HCL Technologies Ltd., New Delhi V. DCIT, New Delhi

ITA 3702/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8428 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Question of law; Difference of opinion; Onus to prove; Revised return
• Section: 271(1)(c); 14A; 13; 10; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.-3702/DEL/2017 (ASSESSMENT YEAR: 2005-06) HCL TECHNOLOGIES LTD., 806, SIDDHARTHA, 96, NEHRU PLACE, NEW DELHI. VS. DCIT, CIRCLE 11(1), NEW DELHI. PAN NO. AAACH1645P APPELLANT RESPONDENT ASSESSEE BY SH. AJAY VOHRA, SR. ADVOCATE SH. NIRAJ JAIN, ADVOCATE SH. ADITYA VOHRA, ADVOCATE REVENUE BY MS. SUNITA SINGH, CIT/DR DATE OF HEARING: 28/07/2021 PRONOUNCEMENT ON 16/08/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 6/4/2017 IN APPEAL NO . 101/16- 17/CIT(A)-22, NEW DELHI (LD. CIT(A)) IN THE CASE OF M/S HCL TECHNOLOGIES LTD (THE ASSESSEE) CONFIRMING THE PE NALTY LEVIED BY THE LEARNED ASSESSING OFFICER IN THE ORDER DATED 30/03/ 2015, HOWEVER, AT A REDUCED AMOUNT, THIS APPEAL IS PREFERRED BY THE ASS ESSEE. 2 2. BRIEF FACTS OF THE CASE, RELEVANT FOR THE DISPO SAL OF THIS APPEAL ARE THAT THE ASSESSEE HAD SEVERAL EXPORT-ORIENTED UNITS WHICH WERE ALSO REGISTERED WITH STPI AUTHORITY AND IN RESPECT OF SU CH UNITS, THE ASSESSEE HAS BEEN CLAIMING DEDUCTION UNDER SECTION 10A OF TH E INCOME TAX ACT, 1961 (FOR SHORT THE ACT). FOR THE ASSESSMENT YEAR 2005-06, ASSESSEE FILED THE RETURN OF INCOME ON 31/10/2005 DECLARING AN INCOME OF RS.18,95,23,990/-AND SUBSEQUENTLY REVISED THE SAME ON 30/3/2007 DECLARING A TOTAL INCOME OF RS.1,17,48,138/-. IN TH E ORIGINAL RETURN OF INCOMETHE ASSESSEE HAD SHOWN BUSINESS INCOME OF RS. 2,58,17,15,909/- AND CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT TO THE TUNE OF RS.5,57,24,87,070/-CONSIDERING 13 MOTHER LICENSES A S THE UNDERTAKINGS ELIGIBLE FOR SUCH DEDUCTIONWHEREAS IN THE REVISED R ETURN OF INCOME THE ASSESSEE SHOWED BUSINESS INCOME OF RS.2,58,77,95,99 1/- AND CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT AT RS. 2,75, 57,24,990/-AND A LOSS FROM BUSINESS OR PROFESSION TO THE TUNE OF RS.16,79 ,29,000/-CONSIDERING 31 UNDERTAKINGS REGISTERED WITH STPI UNDER 13 MOTHE R LICENSES AS INDEPENDENT UNDERTAKINGS ELIGIBLE FOR DEDUCTION UND ER SECTION 10A OF THE ACT. DRAFT ASSESSMENT ORDER WAS PASSED AT A TOTAL I NCOME OF RS.2,16,07,60,309/-ON 26/12/2008, WITHOUT ALLOWING THE ADDITIONAL CLAIM OF DEDUCTION RAISED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME UNDER SECTION 10A OF THE ACT ON THE GROUND THAT NO SCRUTI NY WAS DONE IN INITIAL ASSESSMENT YEARS REGARDING THE CLAIM OF EXTENSIONS AS A SEPARATE UNITS, SUCH CLAIM CANNOT BE ALLOWED IN SUCCEEDING ASSESSME NT YEAR AND EXTENSIONS WERE NOT SPECIFICALLY AND INDEPENDENTLY APPROVED BY THE STPI AUTHORITY. 3 3. ASSESSEE FILED OBJECTIONS BEFORE THE LD. DISPUTE RESOLUTION PANEL (DRP) AND PURSUANT TO THE DIRECTIONS DATED 30/9/201 0 PASSED BY THE LD. DRP, LEARNED ASSESSING OFFICER PASSED THE FINAL ASS ESSMENT ORDER ON 28/12/2010 BY DISALLOWING THE ADDITIONAL CLAIM OF D EDUCTION RAISED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME UNDER SECT ION 10A OF THE ACT. 4. SUCH FINAL ASSESSMENT ORDER PURSUANT TO THE DIRE CTIONS OF THE LD. DRP WAS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBU NAL AND THE TRIBUNAL BY ORDER DATED 30/5/2014 REJECTED THE CLAIM OF DEDU CTION UNDER SECTION 10A OF THE ACT PREFERRED BY WAY OF REVISED RETURN O F INCOME, TREATING EACH OF THE 31 UNITS OF SEPARATE INDEPENDENT UNDERT AKINGS AND SUCH FINDINGS OF THE TRIBUNAL WERE UPHELD BY THE HONBLE HIGH COURT. 5. LEARNED ASSESSING OFFICER INITIATED PENALTY PROC EEDINGS UNDER SECTION 271(1)( C ) OF THE ACT AND BY ORDER DATED 3 0/3/2015 AND LEVIED PENALTY OF RS. 13,31,04,779/- ON THE ADDITION RELAT ING TO THE DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 10A OF THE ACT A ND ALSO THE DISALLOWANCE OF DEDUCTION OF EXPENSES INCURRED TOWA RDS EARNING OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES C LAIMED IN THE REVISED RETURN, HOLDING THAT THE ASSESSEE IS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ALSO CONCEALME NT OF INCOME. 