THE DCIT.BARODA Circle-1, V. Gujarat State Fertilisers & Chemicals Ltd.,

ITA 3742/AHD/2003

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1763 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-11-2009
• Assessment Year: 1990-1991
• Appeal Filed On: 06-10-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation
• Section: 271(1)(c); 191; 2

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI H. L. KARWA, J.M.( NOW V.P.) AND P. K. BANSAL, A.M. ITA NO.3742/AHD/2003 ASST. YEAR:1990-91 DY. COMMISSIONER OF INCOME-TAX, BARODA CIRCLE-1, BARODA. V/S . GUJARAT STATE FERTILIZER & CHEMICALS LTD., BARODA. PAN NO.AAACG 7996C (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI B. S. GEHLOT, CIT, DEPARTMENTAL REPRESENTATIVE. RESPONDENT BY:- SHRI J.P. SHAH, A.R. O R D E R PER P. K. BANSAL, ACCOUNTANT MEMBER . THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 17.07.2003 BY WHICH THE CIT(A) HAS DEL ETED THE PENALTY AMOUNTING TO RS.26,47,246/- IMPOSED UNDER SECTION 2 71(1)(C). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WH ILE SUBMITTING THE RETURN HAD CLAIMED RS.1,56,24,449/- UNDER SECTION 8 0-I ON THE BASIS OF THEIR WORKING GIVEN IN ANNEXURE -14 ENCLOSED WITH T HE RETURN OF INCOME 2 FOR MALAMINE PROJECT. IN THE COMPUTATION STATEMENT WHILE CLAIMING THIS DEDUCTION THE ASSESSEE MADE THE FOLLOWING NOTE :- 12. THE COMPANYS NEW PROJECTS NAMELY NYLON 6, COM MENCED PRODUCTION IN 1981, WHILE MELAMINE AND OXO-SYN-GAS IN 1982. THE SAID PROJECTS ARE ELIGIBLE FOR DEDUCTION U/S 80 -I OF I.T. ACT. AFTER CONSIDERING THE PAST LOSSES AND UNABSORBED DE PRECIATION, INVESTMENT ALLOWANCE ETC. OF NYLON-6, THERE WOULD R EMAIN NO INCOME ELIGIBLE FOR DEDUCTION U/S 80-I OF I.T. ACT. HOWEVER, IN RESPECT OF MELAMINE PROJECT THERE IS INCOME AS SHOW N IN ENCLOSED STATEMENT AND IS ELIGIBLE FOR DEDUCTION OF CLAIM OF RS.1,56,24,449/- AS PER ANNEXURE-14 AND ACCORDINGLY DEDUCTION IS CLA IMED WHILE COMPUTING INCOME. THE ASSESSING OFFICER ALLOWED DEDUCTION TO THE ASSE SSEE AFTER ADJUSTING CARRIED FORWARD INVESTMENT ALLOWANCE AMOUNTING TO R S.1,77,82,524/- AND THEREBY THE DEDUCTION CLAIMED BY THE ASSESSEE WAS R EDUCED BY RS.49,02,306/-. THE ASSESSING OFFICER INITIATED PEN ALTY PROCEEDINGS FOR FILING INACCURATE PARTICULARS OF INCOME BY THE ASSE SSEE. THE ASSESSEE IN REPLY THEREBY SUBMITTED THE EXPLANATION THAT THE DE DUCTION HAS BEEN CLAIMED BY THE ASSESSEE UNDER SECTION 80-I ON THE P ROFIT WITHOUT DEDUCTING DEPRECIATION AND INVESTMENT ALLOWANCE ON THE BASIS OF DECISION OF HONBLE ORISSA HIGH COURT IN THE CASE OF CIT VS. TARUN UDHYOG LTD. 191 ITR 688 (ORISSA) AND THAT OF KARNATAKA HIGH COU RT IN THE CASE OF CIT VS. HMT LTD. 199 ITR 235(KARNATAKA) AND THUS THE AS SESSEE WAS UNDER BONA FIDE BELIEF THAT THE ASSESSEE IS ENTITLED FOR THE DEDUCTION UNDER SECTION 80-I WITHOUT SETTING OFF THE BROUGHT FORWAR D INVESTMENT ALLOWANCE. THEREFORE, NO PENALTY SHOULD HAVE BEEN I MPOSED ON THE