE CASE, CONCEALMENT OF INCOME CAN BE DEEMED IN ACCORD ANCE WITH THE PROVISIONS OF LAW, THE PENALTY PROVISIONS BE RE VOKED AT ALL. 4.3.2 THE FIRST SIGNIFICANT RECENT DEVELOPMENT THA T THE HON'BLE SUPREME COURT'S JUDGMENT IN THE CASE OF DILIP N SHR OFF VS JOINT COMMISSIONER OF INCOME TAX [2007] 291 ITR 519 (SC) THAT PENALTY PROCEEDINGS ARE QUASI-CRIMINAL PROCEEDINGS IN NATURE AND, THEREFORE, BURDEN OF PROOF THAT THE ASSESSEE H AS CONCEALED INCOME IS ON REVENUE AUTHORITIES, AS ALSO FOR THE P ROPOSITION THAT AN ELEMENT OF MENS REA IS NEEDED BEFORE PENALTY UND ER SECTION 271(1)(C) CAN BE IMPOSED. THIS JUDGMENT WAS ALSO VI EWED AS AN AUTHORITY FOR THE PROPOSITION, THAT PENALTIES NOT O NLY UNDER INCOME TAX ACT BUT ALSO UNDER LEGISLATIONS LIKE CEN TRAL EXCISE ACT CAN ONLY BE IMPOSED WHEN MENS REA OF THE ASSESSEE I S ESTABLISHED. IT WAS IN THIS BACKGROUND THAT ANOTHER DIVISION BENCH OF HON'BLE SUPREME COURT EXPRESSED DOUBTS ABO UT CORRECTNESS OF THIS PART OF THE JUDGMENT. 4.3.3 LET ME NOW QUICKLY SUMMARIZE WHAT HON'BLE S UPREME COURT HAS HELD IN THE CASE OF DHARMENDRA TEXTILE PR OCESSORS (SUPRA) BEFORE IT IS ANALYZED SO AS TO IT'S APPLICA TION RELATING TO IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) POST DHARMENDRA TEXTILE PROCESSOR DECISION. THE OBSERVATIONS OF THE HON'BLE SUPREME COURT, WHICH ARE RELEVANT FOR THIS PURPOSE, ARE AS FOLLOWS: 'THE EXPLANATIONS APPENDED TO SECTION 271(1)(C) OF THE IT ACT ENTIRELY INDICATES THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULAR S WHILE FILING RETURN. OBJECT BEHIND ENACTMENT OF SECTION 271(1)(C ) READ WITH EXPLANATIONS INDICATE THAT THE SAID SECTION HAS BEE N ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENAL TY UNDER THAT PROVISION IS A CIVIL LIABILITY. WITH FULL CONCEALME NT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276C OF THE I.T. ACT. IT IS OF SIGNIFICANCE TO NOTE THAT THE CONCEPTUAL AND CONTEXTUAL ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 5 - DIFFERENCE BETWEEN SECTION 271(1) (C) AND SECTION 2 76C OF THE IT ACT WAS LOST SIGHT OF IN DILIP SHROFFS CASE (SU PRA). MENS REA IS NOT ESSENTIAL ELEMENT FOR IMPOSING PENALTY FOR BREA CH OF CIVIL OBLIGATIONS OR LIABILITIES. THERE CAN BE TWO DISTIN CT LIABILITIES, CIVIL AND CRIMINAL UNDER THE SAME ACT'. 4.3.4 IT IS ALSO WELL SETTLED IN LAW THAT PENALTY PROCEEDINGS ARE DISTINCT' FROM THE ASSESSMENT PROCEEDINGS AND BASED ON THE FINDINGS IN THE ASSESSMENT ORDER PER SE, PENALTY CA NNOT BE IMPOSED. IT IS, THEREFORE, WHOLLY UNJUSTIFIED TO IN TERPRET 'CIVIL LIABILITY' OF PENALTY UNDER SECTION 271(1)(C) SHOUL D BE CONSTRUED TO MEAN THAT A PENALTY IS AN AUTOMATIC CONSEQUENCE OF AN ADDITION BEING MADE TO THE INCOME OF THE ASSESSEE. A PENALTY UNDER SECTION 271(1)(C) THE INCOME TAX ACT, IRRESPE CTIVE OF WHETHER IT IS A CIVIL LIABILITY