6. AGGRIEVED BY THE LEVY OF PENALTY, ASSESSEE PREFE RRED AN APPEAL BEFORE THE LD. CIT(A) AND ARGUED THAT NO SATISFACTI ON FOR THE CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF ADDITIONS/DISALLOWANCES MADE IN THE ASSESSMENT ORDE R ON WHICH PENALTY WAS LEVIED WAS RECORDED BY THE LEARNED ASSESSING OF FICERIN THE ASSESSMENT ORDER; THAT NO PENALTY COULD BE LEVIED I N RESPECT OF 4 DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 10 A OF THE ACT; AND THAT THE LEVY OF PENALTY IS BAD INASMUCH AS THE CLA IM MADE IN THE REVISED RETURN OF INCOME WAS NOT ACCEPTED AND WAS NOT THE B ASIS FOR COMPUTING THE INCOME OF THE ASSESSEE IN THE ASSESSMENT ORDER. 7. LD. CIT(A) RECORDED A FINDING THAT THE ASSESSEE PREFERRED THE NEW CLAIM AFTER LONGTIME CHANGING ITS EARLIER STAND AND IN VIEW OF THE ORDERS OF THE TRIBUNAL SUCH CHANGE OF STAND IS NOT AN INAD VERTENT MISTAKE OR OMISSION BUT IT IS A DELIBERATE ONE, WITH THE SOLE PURPOSE OF EXTENDING THE PERIOD OF EXEMPTION UNDER SECTION 10 A AND THE QUAN TUM OF EXEMPTION, WHEN EVEN ENQUIRY INTO THE PAST WAS NOT POSSIBLE. A CCORDING TO THE LD. CIT(A) THIS LAPSE OF THE ASSESSEE AMOUNTS TO DEEMED CONCEALMENT UNDER EXPLANATION 1 TO SECTION 271(1)( C ) OF THE ACT. LD . CIT(A), THEREFORE, DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND REFU SED TO BELIEVE THAT THE LAPSE OF THE ASSESSEE IS A BONA FIDE ONE AND ON THAT GROUND CONFIRMED THE LEVY OF PENALTY. LD. CIT(A) HOWEVER N OTICED THAT, THOUGH IN THE PENALTY ORDER THE LEARNED ASSESSING OFFICER MEN TIONED THAT THE ADDITIONS WHICH WERE CONFIRMED BY THE ITAT ALONE WE RE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(1)( C ) OF THE ACT, AS A MATTER OF FACT THE LEARNED ASSESSING OFFICER BASED THE IMPOSI TION OF PENALTY ON THE DISALLOWANCE THAT WAS DELETED BY THE ITAT AND THERE FORE, INSTEAD OF TAKING RS. 18,32,37,920/-, LEARNED ASSESSING OFFICE R TOOK THE AMOUNT OF RS. 36,31,53,638/-AS THE CONCEALED INCOME. LD. CIT( A) THEREFORE DIRECTED THAT THE TOTAL QUANTUM OF PENALTY LEVIED MUST BE WI TH REFERENCE TO THE DEEMED CONCEALED INCOME BUT NOT WITH REFERENCE TO T HE DISALLOWANCE THAT WAS DELETED BY THE ITAT. IT, THEREFORE, RESULT S IN REDUCING THE TOTAL 5 QUANTUM OF PENALTY. ASSESSEE IS AGGRIEVED BY THE CO NFIRMATION OF LEVY OF PENALTY AND PREFERRED THIS APPEAL. 8. ARGUMENT OF THE LD. AR IS THREEFOLD. HE FIRSTLY SUBMITS THAT THE CLAIM OF DEDUCTION UNDER SECTION 10A SUPPORTED BY F ORM 56F IS A BONA FIDE AND THEREFORE, ACCORDING TO HIM SO LONG AS THE ASSESSEE HAS NOT CONCEALED ANY MATERIAL FACT OR THE FACTUAL INFORMAT ION GIVEN BY HIM HAS NOT BEEN FOUND TO BE INCORRECT, HE WILL NOT BE LIAB LE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT EVEN IF THE CLAI M MADE BY THE ASSESSEE IS UNSUSTAINABLE IN LAW. FOR THIS PROPOSITION HE PL ACED RELIANCE ON THE DECISION OF THE TRIBUNAL REPORTED IN ACIT VS. DSL S OFTWARE LTD., 147 TTJ 67 (DELHI-TRIB), DCIT VS. GENESIS INTERNATIONAL CORPOR ATION LIMITED 147 ITD 693 (MUM TRIB) AND THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION (P) LTD 327 ITR 510 (DEL). HIS SECOND LIMB OF ARGUMENT IS THAT NO PENALTY IS LEVIABLE IN RESPECT OF THE DISALLOWANCES WHICH ARE DEBATABLE, AND IN THAT PERS PECTIVE WHEN ONCE THE QUANTUM APPEAL IS ADMITTED BY THE HONBLE HIGH COURT OR THE SLP BY THE HONBLE SUPREME COURT, THE ISSUE BECOMES AVAILA BLE AND THEREFORE, NO LEVY OF PENALTY ARISES. RELIANCE IS PLACED ON TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LD. PCIT V S. HARSH INTERNATIONAL (P) LTD. 431 ITR 118 (DEL), CIT VS. NAYANBUILDERS AND D EVELOPERS 368 ITR 722 (DEL) AND CIT VS. RAHUL MEHTA IN ITA NO. 523/2011. LASTLY HE CONTENDS THAT WHERE THEADDITION IS MADE IN RESPECT OF A BONA FIDE CLAIM, EVEN IF SUCH CLAIM IS UNTENABLE ACCORDING TO THE LEARNED AS SESSING OFFICER, STILL NO PENALTY COULD BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT. FOR THIS PROPOSITION HE CITED THE DECISIONS OF THE HONBLE A PEX COURT IN THE CASES 6 OF CIT VS. RELIANCE PETRO PRODUCTS PRIVATE LIMITED 322 ITR 158 (SC) AND DILIP N. SHROFF 291 ITR 519 (SC). 9. PER CONTRA WHILE PLACING RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW, LEARNED DR SUBMITTED THAT IT WAS POINTED OUT BY THETRIBUNAL IN THE QUANTUM APPEAL THAT THE LAPSES COMMITTED BY THE ASSESSEE IN THIS MATTER ARE NOT INADVERTENT MISTAKES, BUT A DESIGN W ITH THE SOLE PURPOSE OF EXTENDING THE PERIOD OF EXEMPTION U/S. 10 OF THE ACT AND THE QUANTUM OF EXEMPTION. IN SUCH CIRCUMSTANCE, WHERE ENQUIRY I NTO THE PAST WAS NOT POSSIBLE, SHE SUBMITTED THAT THE ASSESSEE DID NOT P RODUCE ANY EVIDENCE, WHATSOEVER, BEFORE THE TRIBUNAL ALSO TO ESTABLISH T HAT THE APPLICATIONS BEFORE THE STPI AUTHORITIES WERE FOR SETTING UP OF NEW UNDERTAKINGS AND IN THESE CIRCUMSTANCES, AFTER A LONG LAPSE OF TIME, THE ASSESSEE IS CHANGING THE STAND TO CLAIM THE EXEMPTION IN RESPEC T OF 31 UNDERTAKINGS OR 13 UNDERTAKINGS, AS THE CASE MAY BE, CERTAINLY A MOUNTS TO FURNISHING OF INACCURATE PARTICULARS WITH A DESIGN TO CONCEAL THE REAL FACTS. SHE BASED THIS ARGUMENT ON THE FACT THAT THE APPLICATIO NS SUBMITTED BY THE ASSESSEE BEFORE THE STPI AUTHORITIES, WHETHER OR NO T FOR SETTING UP OF NEW UNDERTAKINGS, GOES UNVERIFIABLE. 10. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE ON EITHER SIDE. FACTS INVOLVED IN THIS APPEAL, IN T HEIR SIMPLEST FORM, ARE THAT IN THE ORIGINAL RETURN, THE DEDUCTION U/S. 10A OF THE ACT WAS CLAIMED IN RESPECT OF 13 MOTHER LICENSES, AS THE UNDERTAKIN GS ELIGIBLE FOR SAID DEDUCTION WHEREAS THE ASSESSEE REVISED THE RETURN C LAIMING DEDUCTION U/S. 10A CONSIDERING 31 UNDERTAKINGS REGISTERED WIT H STPI AUTHORITY UNDER 13 MOTHER LICENSES AS INDEPENDENT UNDERTAKING S ELIGIBLE U/S. 10A OF THE ACT. WHILE DOING SO, ADMITTEDLY, THE ASSESSE E FILED THE PRESCRIBED 7 FORM NO. 56F DULY SIGNED BY THE CHARTERED ACCOUNTAN T IN RESPECT OF ALL THE 31 UNDERTAKINGS CLAIMING THEM TO BE INDEPENDENT . LEARNED ASSESSING OFFICER, CIT(A), AND THE TRIBUNAL REJECTED THE CLAI M OF THE ASSESSEE FOR DEDUCTION U/S. 10A IN RESPECT OF 31 UNDERTAKINGS. I T IS ALSO AN ADMITTED FACT THAT BY ORDER DATED 24.03.2015 IN ITA NO. 46/2 015, HONBLE HIGH COURT ADMITTED THE QUESTION THAT IF THE TRIBUNAL F ELL INTO ERROR IN THE CIRCUMSTANCES OF THE CASE IN CONTINUING THE BENEFIT OF SECTION 10A TO ASSESSEE FOR ASSESSMENT YEAR 2005-06 ON THE GROUND THAT ENHANCED CLAIM BY WAY OF INCLUDING 18 UNITS AS INDEPENDENTLY ENTITLED TO THE BENEFIT SO MADE, WAS NOT TENABLE, BUT ULTIMATELY R EJECTED THE CLAIM OF THE ASSESSEE BY ORDER DATED 15.04.2015 AND REFUSED THE REVIEW PETITION. NOW THE MATTER IS PENDING BEFORE THE HONBLE SUPREM E COURT AFTER THE HONBLE SUPREME COURT GRANTED SPECIAL LEAVE. 11. BASING ON THESE ADMITTED FACTS, LD. AR SUBMITS THAT THE PENALTY IS NOT LEVIABLE IN THIS CASE. IN ACIT VS. DSL SOFTWARE LTD.(2012) 20 TAXMANN.COM 408 (DELHI), IT WAS HELD THAT WHERE CLA IM FOR DEDUCTION WAS MADE UNDER SECTIONS 10A OF THE ACT ON THE BASIS OF CERTIFICATE OF ACCOUNTANT, WAS BONA FIDE AND WHERE ALL THE MATERIA L FACTS RELATING THERETO WERE FURNISHED, THE ASSESSEE COULD NOT BE H ELD LIABLE FOR PENALTY. SO ALSO IN DCIT VS. GENESYS INTERNATIONAL CORPORATI ON LTD. (2013) 32 TAXMANN.COM 372 (MUMBAI-TRIB), IT WAS HELD THAT WHE RE THE ASSESSEE MADE ADEQUATE DISCLOSURE WHILE CLAIMING THE EXEMPTI ON, PENALTY U/S. 271(1)(C) IS NOT SUSTAINABLE. IN ZOOM COMMUNICATION (P) LTD. (SUPRA), HONBLE HIGH COURT HELD THAT SO LONG AS THE ASSESSE E HAS NOT CONCEALED ANY MATERIAL FACT OR THE FACTUAL INFORMATION GIVEN BY HIM HAS NOT BEEN FOUND TO BE INCORRECT, HE WILL NOT BE LIABLE TO IMP OSITION OF PENALTY UNDER 8 SECTION 271(1)(C) OF THE ACT, EVEN IF THE CLAIM MAD E BY HIM IS UNSUSTAINABLE IN LAW PROVIDED THAT HE EITHER SUBSTA NTIATES THE EXPLANATION OFFERED BY HIM OR THE EXPLANATION, EVEN IF NOT SUBSTANTIATED, IS FOUND TO BE BONA FIDE. IN THIS MATTER, THE CLAIM OF THE ASSESSEE IS ACCOMPANIED BY THE CERTIFICATE OF THE CHARTERED ACC OUNTANT IN PRESCRIBED FORM 56F IN RESPECT OF ALL THE 31 INDEPENDENT UNDER TAKINGS. WHETHER OR NOT SUCH CLAIM IS SUSTAINABLE AT THE END OF THE REV ENUE IS A DIFFERENT MATTER AND IT DOES NOT AFFECT THE BONA FIDE BELIEF OF THE ASSESSEE TO PREFER SUCH A CLAIM. IT IS NOT A BLATANTLY FALSE CL AIM ACCOMPANIED BY ANY CONCEALMENT OF FACTS. 12. ADMITTEDLY, IN THIS CASE, HONBLE HIGH COURT AD MITTED THE SUBSTANTIAL QUESTION OF LAW RELATING TO THE CLAIM O F ASSESSEE TO AVAIL THE BENEFIT OF SECTION 10A OF THE ACT FOR THE ASSESSMEN T YEAR 2005-06 ON THE GROUND THAT ENHANCEMENT IN CLAIM SO MADE WAS TENABL E OR NOT. THIS VERY FACT SHOWS THAT THE ISSUE INVOLVED IN THIS MATTER I S DEBATABLE ISSUE. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR THAT THE P ENALTY IS NOT LEVIABLE IN CASE WHERE THE PROPOSED PENALTY RELATES TO THE DEBA TABLE ISSUES OR WHERE TWO VIEWS ARE POSSIBLE. THIS VIEW IS FORTIFIE D BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF P CIT VS. HARSH INTERNATIONAL (P) LTD. (SUPRA), CIT VS. NAYAN BUILD ERS & DEVELOPERS (SUPRA) AND CIT VS.RAHUL MEHTA (SUPRA). 