ASSESSEE. THE ASSESSING OFFICER DID NOT AGREE WITH THE ASSESSEE AND SINCE THE REDUCTION OF THE DEDUCTION UNDER SECTION 80-I W AS CONFIRMED BY THE ITAT, THE ASSESSING OFFICER LEVIED THE PENALTY OF E XCESS CLAIM OF DEDUCTION OF RS.49,02,806/- UNDER SECTION 271(1)(C) AMOUNTING TO 3 RS.26,47,246/- BEING MINIMUM PENALTY LEVIABLE @ 100 % OF THE TAX SOUGHT TO BE AWAITED. WHEN THE MATTER WENT IN APPEA L BEFORE CIT(A), HE DELETED THE PENALTY BY OBSERVING AS UNDER :- 2.8 AFTER GOING THROUGH THE FACTS OF THE CASE I FI ND THAT THE NOTES GIVEN BY THE APPELLANT CLEARLY SHOWS THAT THE CLAIM U/S 80-I FOR THE MELAMINE UNIT WAS WORKED OUT WITHOUT MAKING ADJUSTM ENTS FOR CARRIED FORWARD INVESTMENT ALLOWANCE. THEREFORE, NO FACTS WERE CONCEALED. IT WAS MERELY THAT A VIEW WAS TAKEN THAT THE CLAIM COULD BE ENTERTAINED BASED ON DECISIONS AVAILABLE AT THE TIME. IT IS NOT NECESSARY THAT THE APPELLANT SHOULD HAVE MENTIONED THOSE DECISIONS ALSO WHILE MAKING THE CLAIM. IT IS SUFFICIENT TO ST ATE THAT NO FACTS WERE HIDDEN. IT IS ANOTHER MATTER THAT THE DEPARTME NT TOOK A DIFFERENT VIEW WHICH WAS ULTIMATELY SUSTAINED BY TH E ITAT. HOWEVER, THE FACT REMAINS THAT WHEN THERE IS DIFFER ENCE OF OPINION ON ANY SUBJECT, BUT THE FACTS OF THE ASSESSEES CAS E ARE CLEAR THEN IT CANNOT BE STATED TO BE A QUESTION OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS. IN FACT IN THE PE NALTY ORDERS, IT IS MERELY STATED THAT THE CLAIM WAS WRONG IN VIEW OF D ECISION OF THE APPELLATE AUTHORITIES. THIS HAS BEEN CORRECTLY COUN TERED BY THE DECISION OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF AJAIB SINGH & CO., MENTIONED SUPRA. CONCEALMENT HAS TO BE DELIBERATE AND NOT MERELY BY DENIAL OF A CLAIM BEFORE A PENALT Y CAN BE LEVIED. 2.9 I WOULD, THEREFORE, HOLD THAT IN THE PRESENT C ASE NO INACCURATE PARTICULARS HAVE BEEN FILED OR INCOME CO NCEALED. IT IS MERELY A CLAIM MADE IN THE CIRCUMSTANCES OF THE SIT UATION PREVALENT AT THE TIME OF FILING THE RETURN AND WITH A BONA FIDE BELIEF THAT THE CLAIM WAS GENUINE. HENCE THE PENALTY LEVIE D IS DELETED. 3. BEFORE US THE LD. AUTHORISED REPRESENTATIVE POIN TED OUT THAT IT IS NOT A CASE WHERE THE ASSESSEE HAS SUBMITTED THE INA CCURATE PARTICULARS OF INCOME. THE ASSESSEE HAS CLAIMED DEDUCTION OF BROUG HT FORWARD INVESTMENT ALLOWANCE ON THE BASIS OF DECISION OF HO NBLE ORISSA HIGH COURT IN THE CASE OF CIT VS. TARUN UDHYOG LTD.(SUPR A). THIS DECISION WAS PRONOUNCED ON 2.7.1991. KARNATAKA HIGH COURT ALSO H AD TAKEN SIMILAR VIEW IN THE CASE OF CIT VS. HMT LTD (SUPRA). IT IS ONLY ON 5.3.1997 4 HONBLE SUPREME COURT IN THE CASE OF CIT VS. KOTAGI RI INDUSTRIAL CO-OP. TEA FACTORY LTD. 224 ITR 604 (SUPREME COURT) TOOK T HE VIEW THAT UNABSORBED LOSSES FOR THE EARLIER YEARS ARE TO BE S ET OFF PRIOR TO ALLOWING THE DEDUCTION TO THE ASSESSEE. THE HONBLE TRIBUNAL HAS CONFIRMED THE PENALTY ON THE BASIS OF THE DECISION OF THE HONBLE SUPREME COURT. THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE ASSESS EE WAS ENTITLED FOR THE DEDUCTION UNDER SECTION 80-I WITHOUT SETTING OFF TH E BROUGHT FORWARD INVESTMENT ALLOWANCE. THE ASSESSEE HAS SUBMITTED A NOTE NO.12 MENTIONING CLEARLY HOW HE COMPUTED THE DEDUCTION UN DER SECTION 80-I. THUS THIS IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME . PRIOR TO THE DECISION OF THE HIGH COURT, THERE WAS A DECISION OF THE APPELLATE TRIBUNAL IN THE CASE OF DIGCHEM INDUSTRIE S VS. ITO 27 TTJ 593(JP) DATED 18.11.1986. THE VIEW TAKEN BY THE ASS ESSEE WAS THUS DULY SUPPORTED BY VARIOUS DECISIONS. THUS IT WAS CONTEND ED THAT NO PENALTY SHOULD BE IMPOSED ON THE ASSESSEE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND CONTENDED THAT THE EXPLANATION TO SECTION 271(1)(C) WAS CLEAR LY APPLICABLE IN THE CASE. THE ASSESSEE IS IN VIEW OF THE EXPLANATION FI LED THE INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY ON THE ASSESSEE. THE CIT(A) WAS NOT CORRECT IN DELETING THE PENALTY UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO RELIED ON THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA & OTHER S V. DHARAMENDRA TEXTILE PROCESSORS AND OTHERS (2007) 295 ITR 244(SC ). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES. WE HAVE 5 ALSO GONE THROUGH THE CASE LAWS IN THIS REGARD. SEC TION 271(1)(C) READS AS UNDER :- SEC. 271(1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APP EALS) [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDE R THIS ACT, IS SATISFIED THAT ANY PERSON (A). (B). (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR (D) HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY EXPLANATION -1 WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COM PUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER(APPEAL S) OR THE COMMISSIONER TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND [FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT A LL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM], THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TH E TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. FROM THE PERUSAL OF THE AFORESAID SECTION, IT IS AP PARENT THAT PENALTY U/S 271(1)(C) IS LEVIABLE IF THE ASSESSING OFFICER IS S ATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF THE INCOME. THE PENALTY PROCEEDINGS AND THE ASSESSMENT PROCEEDINGS, BOTH ARE DIFFERENT. EXPLANATION-1 TO SECTION 271(1)(C) S TATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME O F THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RESPECT OF WHICH PART ICULARS HAVE BEEN CONCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE O NE BUT IS REBUTTABLE ONE. IT ONLY SHIFTED THE ONUS ON THE ASSESSEE. EXPL ANATION -1 REFERS TO THE 6 TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALM ENT OF THE PARTICULARS OF INCOME IS DEEMED. THE FIRST SITUATION IS WHERE T HE ASSESSEE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTA L INCOME FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WHICH IS FOUN D BY THE ASSESSING OFFICER OR THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACTS MATERIAL TO TH E COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPL ANATION WAS BONA FIDE ONE AND THAT ALL THE FACTS RELATING TO THE COMPUTAT ION OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESUMPTION AVAILABLE UN DER EXPLANATION TO SECTION 271(1)(C), CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES(A) OR (B). 6. THE ASSESSING OFFICER, WE NOTED IMPOSED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME, HAS NEITHER INITI ATED PENALTY PROCEEDINGS NOR HAS IMPOSED PENALTY FOR CONCEALING PARTICULARS OF THE INCOME. SO FAR AS THE APPLICABILITY OF EXPLANATION -1 IS CONCERNED , AS CONTENDED BY THE LD. DEPARTMENTAL REPRESENTATIVE, IT IS APPLICABLE O NLY FOR THE PURPOSE OF CONCEALING THE PARTICULARS OF INCOME AND NOT FOR FU RNISHING INACCURATE PARTICULARS OF THE INCOME AS IS APPARENT FROM THE P ENALTY ORDER PASSED UNDER SECTION 271(1)(C) . IN THIS CASE PENALTY HAS BEEN IMPOSED BY THE ASSESSING OFFICER FOR FURNISHING INACCURATE PARTICU LARS OF INCOME. THEREFORE, THE ONUS IS ON THE ASSESSING OFFICER TO PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. FROM THE COMPUTATION STATEMENT AS WELL AS THE ANNEXURE ATTACHED THERETO AND THE NOTE THERE- UNDER IT IS APPARENT THAT THE ASSESSEE HAS DULY DIS CLOSED HOW HE HAS CLAIMED THE DEDUCTION UNDER SECTION 80IA. WE ALSO N OTED AT THE TIME WHEN THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 8 0-I THERE WERE CASE LAWS IN FAVOUR OF THE ASSESSEE WHICH HAVE CLEARLY L AID DOWN THAT THE 7 BROUGHT FORWARD INVESTMENT ALLOWANCE IS NOT TO BE S ET OFF FROM THE PROFITS OF THE UNDERTAKING WHILE CLAIMING THE DEDUCTION UND ER SECTION 80-I. IN BOTH THE DECISIONS I.E. IN THE CASE OF CIT VS. TARU N UDHYOG LTD.(SUPRA) AND THAT OF CIT VS. HMT LTD (SUPRA). THE VIEW HAS B EEN TAKEN THAT THE BROUGHT FORWARD INVESTMENT ALLOWANCE NEED NOT BE SE T OFF AGAINST THE PROFITS WHILE COMPUTING THE DEDUCTION UNDER SECTION 80-I. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE TRIBUNAL IN VARIOUS DECI SIONS, THEREFORE, THE CLAIM OF THE ASSESSEE, IN OUR OPINION WAS A BONA FI DE CLAIM SUPPORTED BY THE VARIOUS DECISIONS. EVEN IF THE EXPLANATION TO S EC.271(1)(C) IS NOT ABSOLUTE ONE. AS PER THE EXPLANATION, THE PRIMARY O NUS IS ON THE ASSESSEE BUT ONCE THE ASSESSEE SUBMITS HIS EXPLANATION, THE ONUS GETS SHIFTED TO THE REVENUE TO PROVE THAT THE EXPLANATION SUBMITTED BY THE ASSESSEE IS FALSE. IN THIS CASE, THE ASSESSEE HAS DULY SUBMITTED THE E XPLANATION EVEN HE HAS SUBSTANTIATED HIS EXPLANATION THROUGH THE CASE LAWS AND THE SAME WERE IN HIS FAVOUR AT THE TIME OF MAKING THE CLAIM. THIS IS NOT A CASE WHERE THE EXPLANATION SUBMITTED BY THE ASSESSEE IS FALSE ONE. FOR THIS, IN OUR OPINION NO PENALTY CAN BE IMPOSED ON THE ASSESSEE. SIMILAR VIEW HAS BEEN TAKEN BY THE GUJARAT HIGH COURT