OR A CRIMINAL LIABI LITY, CAN ONLY BE IMPOSED WHEN SCHEME OF THE ACT PERMITS OR REQUIRES SO; NOT ONLY THAT IT IS NOT AN AUTOMATIC CONSEQUENCE OF AN ADDITION BEING MADE TO THE INCOME, BUT AN ADDITION MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BY ITSELF, CANNOT BE ENOUGH TO INITIATE, LEAVE ASIDE CONCLUDE, PENALTY PROCEEDINGS UNDER SEC TION 271(1) (C). THEREFORE, A FINDING RECORDED IN THE ASSESSMEN T ORDER MAY CONSTITUTE GOOD EVIDENCE IN THE PENALTY PROCEEDINGS BUT THOSE FINDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE P URPOSES OF PENALTY PROCEEDINGS. 4.3.5 IN DHARMENDRA TEXTILE PROCESSORS' CASE (SUP RA), THEIR LORDSHIPS HAVE HELD THAT PENALTY UNDER SECTION 271( 1) (C) PROVIDES REMEDY FOR LOSS OF REVENUE. A PENALTY UNDE R SECTION 271(1)(C) INVOLVES PAYMENT OF AN ADDITIONAL AMOUNT, WHICH IS A CIVIL LIABILITY TO PROVIDE FOR REMEDY FOR LOSS OF R EVENUE, WHILE A SENTENCE OF IMPRISONMENT UNDER SECTION 276C MEANS L OSS OF INDIVIDUAL LIBERTY WHICH DOES NOT HELP REVENUE IN A NYWAY EXCEPT AS SERVING AS A DETERRENT FOR THE POTENTIAL DEFAULT ERS. THEREFORE, AS HELD BY THE HON'BLE SUPREME COURT, A PENALTY UND ER SECTION 271(1)(C) INDEED PROVIDES A REMEDY FOR LOSS OF REVE NUE, BUT THEN, AS THE SCHEME OF SECTION 271(1)(C) ITSELF UNA MBIGUOUSLY SHOWS, A PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED FOR CASE OF ADDITION TO INCOME. SECTION 271(1)(C) ENVIS AGES CERTAIN SITUATIONS IN WHICH PENALTY UNDER SECTION 271(1)(C) CAN BE IMPOSED AND UNLESS THOSE CONDITIONS ARE SATISFIED, THE PENALTY CANNOT BE IMPOSED MERELY BECAUSE THERE WAS A LOSS O F REVENUE. THE NATURE OF THE PENALTY BEING TO PROVIDE FOR LOSS OF REVENUE IS THUS NOT IN DOUBT, BUT THAT CHARACTERISTIC OF PENAL TY UNDER SECTION 271(1)(C) IS TO BE READ IN CONJUNCTION WITH THE SCHEME OF THE SECTION 271(1)(C) ITSELF. IT IS ALSO BE BORNE I N MIND THAT, AS NOTED BY HON'BLE SUPREME COURT IN THE CASE OF OM PR AKASH SHEO ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 6 - PRAKASH (SUPRA), THERE IS NO CONTRADICTION BETWEEN A LIABILITY BEING CIVIL IN NATURE AND YET PENAL IN CHARACTER. W ITH MENS REA OR WITHOUT MENS REA, A PENALTY CAN ONLY BE IMPOSED WHE N THERE IS FAILURE, OR DEEMED FAILURE, TO DISCHARGE AN OBLIGAT ION. THEREFORE, HON'BLE SUPREME COURT'S OBSERVATIONS TO THE EFFECT THAT AS PENALTY IS TO PROVIDE REMEDY FOR LOSS OF REVENUE CA NNOT BE CONSTRUED TO MEAN THAT A PENALTY CAN BE IMPOSED AS AN AUTOMATIC CONSEQUENCE FOR ADDITION TO RETURNED INCO ME. 4.3.6 IN THE LIGHT OF THE ABOVE DISCUSSIONS, AND FOR THE DETAILED REASONS SET OUT ABOVE, THE CONSIDERED VIEW IS THAT EVEN POST DHARMENDRA TEXTILE PROCESSORS' JUDGMENT BY THE HON' BLE SUPREME COURT, MERELY BECAUSE AN ADDITION IS MADE T O THE INCOME DECLARED BY THE ASSESSEE, PENALTY UNDER SECT ION 271(1)(C) CANNOT BE IMPOSED. IN THE CASE OF RAJASTH AN SPINNING AND WEAVING MILLS 22I CTR (SC) CO. THE HON'BLE SC W HILE EXPLAINING THE DECISION IN THE CASE OF DHARMENDRA T EXTILE PROCESSORS' HELD INTER-ALIA THAT, 'IN ALMOST ALL CASE RELATING TO PENALTY, THE DECISI ON IN DHARMENDRA TEXTILE PROCESSORS' IS REFERRED ON BEHAL F OF THE REVENUE AS IF IT LAID DOWN THAT IN EVERY CASE OF NO N-PAYMENT OR SHORT PAYMENT OF DUTY THE PENALTY CLAUSE WOULD AUTO MATICALLY GET ATTRACTED AND THE AUTHORITY HAS NO DISCRETION I N THE MATTER. ONE FAILS TO SEE HOW THE DECISION IN THE CASE OF DH ARMENDRA TEXTILE PROCESSORS' CAN BE SAID TO HOLD THAT SEC.11 AC WOULD APPLY TO EVERY CASE OF NON-PAYMENT OR SHORT-PAYMENT OF DU TY REGARDLESS OF THE CONDITIONS EXPRESSIVELY MENTIONED IN THE SECTION FOR ITS APPLICATION. THERE IS ANOTHER VERY STRONG REASON FOR HOLDING THAT DHARMENDRA TEXTILE PROCESSORS' COU LD NOT HAVE INTERPRETED SEC.11AC IN THE MANNER AS SUGGESTED BEC AUSE IN THAT CASE THAT WAS NOT EVEN THE STAND OF THE REVENU E. THE DECISION IN DHARMENDRA TEXTILE PROCESSORS', MUST TH EREFORE, BE UNDERSTOOD TO MEAN THAT THOUGH THE APPLICATION OF S EC.11AC WOULD DEPEND ON THE EXISTENCE OR OTHERWISE OF THE C ONDITIONS EXPRESSIVELY STATED IN THE SECTION, ONCE THE SECTIO N IS APPLICABLE IN A CASE CONCERNED AUTHORITY WOULD HAVE NO DISCRET ION IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED, EQUAL TO THE DUTY DETERMINED AS PER THE SECTION. THAT IS WHA T DHARMENDRA TEXTILE PROCESSORS' DECIDES. NO OBSERVAT IONS MADE WITH REGARDS TO THE SEVERAL STATUTORY PROVISIONS TH AT CAME UP FOR CONSIDERATION IN THAT CASE'. 4.3.7 THUS IT CAN BE SAFELY DISCERN THAT A PENALT Y UNDER SECTION 271(1)(C) INDEED PROVIDES A REMEDY FOR LOSS OF REVE NUE, BUT THEN, AS THE SCHEME OF SECTION 271(1)(C) ITSELF UNA MBIGUOUSLY ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 7 - SHOWS, A PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED FOR EACH CASE OF ADDITION TO INCOME. SECTION 271(1)(C) ENVISAGES CERTAIN SITUATIONS IN WHICH PENALTY UNDER SECTION 2 71(1)(C) CAN BE IMPOSED AND UNLESS THOSE CONDITIONS ARE SATISFIE D, THE PENALTY CANNOT BE IMPOSED MERELY BECAUSE THERE WAS A LOSS O F REVENUE. EACH AND EVERY ADDITION/DISALLOWANCE CANNOT ATTRACT PENAL PROVISIONS UNLESS THE CONDITIONS IN THE EXPRESS SEC TIONS ARE SATISFIED. 4.3.8 THE EXPRESSION 'CONCEALMENT OF INCOME' HAS N OT BEEN DEFINED IN THE ACT, BUT THE NATURAL MEANINGS OF THE EXPRESSION 'CONCEALMENT' ARE 'TO KEEP FROM BEING SEEN, FOUND, BE SERVED, OR DISCOVERED'. IT WOULD, THEREFORE, FOLLOW THAT THE E XPRESSION CONCEALMENT OF INCOME, IN ITS NATURAL SENSE AND GRA MMATICAL MEANING, IMPLIES AN INCOME IS BEING HIDDEN, CAMOUFL AGED OR COVERED UP SO AS IT CANNOT BE SEEN, FOUND, OBSERVED OR DISCOVERED. CONCEALMENT OF AN INCOME BY AN ASSESSEE CANNOT BE A PASSIVE SITUATION ANYWAY; IT IMPLIES THAT THE PER SON CONCEALING THE INCOME IS HIDING, COVERING UP OR CAMOUFLAGING A N INCOME SOMETHING WHICH ESSENTIALLY REQUIRES A CONSCIOUS EF FORT. ON THE CONTRARY, THIS IS A SITUATION IN WHICH THE ASSESSEE HAS ACTED IN VERY TRANSPARENT AND BONAFIDE MANNER. THERE CANNOT BE ANY CONCEALMENT OF INCOME IN SUCH A SITUATION. 4.3.9 THE EXPRESSION 'FURNISHING OF INACCURATE PAR TICULARS OF INCOME HAS ALSO NOT BEEN DEFINED IN THE ACT. THE E XPRESSION INACCURATE REFERS TO NOT IN CONFORMITY WITH THE FACT OR TRUTH' AND THAT IS THE MEANING WHICH, IN OUR CONSIDERED VI EW, IS RELEVANT IN THE CONTEXT OF FURNISHING OF INACCURAT E PARTICULARS'. THE EXPRESSION PARTICULARS' REFERS TO FACTS, DETA ILS, SPECIFICS, OR INFORMATION ABOUT SOMEONE OR SOMETHING'. THEREFORE, THE PLAIN MEANING OF THE EXPRESSION FURNISHING OF INACCURA TE PARTICULARS OF INCOME IMPLIES FURNISHING OF DETAILS OR INFORMA TION ABOUT INCOME WHICH ARE NOT IN CONFORMITY WITH THE FACTS O R TRUTH. 4.3.10 IN THE CASE OF CIT VS. ATUL MOHAN BINDAL [20 09] 317 ITR [SC] WHICH IS DIRECTLY IN THE CONTEXT OF PENALTY U/ S. 271I(1)(C) OF THE INCOME-TAX ACT AND IT IS RENDERED AFTER CONSIDE RING AND ANALYZING THE TWO DECISIONS OF THE SUPREME COURT VI Z. (I) M/S. DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277 [ SC] AND (II) UOI VS. RAJASTHAN SPINNING AND WEAVING MILLS L TD. (2009) 180 TAXMAN 609 [SC], INTER ALIA, BY EXTENSIVELY QUOTING FROM THOSE TWO DECISIONS. IT HAS BEEN HELD IN PARA-11 IN TER ALIA AS FOLLOWS: ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 8 - 11.... THE PENALTY SPOKEN OF IN SECTION 271(1)(C) IS NEITHER CRIMINAL NOR QUASI CRIMINAL BUT A CIVIL LIABILITY; ALBEIT A STRICT LIABILITY. SUCH LIABILITY BEING CIVIL IN NATURE, MENS REA IS NOT ESSENTIAL. THEN IN PARAS 12 AND 13 OF THAT DECISION THE SUPREM E COURT HAS EXTENSIVELY REPRODUCED THE RELEVANT PARTS OF THE TW O DECISIONS OF (I) M/S. DHARMENDRA TEXTILE PROCESSORS (306 ITR 277 ) AND (II) UOI VS. RAJASTHAN SPINNING AND WEAVING MILLS LTD. ( 180 TAXMAN 609). JUST AFTER REPRODUCING PARA 23 OF THE AFORESA ID SUPREME COURT'S DECISION IN RAJASTHAN SPINNING AND WEAVING MILLS LTD. IT EXTENDS AND APPLIES THE TENETS OF PARAS 21 AND 23 T O THE PENALTY U/S. 271(1)(C) IN PARA 14 AS FOLLOWS: '14. IT GOES WITHOUT SAYING THAT FOR APPLICABIL ITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' ( EMPHASIS SUPPLIED) IT IS THEREFORE OBVIOUS THAT, TO JUSTIFY PENALTY U/ S.27I(I)(C) CONCEALMENT AND/OR FURNISHING OF INACCURATE PARTICU LARS - REAL OR DEEMED - MUST BE SHOWN TO BE EXISTING; MEANING THER EBY THAT, EACH AND EVERY ADDITION OR DISALLOWANCE MADE IN THE ASSESSMENT ORDER WILL NOT RESULT IN LEVY OF PENALTY U/S.271(1) (C). 4.3.11 FINALLY, IN THE CASE OF CIT AHMEDABAD V. REL IANCE PETROPRODUCTS PVT. LTD., WHICH IS DIRECTLY IN THE C ONTEXT OF PENALTY U/S. 271(1X0) OF THE INCOME-TAX ACT THE HON 'BLE SUPREME COURT OF INDIA HAS HELD THAT 'A DISALLOWANC E OF CLAIM OR AN INCORRECT CLAIM WILL NOT AMOUNT TO FURNISHING IN ACCURATE PARTICULARS OF INCOME, AN ASSESSEE MUST BE STRICTLY COVERED BY THE PROVISION FOR PENALTY TO BE LEVIED.' 4.3.12 IN THE INSTANT CASE DURING THE ASSESSMENT PR OCEEDING WHEN THE OMISSION WAS BROUGHT TO THE NOTICE OF THE APPELLANT, HE AGREED TO THE ADDITION AND PLEADED THAT THE OMISSIO N CREPT INTO THE ACCOUNT DUE TO THE NEGLIGENCE OF THE AUTHORIZED PERSON - THE ACCOUNTANT WHO LOOKS AFTER THE AFFAIRS OF THE APPEL LANT. THE APPELLANT ALSO MADE UP BY PAYING THE TAX AROUSED DU E TO THE ADDITION MADE TO THE INCOME DECLARED IN THE RETURN OF INCOME. THE APPELLANT ALSO DID NOT PREFER APPEAL BECAUSE HI S INTENTION WAS BONAFIDE AND TO CRAVE LEAVE FROM PENAL PROVISIO NS OF THE ACT. THE CONTENTION OF THE APPELLANT IS SUPPORTED B Y THE DECISIONS OF HON'BLE RAJASTHAN HC IN THE CASE OF AD DL. CIT VS. AGRAWAL MISTAN BHANDAR 131 ITR 619 (RAJ.) WHEREIN I T WAS HELD THAT 'OFFER OF INCOME TO AVOID APPEALS CANNOT BE IN FERRED AS CONCEALMENTS'. IN THE CASE OF CIT VS. BENGAL IRON G ALVANISING ITA NO. 228 AHD 2013 SHRI LALUBHAI B. PATEL, NANI DAMAN. FOR A.Y. 2009-10 - 9 - WORKS 165 ITR 249 (CAL.) IT WAS HELD THAT 'FULL DIS CLOSURE BEFORE ASSESSMENT DOES NOT INFER CONCEALMENT'. SIMILARLY I N THE CASE OF CIT VS. S.D.RICE MILLS 192 CTR (P&H)24 IT WAS HELD THAT 'WHERE THE ASSESSEE PLACED RELIANCE ON CA'S CERTIFICATE FO R CLAIM OF DEDUCTION, NO PENALTY IS LEVIABLE'. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE RATIO OF THE ABOVE JUDGEMENTS OF HON'BLE SC, I AM INCLINED TO AGREE WI TH THE CONTENTIONS OF THE APPELLANT. 5. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE SUPP ORTED THE ORDER OF THE ASSESSING OFFICER WHEREAS THE AUTHORIZED REP RESENTATIVE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S). 6. WE FIND THAT NO SPECIFIC ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) COULD BE POINTED OUT BY THE DEPARTMENTAL REPRESENTATIVE. FURTHER, IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE RECEIPT OF RS 49,50,000/- WAS DULY DISCLOSED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND WHEN POINTED O UT BY THE ASSESSING OFFICER ABOUT ITS TAXABILITY, THE ASSESSEE READILY AGREED TO THAT AND MADE NO ATTEMPT TO HIDE THE MATERIAL FACT. THE ABOVE CONDU CT OF THE ASSESSEE SHOWS THE BONAFIDES OF HIS CONTENTION THAT OMISSION IN RE TURN OF INCOME WAS NOT DELIBERATE BUT WAS DUE TO BONAFIDE MISTAKE. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). IT IS CONFIRMED. THE APP EAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 20 TH OF JUNE, 2014 AT AHMEDABAD. SD/- SD/- (G.C. GUPTA) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 20/06/2014 GHANSHYAM MAURYA, SR. P.S.