13. LASTLY, COMING TO THE DECISIONS REPORTED IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) AND DILIP N. SHROFF (SUP RA), WE DEEM IT JUST AND NECESSARY TO EXTRACT THE RELEVANT PARAGRAPHS FOR TH E SAKE OF COMPLETENESS. IN RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), HONBLE SUPREME COURT OBSERVED THAT 9 7. AS AGAINST THIS, LEARNED COUNSEL APPEARING ON B EHALF OFTHE RESPONDENT POINTED OUT THAT THE LANGUAGE OF SECTION 271(1)(C) HAD TO BE STRICTLY CONSTRUED, THIS BEING A TAXINGSTATUTE AND MORE PARTICULARLY THE ONE PROVIDING FOR PENALTY. ITWAS POINTED OUT THAT U NLESS THE WORDING DIRECTLY COVERED THEASSESSEE AND THE FACT SITUATION HEREIN, THERE COULD NOT BE ANYPENALTY UNDER THE ACT. IT WAS POINTED OUT THAT THERE WAS NOCONCEALMENT OR ANY INACCURATE PARTICULARS REGARDI NG THEINCOME WERE SUBMITTED IN THE RETURN. SECTION 271(1)(C) IS ASUND ER:- '271(1) IF THE ASSESSING OFFICER OR THE COMMISSIONE R (APPEALS)OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS U NDERTHIS ACT, IS SATISFIED THAT ANY PERSON- (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHEDINACCURATE PARTICULARS OF SUCH INCOME.' A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN OR DER TO BECOVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HEINCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVEFURNISHED INACCURATE PARTICULARS OF HIS INCOME. PRESENT IS NOTTHE CASE O F CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OFTHE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FORREVENUE SUGGESTED THAT BY MAKING INCORRE CT CLAIM FOR THEEXPENDITURE ON INTEREST, THE ASSESSEE HAS FURNIS HEDINACCURATE PARTICULARS OF THE INCOME. AS PER LAW LEXICON, THEM EANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (INPLURAL SENSE ); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OFAN ACCOUNT. THEREFORE, THE WORD 'PARTICULARS' USED IN THESECTION 271(1)(C) WOULD EMBRACE THE MEAN ING OF THE DETAILS OFTHE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NOINFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT ORINACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAILSUPPLIED WAS FOUND TO B E FACTUALLY INCORRECT. HENCE, AT LEAST,PRIMA FACIE, THE ASSESSE E CANNOT BE HELD GUILTY OF FURNISHINGINACCURATE PARTICULARS. THE LEARNED CO UNSEL ARGUED THAT'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE E XPENDITURE ONINTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OFSUC H INCOME'. WE DO NOT THINK THAT SUCH CAN BE THEINTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAINAND SIMPLE. IN ORDER TO EXPOSE THE A SSESSEE TO THE PENALTYUNLESS THE CASE IS STRICTLY COVERED BY THE P ROVISION, THEPENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OFIMAGI NATION, MAKING AN INCORRECT CLAIM IN LAW CANNOTTANTAMOUNT TO FURNISHI NG INACCURATE PARTICULARS. INCOMMISSIONER OF INCOME TAX, DELHI VS . ATUL MOHAN BINDAL[2009(9) SCC 589], WHERE THIS COURT WAS CONSI DERING THESAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OF FICERHAS TO BE 10 SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULA RS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARSOF SUCH INCOME. THI S COURT REFERRED TO ANOTHER DECISION OFTHIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILEPROCESSORS [2008(13) SCC 369], AS ALSO, THE DECISION IN UNIONOF INDIA VS.RAJASTHANSPG. &WVG. MILLS [2009(13) SCC 448 ]AND REITERATED IN PARA 13 THAT:- '13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' 8. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN T HAT THECONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE THEPENALTY IS I MPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHINGWOULD DEPEND UPON THE RET URN FILED BECAUSE THAT IS THE ONLYDOCUMENT, WHERE THE ASSESSEE CAN FU RNISH THE PARTICULARS OFHIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF VS.JOINT COMMISSIONER OF INCOME TAX, MUMBAI &ANR. [2007(6)SCC 329], THIS COURT EXPL AINED THE TERMS 'CONCEALMENT OFINCOME' AND 'FURNISHING INACCURATE P ARTICULARS'. THE COURTWENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRA CT THE PENALTYUNDER SECTION 271(1)(C), MENS REA WAS NECESSARY, ASACCORD ING TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED ADELIBERATE ACT OR OMIS SION ON BEHALF OF THE ASSESSEE. IT WENTON TO HOLD THAT CLAUSE (III) OF SE CTION 271(1) PROVIDED FOR ADISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY,INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THANTHE AMO UNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCHCONCEALMENT OF PARTICULA RS OF INCOME, BUT IT MAY NOT EXCEEDTHREE TIMES THEREOF. IT WAS POINTED O UT THAT THE TERM'INACCURATE PARTICULARS' WAS NOT DEFINED ANYWHE RE IN THE ACTAND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESS MENTOF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHINGINACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSEEMUST BE FOUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION ISNOT ONLY NOT BONA FIDE BUT ALL TH E FACTS RELATING TO THE SAMEAND MATERIAL TO THE COMPUTATION OF HIS INCOME W ERE NOTDISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUSTB E PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THEASSESSEE H AD FURNISHED THE PARTICULARS OF HIS INCOME. THECOURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REAWAS ESSENTIAL. IT WAS ONLY ON TH E POINT OF MENS REA THAT THEJUDGMENT IN DILIP N. SHROFF VS. JOINT COMMI SSIONER OF INCOMETAX, MUMBAI &ANR. WAS UPSET. IN UNION OF INDIA VS.DHARAM ENDRA TEXTILE PROCESSORS (CITED SUPRA), AFTER QUOTINGFROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTION271(1)(C), THE COURT CAME T O THE CONCLUSION THAT SINCE SECTION271(1)(C) INDICATED THE ELEMENT OF STR ICT LIABILITY ON THEASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACC URATEPARTICULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OFMENS REA. THE COURT WENT 11 ON TO HOLD THAT THE OBJECTIVEBEHIND ENACTMENT OF SE CTION 271(1)(C) READ WITHEXPLANATIONS INDICATED WITH THE SAID SECTION WA S FORPROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WASA CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEALMENT IS NOT ANESSENTIAL I NGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THECASE IN THE MATTER OF PRO SECUTION UNDER SECTION 276-C OF THEACT. THE BASIC REASON WHY DECISION IN D ILIP N. SHROFF VS. JOINTCOMMISSIONER OF INCOME TAX, MUMBAI &ANR. (CITE D SUPRA)WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS.DHARAM ENDRA TEXTILE PROCESSORS (CITED SUPRA), WAS THATACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEENSECTION 271(1)(C) AND SECTION 276 -C OF THE ACT WAS LOST SIGHTOF IN CASE OF DILIP N. SHROFF VS. JOINT C OMMISSIONER OF INCOMETAX, MUMBAI &ANR. (CITED SUPRA). HOWEVER, IT MUST BEPOINTED OUT THAT IN UNION OF INDIA VS. DHARAMENDRA TEXTILEPROCE SSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THEREASONING IN THE DECISIO N IN DILIP N. SHROFF VS. JOINTCOMMISSIONER OF INCOME TAX, MUMBAI &ANR. (CITE D SUPRA),WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCE AL'AND INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N.SHROF F VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI &ANR.(CITED SUPR A) TO THE EFFECT THAT MENS REA WAS AN ESSENTIALINGREDIENT FOR THE PE NALTY UNDER SECTION 271(1)(C) THAT THEDECISION IN DILIP N. SHROFF VS. J OINT COMMISSIONER OF INCOMETAX, MUMBAI &ANR. (CITED SUPRA) WAS OVERRULED . 8. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH TH E MENSREA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE,AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATEPARTICULARS. IN WEBSTE R'S DICTIONARY, THE WORD 'INACCURATE'HAS BEEN DEFINED AS:- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH;ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT'. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS'IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THERETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOTACCORDING TO TRUTH OR ERRO NEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NOFINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURNWERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOTBEING THE CASE, THER E WOULD BE NO QUESTION OF INVITING THEPENALTY UNDER SECTION 271(1 ) OF THE ACT. A MERE MAKING OFTHE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW , BY ITSELF, WILL NOTAMOUNT TO FURNISHING INACCURATE PARTICULARS REGA RDING THEINCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURNCANNOT A MOUNT TO THE INACCURATE PARTICULARS. 12 10. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A O F THE ACTSPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THEEXPENDITUR E INCURRED BY THE ASSESSEE IN RELATION TO INCOMEWHICH DOES NOT FORM P ART OF THE TOTAL INCOME UNDER THE ACT. ITWAS FURTHER POINTED OUT THA T THE DIVIDENDS FROM THE SHARESDID NOT FORM THE PART OF THE TOTAL INCOME . IT WAS, THEREFORE,REITERATED BEFORE US THAT THE ASSESSING O FFICER HAD CORRECTLYREACHED THE CONCLUSION THAT SINCE THE ASSE SSEE HAD CLAIMEDEXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE I NCORRECT; ITAMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED T O BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKEEITHER OF THE TWOFORM S; (I) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY;(II) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATEDAMOUNT) CLAIMED, AN D BOTH TYPES ATTEMPT TO REDUCE THETAXABLE INCOME AND, THEREFORE, BOTH TYPES AMOUNT TOCONCEALMENT OF PARTICULARS OF ONE'S INCOME AS WEL L ASFURNISHING OF INACCURATE PARTICULARS OF INCOME. WE DO NOTAGREE, A S THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITSEXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, INTHEMSELVES, WERE NOT FOUND TO BE I NACCURATE NOR COULD BEVIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TOTHE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELYBECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICHCLAIM WA S NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE,THAT BY ITSELF WO ULD NOT, IN OUR OPINION, ATTRACT THE PENALTYUNDER SECTION 271(1)(C) . IF WE ACCEPT THE CONTENTION OF THEREVENUE THEN IN CASE OF EVERY RETU RN WHERE THE CLAIM MADE ISNOT ACCEPTED BY ASSESSING OFFICER FOR ANY RE ASON, THEASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT I SCLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 14. IN DILIP N. SHROFF (SUPRA), RELEVANT OBSERVATIO NS OF HONBLE APEX COURT ARE TO THE FOLLOWING EFFECT: - 31. SECTION 271(1)(C) OF THE ACT IS IN TWO PARTS. WHEREAS THE FIRST PART REFERS TO CONCEALMENT OF INCOME, THE SECOND PART RE FERS TO FURNISHING OF INACCURATE PARTICULARS THEREOF. IN THE INSTANT CASE , THE PENALTY HAS BEEN LEVIED UPON THE APPELLANT UNDER THE SECOND PART OF SECTION 271(1)(C) OF THE ACT. ONE OF THE QUESTIONS WHICH ARISES FOR CONS IDERATION IS AS TO WHETHER EXPLANATION 1 IS APPLICABLE IN RESPECT OF B OTH THE PARTS OR IN RESPECT OF THE FIRST PART ONLY. . 37. THE LEGAL HISTORY OF SECTION 271(1)(C) OF THE A CT TRACED FROM THE 1922 ACT PRIMA FACIE SHOWS THAT EXPLANATIONS WERE APPLIC ABLE TO BOTH THE PARTS. HOWEVER, EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. THE ROLE OF EXPLANATION HAVING REGARD TO THE PRINCIPLE OF ST ATUTORY INTERPRETATION 13 MUST BE BORNE IN MIND BEFORE INTERPRETING THE AFORE MENTIONED PROVISIONS. CLAUSE (C) OF SUB-SECTION (1) OF SECTIO N 271 CATEGORICALLY STATES THAT THE PENALTY WOULD BE LEVIABLE IF THE AS SESSEE CONCEALS THE PARTICULARS OF HIS INCOME OR FURNISHES INACCURATE P ARTICULARS THEREOF. BY REASON OF SUCH CONCEALMENT OR FURNISHING OF INACCUR ATE PARTICULARS ALONE, THE ASSESSEE DOES NOT IPSO FACTO BECOME LIAB LE FOR PENALTY. IMPOSITION OF PENALTY IS NOT AUTOMATIC. LEVY OF PEN ALTY NOT ONLY IS DISCRETIONARY IN NATURE BUT SUCH DISCRETION IS REQU IRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER KEEPING THE RELEV ANT FACTORS IN MIND. SOME OF THOSE FACTORS APART FROM BEING INHERENT IN THE NATURE OF PENALTY PROCEEDINGS AS HAS BEEN NOTICED IN SOME OF THE DECI SIONS OF THIS COURT, INHERES ON THE FACE OF THE STATUTORY PROVISIONS. PE NALTY PROCEEDINGS ARE NOT TO BE INITIATED, AS HAS BEEN NOTICED BY THE WAN CHOO COMMITTEE, ONLY TO HARASS THE ASSESSEE. THE APPROACH OF THE ASSESSI NG OFFICER IN THIS BEHALF MUST BE FAIR AND OBJECTIVE. 38. CLAUSE (III) OF SUB-SECTION (1) OF SECTION 271 AGAIN PROVIDES FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHO RITY INASMUCH AS THE AMOUNT OF PENALTY MAY NOT BE LESS THAN THE AMOUNT O F TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF HIS INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. THE FACTORS WHI CH ARE MATERIAL FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME AS IS SO UGHT TO BE EMPHASIZED IN EXPLANATION-1, REFER TO COMPUTATION O F INCOME ON THE PART OF THE ASSESSEE WHICH IS DIRECTLY RELATABLE TO : (A) FAILURE TO OFFER AN EXPLANATION AND/ OR OFFERING AN EXPLANATION WHICH I S FALSE; AND (B) WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE T HAT SUCH EXPLANATION IS BONA FIDE. 39. ONLY IN THE EVENT THE FACTORS ENUMERATED IN CLA USES (A) AND (B) OF EXPLANATION-1 ARE SATISFIED AND A FINDING IN THIS B EHALF IS ARRIVED AT BY THE ASSESSING OFFICER, THE LEGAL FICTION CREATED TH EREUNDER WOULD BE ATTRACTED. 40. FOR THE PURPOSE OF INVOKING CLAUSE (III) OF SUB -SECTION (1) OF SECTION 271, THE EXPRESSION AMOUNT OF TAX SOUGHT TO BE EVAD ED IS SET OUT IN EXPLANATION 4. THIS SUB-CLAUSE WOULD BE ATTRACTED W HEN A FINDING IS ARRIVED AT THAT SOME AMOUNT OF TAX WAS SOUGHT TO BE EVADED BY THE ASSESSEE AS ENVISAGED BY CLAUSE (A) THEREOF. EXPLAN ATION APPENDED TO SECTION 271 (1)(C) IS AN EXCEPTION TO THE GENERAL R ULE. IT RAISES A LEGAL FICTION BY REASON WHEREOF A PRESUMPTION IS RAISED A GAINST AN ASSESSEE AS A RESULT WHEREOF THE BURDEN OF PROOF SHIFTS FROM TH E DEPARTMENT TO THE ASSESSEE. LEGAL FICTION, HOWEVER, AS IS WELL-KNOWN MUST BE GIVEN ITS FULL EFFECT WHEN THE CONDITIONS PRECEDENT THEREFOR ARE S ATISFIED AND NOT 14 OTHERWISE. [ASHOK LEYLAND LTD. V. STATE OF T.N. AND ANOTHER, (2004) 3 SCC 1] 44. IT SIGNIFIES A DELIBERATE ACT OR OMISSION ON TH E PART OF THE ASSESSEE. SUCH DELIBERATE ACT MUST BE EITHER FOR THE PURPOSE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. 45. THE TERM 'INACCURATE PARTICULARS' IS NOT DEFINE D. FURNISHING OF AN ASSESSMENT OF VALUE OF THE PROPERTY MAY NOT BY ITSE LF BE FURNISHING OF INACCURATE PARTICULARS. EVEN IF THE EXPLANATIONS AR E TAKEN RECOURSE TO, A FINDING HAS TO BE ARRIVED AT HAVING REGARD TO CLAUS E (A) OF EXPLANATION 1 THAT THE ASSESSING OFFICER IS REQUIRED TO ARRIVE AT A FINDING THAT THE EXPLANATION OFFERED BY AN ASSESSEE, IN THE EVENT HE OFFERS ONE, WAS FALSE. HE MUST BE FOUND TO HAVE FAILED TO PROVE THAT SUCH EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE FACTS RELATING TO TH E SAME AND MATERIAL TO THE INCOME WERE NOT DISCLOSED BY HIM. THUS, APART F ROM HIS EXPLANATION BEING NOT BONA FIDE, IT SHOULD HAVE BEEN FOUND AS O F FACT THAT HE HAS NOT DISCLOSED ALL THE FACTS WHICH WAS MATERIAL TO THE C OMPUTATION OF HIS INCOME. 46. THE EXPLANATION, HAVING REGARD TO THE DECISIONS OF THIS COURT, MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANN ER HE FURNISHED THE PARTICULARS OF HIS INCOME. IT IS BEYOND ANY DOUBT O R DISPUTE THAT FOR THE SAID PURPOSE THE INCOME TAX OFFICER MUST ARRIVE AT A SATISFACTION IN THIS BEHALF. [SEE COMMISSIONER OF INCOME TAX V. RAM COMM ERCIAL ENTERPRISES LTD., 246 ITR 568 AND DIWAN ENTERPRISES V. COMMISSI ONER OF INCOME TAX, 246 ITR 571] 48. PRIMARY BURDEN OF PROOF, THEREFORE, IS ON THE R EVENUE. THE STATUTE REQUIRES SATISFACTION ON THE PART OF THE ASSESSING OFFICER. HE IS REQUIRED TO ARRIVE AT A SATISFACTION SO AS TO SHOW THAT THER E IS PRIMARY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED THE AMOUN T OR FURNISHED INACCURATE PARTICULARS AND THIS ONUS IS TO BE DISCH ARGED BY THE DEPARTMENT. [SEE D.M. MANASVI V. COMMISSIONER OF IN COME TAX, GUJARAT,-II [(1973) 3 SCC 207] 49. WHILE CONSIDERING AS TO WHETHER THE ASSESSEE HA S BEEN ABLE TO DISCHARGE HIS BURDEN, THE ASSESSING OFFICER SHOULD NOT BEGIN WITH THE PRESUMPTION THAT HE IS GUILTY. 50. ONCE THE PRIMARY BURDEN OF PROOF IS DISCHARGED, THE SECONDARY BURDEN OF PROOF WOULD SHIFT ON THE ASSESSEE BECAUSE THE PROCEEDING 15 UNDER SECTION 271(1)(C) IS OF PENAL NATURE IN THE S ENSE THAT ITS CONSEQUENCES ARE INTENDED TO BE AN EFFECTIVE DETERR ENT WHICH WILL PUT A STOP TO PRACTICES WHICH THE PARLIAMENT CONSIDERS TO BE AGAINST THE PUBLIC INTEREST AND, THEREFORE, IT WAS FOR THE DEPARTMENT TO ESTABLISH THAT THE ASSESSEE SHALL BE GUILTY OF THE PARTICULARS OF INCO ME. [SEE ANWAR ALI (SUPRA) AND M/S KHODAYESWARSA (SUPRA)]. 51. THE ORDER IMPOSING PENALTY IS QUASI-CRIMINAL IN NATURE AND, THUS, BURDEN LIES ON THE DEPARTMENT TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED HIS INCOME. SINCE BURDEN OF PROOF IN PENA LTY PROCEEDINGS VARIES FROM THAT IN THE ASSESSMENT PROCEEDING, A FI NDING IN AN ASSESSMENT PROCEEDING THAT A PARTICULAR RECEIPT IS INCOME CANNOT AUTOMATICALLY BE ADOPTED, THOUGH A FINDING IN THE A SSESSMENT PROCEEDING CONSTITUTE GOOD EVIDENCE IN THE PENALTY PROCEEDING. IN THE PENALTY PROCEEDINGS, THUS, THE AUTHORITIES MUST CON SIDER THE MATTER AFRESH AS THE QUESTION HAS TO BE CONSIDERED FROM A DIFFERENT ANGLE. [SEE ANANTHARAMVEERASINGHAIAH& CO. V. C.I.T., ANDHRA PRAD ESH, 1980 SUPP SCC 13]. 53. BEFORE, THUS, A PENALTY CAN BE IMPOSED, THE ENT IRETY OF THE CIRCUMSTANCES MUST REASONABLY POINT TO THE CONCLUSI ON THAT THE DISPUTED AMOUNT REPRESENTED INCOME AND THAT THE ASSESSEE HAD CONSCIOUSLY CONCEALED THE PARTICULARS OF HIS INCOME OR HAD FURN ISHED INACCURATE PARTICULARS THEREOF. 55. IT IS NOW A WELL-SETTLED PRINCIPLE OF LAW THAT MORE STRINGENT THE LAW, MORE STRICT CONSTRUCTION THEREOF WOULD BE NECESSARY . EVEN WHEN THE BURDEN IS REQUIRED TO BE DISCHARGED BY AN ASSESSEE, IT WOULD NOT BE AS HEAVY AS THE PROSECUTION. [SEE P.N. KRISHNA LAL AND OTHERS V. GOVT. OF KERALA AND ANOTHER, 1995 SUPP (2) SCC 187] 61. IT MAY BE TRUE THAT THE LEGISLATURE HAS ATTEMPT ED TO SHIFT THE BURDEN FROM REVENUE TO THE ASSESSEE. IT MAY FURTHER BE COR RECT THAT DIFFERENT VIEWS HAVE BEEN EXPRESSED AS REGARD CONSTRUCTION OF STATUTES IN THE LIGHT OF THE CHANGING LEGISLATIVE SCENARIO, BUT THE TENOR OF A PENAL PROCEEDING REMAINS THE SAME. 65. THE OMISSION OF THE WORD DELIBERATE, THUS, MAY OR MAY NOT BE OF MUCH SIGNIFICANCE BUT WHAT IS MATERIAL IS ITS APPLI CATION. 16 66. SECTION 271(1)(C) REMAINS A PENAL STATUTE. RULE OF STRICT CONSTRUCTION SHALL APPLY THERETO. INGREDIENTS OF IMPOSING PENALT Y REMAINS THE SAME. THE PURPOSE OF THE LEGISLATURE THAT IT IS MEANT TO BE DETERRENT TO TAX EVASION IS EVIDENCED BY THE INCREASE IN THE QUANTUM OF PENALTY, FROM 20% UNDER THE 1922 ACT TO 300% IN 1985. 67. 'CONCEALMENT OF INCOME' AND 'FURNISHING OF INAC CURATE PARTICULARS' ARE DIFFERENT. BOTH CONCEALMENT AND FURNISHING INAC CURATE PARTICULARS REFER TO DELIBERATE ACT ON THE PART OF THE ASSESSEE . A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSIOVERI OR SUGGESTIOFALSI. ALTHOUGH IT MAY NOT BE VERY ACCURAT E OR APT BUT SUPPRESSIOVERI WOULD AMOUNT TO CONCEALMENT, SUGGEST IOFALSI WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. 68. THE AUTHORITIES DID NOT ARRIVE AT A FINDING THA T THE CONSIDERATION AMOUNT FIXED FOR THE SALE OF PROPERTY WAS WHOLLY IN ADEQUATE. THE AUTHORITIES ALSO DO NOT SHOW THAT WHAT ARE THE INAC CURATE PARTICULARS FURNISHED BY THE APPELLANT. THEY ALSO DO NOT STATE THAT WHAT SHOULD HAVE BEEN THE ACCEPTED PRINCIPLES OF VALUATION. WE, THER EFORE, DO NOT ACCEPT THE SUBMISSIONS OF THE LEARNED ADDITIONAL SOLICITOR GENERAL THAT CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS WOULD OVERLAP EACH OTHER, THE SAME WOULD NOT MEAN THAT THEY DO NOT REP RESENT DIFFERENT CONCEPTS. HAD THEY NOT BEEN SO, THE PARLIAMENT WOUL D NOT HAVE USED THE DIFFERENT TERMINOLOGIES. 69. WE HAVE NOTICED HEREINBEFORE THAT EVEN THE WANC HOO COMMITTEE LAID EMPHASIS ON THE FACT THAT EXPLANATION APPENDED TO SUB-SECTION (1) OF SECTION 271 SHOULD BE INSERTED TO CLARIFY THAT W HERE A TAX PAYER'S EXPLANATION IN RESPECT OF ANY RECEIPT, DEPOSIT, OUT GOING OR INVESTMENT IS FOUND TO BE FALSE, THE AMOUNT REPRESENTED BY SUCH R ECEIPT, ETC. SHALL BE DEEMED TO BE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNI SHED. WHAT WAS, THEREFORE, NECESSARY TO BE FOUND OUT IN RESPECT WHE REOF THE ASSESSING OFFICER WAS REQUIRED TO ARRIVE AT A SATISFACTION WA S 'FALSITY' IN FURNISHING OF EXPLANATION BY THE ASSESSEE. EXPLANATION 1, THER EFORE, CATEGORICALLY STATES THAT SUCH EXPLANATION MUST EITHER BE FALSE O R NOT OTHERWISE SUBSTANTIATED. EVEN IN EXPLANATION 4, THE EXPRESSI ON EVADED FINDS PLACE. 81. THERE CAN BE A GENUINE DIFFERENCE OF OPINION BE TWEEN TWO EXPERTS 17 15. VIEWING FROM ANY ANGLE, LEVY OF PENALTY IN THIS CASE IS UNSUSTAINABLE BECAUSE MERE PREFERRING A CLAIM WHICH IS UNACCEPTABLE TO THE REVENUE DOES NOT IPSO FACTO LEAD TO LEVY OF PENALTY. HERE IN THIS CASE, FORM NO. 56F DULY SIGNED BY THE CHARTERED ACCOUNTAN T JUSTIFIES THE PLEA OF BONA FIDE BELIEF ON THE PART OF THE ASSESSEE. IT IS NOT THE ALLEGATION AGAINST THE ASSESSEE THAT ANY MATERIAL FACT RELATIN G TO THE INCOME HAD TO BE UNEARTHED WITH ANY EFFORTS OF THE REVENUE. IT IS ONLY ON THE BASIS OF THE MATERIAL FURNISHED BY THE ASSESSEE, CLAIM OF TH E ASSESSEE FOR BENEFIT U/S. 10A OF THE ACT IN RESPECT OF 31 UNITS AS INDEP ENDENT, WAS REJECTED. EVERY DISALLOWANCE DOES NOT LEAD TO PENALTY, AND MO RE PARTICULARLY SUCH DISALLOWANCES IN RELATION TO THE ISSUES WHICHARE DE BATABLE, IN RESPECT OF WHICH, THE SUBSTANTIAL QUESTIONS OF LAW ARE ADMITTE D BY THE HONBLE HIGH COURT, ARE IMMUNE FROM PENALTY PROCEEDINGS. WITH TH IS VIEW OF THE MATTER, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE PENALTY AND CONSEQUENTLY, WE DIRECT THE ASSESSING OFFICER TO DE LETE THE SAME. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF AUGUST, 2021. SD/- SD/- (N.K.BILLAIYA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16/08/2021