IN THE CASE OF NATI ONAL TEXTILES CORPORATION VS. CIT 249 ITR 125 (GUJ), IN WHICH IT WAS HELD - IN ORDER TO JUSTIFY THE LEVY OF PENALTY, TWO FACTO RS MUST CO-EXIST (I) THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO T HE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSES SEES INCOME. IT IS NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOUNT H AS BEEN ASSESSED AS INCOME, AND (II) THE CIRCUMSTANCES MUST SHOW THAT T HERE WAS ANIMUS, I.E. CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACC URATE PARTICULARS ON THE PART OF THE ASSESSEE. EXPLANATION -1 TO SECTION 271(1)(C) HAS NO BEARING ON FACTOR NO.1 BUT HAS A BEARING ONLY ON FA CTOR NO.2. THE EXPLANATION DOES NOT MAKE THE ASSESSMENT ORDER CONC LUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE A SSESSEE. NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE E QUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT C ONCEALED INCOME WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS 8 UNPROVED BUT NOT DISPROVED, I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE T HAT THE ASSESSEES CASE IS FALSE, THE EXPLANATION CANNOT HELP THE DEPARTMEN T BECAUSE THERE WILL BE NO MATERIAL TO SHOW THAT THE AMOUNT IN QUESTION WAS THE INCOME OF THE ASSESSEE. ALTERNATIVELY, TREATING THE EXPLANATION A S DEALING WITH BOTH THE INGREDIENTS (I) AND (II) ABOVE, WHERE THE CIRCUMSTA NCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEE S EXPLANATION IS FALSE, THE ASSESSEE MUST BE HELD TO HAVE PROVED THAT THERE WAS NO MENS REA OR GUILTY MIND ON HIS PART. EVEN IN THIS VIEW OF THE M ATTER THE EXPLANATION ALONE CANNOT JUSTIFY LEVY OF PENALTY. ABSENCE OF PR OOF ACCEPTABLE TO THE DEPARTMENT CANNOT BE EQUATED WITH FRAUD OR WILLFUL DEFAULT. 7. WE ALSO NOTED THAT IN THE CASE OF UNION OF INDIA & OTHERS V. DHARAMENDRA TEXTILE PROCESSORS AND OTHERS (2007) 29 5 ITR 244 (SC), THE APEX COURT HAS HELD AS UNDER ON WHICH THE LD. DEPAR TMENTAL REPRESENTATIVE HAS VEHEMENTLY RELIED :- WE ARE OF THE VIEW THAT THERE IS A CONFLICT OF OPI NIONS BETWEEN THE JUDGMENTS OF THE DIVISION BENCH OF THIS COURT IN TH E CASE OF DILIP N. SHROFF V. JOINT CIT (2007) 8 SCALE 304 ON THE ONE H AND AND ON THE OTHER HAND WE HAVE ANOTHER JUDGMENT OF THIS COURT IN THE CASE OF CHAIRMAN, SEBI VS. SHRIRAM MUTUAL FUND (2006) 5 SCC 361. SECO NDLY, IT MAY BE POINTED OUT THAT THE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1)(C) READ WITH THE EXPLANATION QUOTED ABOVE INDICATES THAT TH E SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF RE VENUE. THE PENALTY UNDER THE SAID SECTION IS A CIVIL LIABILITY. WILLFU L CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING THE CIVIL LIABI LITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT . WHILE CONSIDERING ON APPEAL AGAINST AN ORDER MADE UNDER SECTION 271(1 )(C) WHAT IS REQUIRED TO BE EXAMINED IS THE RECORD WHICH THE OFF ICER IMPOSING THE PENALTY HAD BEFORE HIM AND IF THAT RECORD CAN SUSTA IN THE FINDING THAT THERE HAD BEEN CONCEALMENT, THAT WOULD BE SUFFICIEN T TO SUSTAIN THE PENALTY. KEEPING IN MIND THESE TWO CIRCUMSTANCES, W E ARE OF THE VIEW THAT THE JUDGMENT OF THE DIVISION BENCH IN THE CASE OF D ILIP N. SHROFF VS. JOINT CIT (SUPRA) NEEDS CONSIDERATION. THE EXPLANATIONS A DDED TO SECTION 271(1)(C) IN THEIR ENTIRETY ALSO INDICATE THE ELEME NT OF STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURA TE PARTICULARS WHILE FILING RETURNS. THE JUDGMENT IN DILIP N. SHROFFS C ASE (SUPRA) HAS ALSO NOT CONSIDERED THE PROVISIONS OF SECTION 276C OF THE IN COME-TAX ACT. THEREFORE, IN OUR VIEW, THE JUDGMENT IN THE CASE OF DILIP N. SHROFF VS. 9 JOINT CIT (SUPRA) NEEDS CONSIDERATION BY THE LARGER BENCH OF THIS COURT PARTICULARLY WHEN IT HAS RAMIFICATIONS NOT ONLY REG ARDING THE PROVISIONS OF THE INCOME-TAX ACT BUT ALSO WITH REGARD TO THE P ROVISIONS OF SECTIONS 3A AND 11AC OF THE CENTRAL EXCISE ACT AND RULE 96ZQ (5) OF THE CENTRAL EXCISE RULES. FOR THE AFORESTATED REASONS, WE DIRECT THE REGISTRY TO PLACE OUR ORDER IN THIS BATCH OF CIVIL APPEALS BEFORE THE HONBLE CHIE F JUSTICE OF INDIA FOR APPROPRIATE DIRECTIONS. BEFORE CONCLUDING, WE MAY MENTION THAT IN THE PRESE NT CASES, THE ASSESSEE HAD CHALLENGED THE VIRUS OF RULE 96ZQ(5). BY THE IM PUGNED JUDGMENT, THE GUJARAT HIGH COURT HAS READ DOWN THE SAID RULE INCO RPORATING THE MENS REA REQUIREMENT. IT IS MADE CLEAR THAT IF THE LARGE R BENCH TAKES A VIEW TO SAY THAT THE PENALTY UNDER THE SAID CLAUSE IS MANDA TORY, THEN IT WOULD STILL BE OPEN TO THE ASSESSEE TO CHALLENGE THE VIRUS OF T HE SAID RULE 96ZQ(5) AND, THEREFORE, IN THAT EVENT, THE MATTER HAS TO BE KEPT BEFORE THE DIVISION BENCH FOR PASSING APPROPRIATE ORDERS. 8. IN THE AFORESAID CASE, WE NOTED THAT THE HONBLE SUPREME COURT HAS HELD THAT THE REPORT BEFORE THE ASSESSING OFFICER M UST SPEAK ALL THAT THE ASSESSEE HAS CONCEALED THE INCOME. WE HAVE ALREADY HELD THAT IN THE CASE BEFORE US THERE IS NO MATERIAL OR EVIDENCE WHICH WO ULD PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. IN THIS CASE ASSESSEE HAS MADE THE CLAIM ON THE BASIS OF VARIOUS CASE LAWS WHICH WERE IN HIS FAVOUR AT THE TIME THE ASSESSEE CLAIMED THE DEDUCTION UNDER SECTION 80-I. MAKING THE CLAIM DULY SUPPORTED BY VARIOUS DE CISIONS CANNOT BE REGARDED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THIS JUDGEMENT IN OUR OPINION WILL NOT BE APPLICABL E TO THE FACTS OF THE CASE BEFORE US. 10 9. IN VIEW OF OUR AFORESAID DISCUSSION, WE ARE OF T HE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) I N DELETING THE PENALTY IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C). 10. IN THE RESULT, APPEAL OF THE REVENUE STANDS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 11/12 /2009 SD/- SD/- (H. L. KARWA) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER (NOW VICE PRESIDENT) AHMEDABAD, DATED : 11/12/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD