Mula Pravara Electric Co.op. Society Ltd., Ahmednagar V. Deputy Commissioner of Income-tax,

ITA 457/PUN/2014

• Counselvise Citation: 45724514 RSA 2014
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: S N DOSHI
• Keywords: Principle of natural justice; Bonafide belief; Period of limitation; Difference of opinion; Revised return; Bonafide mistake; Reassessment proceedings
• Section: 143(3); 72(1); 139(5); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 457 / P N/ 20 1 4 ASSESSMENT YEAR : 200 2 - 03 MULA PRAVARA ELECTRIC CO - OP. SOCIET Y LIMITED, BELAPUR ROAD, TAL. - SHRIRAMPUR, AHMEDNAGAR VS. DCIT, AHMEDNAGAR CIRCLE, A HMEDNAGAR (APPELLANT) (RESPONDENT) PAN NO. AAAAT3309A APPELLANT BY: SHRI S.N. DOSHI RESPONDENT BY: SHRI S.K. SINGH DATE OF HEARING : 12 - 05 - 2014 DATE OF PR ONOUNCEMENT : 30 - 05 - 2014 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED O RDER OF THE LD. CIT(A) - IT/TP, PUNE DATED 19 - 12 - 2014 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME - TAX ACT FOR THE A.Y. 2002 - 03 . T HE ASSESSEE HAS TAKEN THE MULTIPLE GROUNDS AND HAS QUESTIONED THE LEGALITY AND VALIDITY OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT DATED 21 - 03 - 2012 FOR THE A.Y. 2002 - 03. THE CO RE ISSUE WHICH ARISES FOR OUR CONSIDERATION IS WHETHER THE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE PENALTY OF RS. 162,54,08,326/ - U/S. 271(1)(C) OF THE ACT ? 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A CO - OPERATIVE S OCIETY WHICH IS ENGAGED IN SUPPLYING ELECTRICITY IN AND AROUND 183 VILLAGES AND T EHSILS OF AHMEDNAGAR DISTRICT IN MAHARASHTRA SINCE 1969 - 70. THE ASSESSEE IS ONE OF THE FIVE PILOT 2 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR PROJECTS UNDERTAKEN BY THE STATE GOVT. UNDER THE ELECTRIC CO - OPERATIVE MOVEM ENT AND ESTABLISHED IN 1969 - 70 UNDER THE PROJECT SPONSORED BY USAID IN COLLABORATION WITH NRECA THROUGH RURAL ELECTRIFICATION CORPORATION LIMITED (IN SHORT RECL). THE ASSESSEE PURCHASE S ELECTRICITY FROM THE MAHARASHTRA STATE ELECTRICITY BOARD (MSEB) AND DISTRIBUTE S TO THE CUSTOMERS IN THE EARMARKED AREA. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2002 - 03 DECLARING LOSS OF RS.59,61,16,520/ - . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AND MADE THE ADDITION OF RS.541,80,37,753/ - U/S. 41(1) O F THE INCOME - TAX ACT WHICH WAS TOWARDS THE REDUCTION OF LIABILITY OF MSEB DUE TO THE RELIEF GIVEN BY THE GOVT. OF MAHARASHTRA BY DETERMINING THE VIABLE T ARIFF FOR THE PERIOD OF 1977 - 78 TO 199 9 - 2000. AFTER GIVING THE BENEFIT OF SET OFF OF BROUGHT FORWARD L OSSES AND OTHER ADJUSTMENT S, THE ASSESSING OFFICER FINALLY ASSESSED THE ASSESSEES INCOME AT RS.260,82,24,399/ - . 3. IT IS PERTINENT TO NOTE HERE THAT THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER FOR MAKING THE ADDITION U/S. 41(1) OF THE A CT TOWARDS THE REDUCTION IN THE LIABILITY OF THE MSEB WHICH WAS CONFIRMED BY THE LD. CIT(A) AND THEREAFTER BY THE TRIBUNAL ALSO. THE ASSESSEE MOVED THE MISCELLANEOUS APPLICATION U/S. 254(2) FOR GETTING THE RELIEF OF RS.36.53 CRORES WHICH AS PER THE ASSESS EE THE SAID AMOUNT WAS ALREADY DECLARED IN THE A.Y. 2000 - 01 AND SAID M.A. WAS ALLOWED BY THE TRIBUNAL . THE TRIBUNAL REC ALLED THE ORDER PASSED IN ITA NO. 1308/PN/2010 AS ONE OF THE CONTENTION S/ GROUND S WAS NOT ADJUDICATED. IT WAS THE CONTENTION OF THE ASSE SSEE THAT THE ASSESSEE SOCIETY HAS CONSISTENTLY INCURRED THE LOSSES AND THERE WAS NO PROFIT AND ALL THE LOSSES HAD LAPSED AS THE ASSESSEE COULD NOT SET OFF THE SAME U/S. 72(1) OF THE ACT DUE TO PERIOD OF LIMITATION AND HENCE, THERE WAS NO TAX BENEFIT TO TH E ASSESSEE TO INVOKE SEC. 41(1) OF THE ACT. THE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE THAT TO THE EXTENT OF LOSSES WHICH WERE SPECIFICALLY PERTAINING TO THE RELIEF GIVEN BY THE GOVT. IN THE RESPECTIVE YEARS SHOULD NOT BE TREATED 3 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR AS A CESS ATION OF THE LIABILITY OR ACCRUAL OF THE BENEFIT WITHIN THE MEANING OF U/S. 41(1) OF THE ACT. THE TRIBUNAL ALLOWED THE SAID GROUND OF THE ASSESSEE IN ITA NO. 1308/PN/2010 VIDE ORDER DATED 31 - 05 - 2013. THE ASSESSING OFFICER PASSED THE ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL BY WORKING OUT THE RELIEF TO THE EXTENT OF RS.139,35,75,305/ - AND DETERMINED THE REVISED TOTAL LOSS AT RS. ( - ) 66,44,43,348/ - AS AGAINST THE TOTAL INCOME OF RS.72,91,31,957/ - WHICH WAS DETERMINING IN COMPLIANCE WITH THE TRIBUNAL ORDER D ATED 17 - 09 - 2012. 4. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS ON THE CHARGE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.541.80 CRORES WITHIN THE MEANING OF SEC. 271(1)(C) OF THE INCOME - TAX ACT. IT IS PERTINENT TO NOTE HERE THAT SO FAR AS THE A.Y. 2002 - 03 IS CONCERNED THE ASSESSEE HAS NOT CREDITED THE SAME AMOUNT TO THE PROFIT AND LOSS ACCOUNT BUT GAVE THE DIRECT EFFECT IN THE BALANCE SHEET. THE ASSESSING OFFICER INITIATED THE PROCEEDINGS U/S. 147 A GAINST THE ASSESSEE AND ISSUED THE NOTICE U/S. 148 OF THE INCOME - TAX ACT AND BROUGHT TO TAX RS.541.80 CRORES IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.162,54,08,326/ - U/S. 271(1)(C) OF THE ACT VIDE ORDER DATED 21 - 03 - 2012 . THE TRIBUNAL HAS ALREADY GIVEN RELIEF TO THE ASSESSE OUT OF THE ADDITION OF RS. 541.80 CRORES MADE BY THE ASSESSING OFFICER U/S. 41(1) OF THE ACT TO THE EXTENT OF RS.36,53,65,905/ - WHICH WAS DECLARED BY THE ASSESSEE IN THE A.Y. 2000 - 01 AND FURTHER RELIEF OF RS.139,35,75,305/ - . IN SUM AND SUBSTANCE THE ASSESSEE COULD GET THE TOTAL RELIEF TO THE EXTENT OF RS.175.89 CRORES. AS PER THE ORDER PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL U/S. 254 OF THE INCOME - TAX ACT DATED 16 - 08 - 2013. 5. THE LD. CIT(A) CONFIRMED THE PENALTY ORDER. IT APPEARS THAT THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER. THE ASSESSEE TOOK THE MULTIPLE CONTENTIONS BEFORE THE LD. CIT(A) INCLUDING 4 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR HIS CONTENTIONS SINCE THE ASSESSME NT PROCEEDINGS THAT EVEN IF SEC. 41(1) IS TO BE INVOKED THEN THE A.Y. 2002 - 03 IS NOT A CORRECT ASSESSMENT YEAR BUT AT THE MOST A.Y. 2000 - 01 IN WHICH THE GOVT. RESOLUTION WAS ISSUED . THE LD. CIT(A) REJECTED ALL THE CONTENTIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER ON PRINCIPLE BUT DIRECTED THE ASSESSING OFFICER TO REWORK THE PENALTY AFTER CONSIDERING THE ORDERS OF THE CIT(A) AND THE TRIBUNAL IN QUANTUM PROCEEDINGS . THE OPERATIVE PART OF THE FINDINGS OF THE LD. CIT(A) IS AS UNDER: 2.3.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ARGUMENTS OF THE LEARNED AO AND OF THE APPELLANT. BEFORE I DISCUSS MY CONCLUSION, IT MAY BE NECESSARY TO SUMMARIZE THE FACTS OF THE CASE, WHICH ARE AS UNDER: 2.3.4 THE GOVERNMENT OF MAHA RASHTRA ISSUED THE GOVERNMENT RESOLUTION (GR) DATED 21.05.1999, WHICH STATED THAT THE APPELLANT WAS DISTRIBUTING ELECTRICITY ON HORSEPOWER BASIS (HP), WHICH WAS FINANCIALLY UNVIABLE, AS 'AGAINST THIS, THE GOVERNMENT HAS WORKED OUT A VIABLE RATE, WHICH WAS TO BE APPLIED FOR THE ELECTRICITY PURCHASED BY THE APPELLANT SOCIETY FROM THE MSEB FROM FY 1977 - 78 ONWARDS. THIS DECISION RESULTED INTO THE REDUCTION OF THE APPELLANT SOCIETY'S LIABILITY TOWARDS MSEB ON ACCOUNT OF ELECTRICITY UNITS, DPC AND INTEREST. IN C ONSEQUENCE OF THE GR, THE APPELLANT'S LIABILITIES PAYABLE TO MSEB WAS REDUCED BY RS.541,80,37,753. THE MSEB VIDE LETTER DATED 23.05.2001 INFORMED THE APPELLANT THAT THE ELECTRICITY TARIFF FOR THE PERIOD APRIL 1977 TO APRIL 2000 WAS REVIEWED RESULTING INTO REDUCTION OF ARREARS PAYABLE TO THE MSEB. 2.3.5 THE APPELLANT FILED THE REVISED RETURNS FROM AY 1995 - 96 TO AY 2001 - 02 ON 27.12.2002. THE REVISED RETURNS FROM AY 1995 - 96 TO AY 2000 - 01 WERE INVALID AS WERE FILED BEYOND TIME. THE APPELLANT'S CONTENTION IS TH AT THE LIABILITY WAS CEASED IN THE AY 2000 - 01 AND IN THE YEARS TO WHICH, THE REMISSION IS RELATED TO. BASED ON THIS LEGAL UNDERSTANDING, THE APPELLANT FILED REVISED RETURNS FOR THE ABOVE MENTIONED YEARS, WHEREAS THE LEARNED AO'S VIOV/ WAS THE CESSATION OF LABILITY U/S 41(1) WAS TAXABLE IN THE AY 2002 - 03. THIS VIEW IS CONFIRMED BY THE HONOURABLE TRIBUNAL. 2.3.6 THE APPELLANT'S ARGUMENTS AGAINST THE LEVY OF THE PENALTY ARE SUMMARIZED AS UNDER: 5 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR A) THE PENALTY ORDER HAS BEEN PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AS ADEQUATE OPPORTUNITY TO DEFEND ITSELF WAS NOT PROVIDED BY THE LEARNED AO DURING THE PENALTY PROCEEDINGS. B) THE RE - OPENING OF THE ASSESSMENT ITSELF IS INVALID AS THE LEARNED AO DID NOT FURNISH THE COPY OF THE REASONS RECOR DED FOR REOPENING OF THE ASSESSMENT, HENCE THE CONSEQUENT PENALTY ORDER IS ALSO NOT VALID. C) THE LEARNED AO HAS NOT DISCHARGED ONUS OF PROVING THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME BECAUSE IT HAD FULLY DISCLOSED ALL THE PARTI CULARS OF INCOME AND THERE IS NO QUESTION OF FURNISHING INACCURATE PARTICULARS OF INCOME. D) EXPLANATION 1 TO SEC 271(1)(C) CANNOT BE INVOKED FOR FURNISHING INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES DEEMING FICTION ON CONCEALMENT OF INCOME. THER EFORE, IT CANNOT BE EXTENDED TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY IS LEVIED ON INCORRECT CHARGE OF FILING INACCURATE PARTICULARS OF INCOME AND HENCE IS INVALID. E) THE CONDITIONS OF EXPLANATION (1) TO SECTION 271(1)(C) ARE NOT SA TISFIED. F) PENALTY CANNOT BE LEVIED MERELY BECAUSE THERE IS A DIFFERENCE OF OPINION OR BECAUSE THE ISSUE IS DEBATABLE AND WHEN THE APPELLANT'S VIEW IS BONA FIDE. G) THE LEARNED AO HAS TAKEN CONTRADICTORY POSITION BY ASSESSING PART OF THE REMISSION IN AY 2000 - 01 AND PART IN AY 2002 - 03, THIS SHOWS THAT THE ISSUE IS DEBATABLE. H) PENALTY CANNOT BE LEVIED MERELY BECAUSE THE CLAIM MADE BY THE APPELLANT IS NOT SUSTAINED BY THE LEARNED AO. 2.3.7 IN VIEW OF THE ABOVE, IT IS TO BE DECIDED AS TO WITH RESPECT TO THE ADDITION CONFIRMED BY THE TRIBUNAL, WHETHER PENALTY LEVIED BY THE LEARNED AO IS SUSTAINABLE OR NOT? IT IS FUNDAMENTAL THAT THE PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND ADDITION MADE IN THE ASSESSMENT ORDER WOULD NOT RESULT AUTOMATICALLY IN TO LEVYING OF PENALTY UNLESS THE CONDITIONS PROVIDED 6 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR U/S 271(1)(C) ARE SATISFIED. IN THIS CONNECTION, IT MAY BE NECESSARY TO EXAMINE THE RELEVANT PROVISIONS OF THE SECTION 271(1)(C), WHICH IS REPRODUCED AS UNDER: (1) IF THE ASSESSING OFFIC ER OR THE [COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON - (A) ........ (B) ........ (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULA RS OF [SUCH INCOME, OR] (D) ......... [EXPLANATION 1. - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFICER OR THE [***] [COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE PURPOSE OF CLAUSE (C) OF THI S SUB - SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 2.3.8 THE ABOVE PROVISION SHOWS THAT THE PENALTY CAN BE LEVIED EITHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS O F INCOME. IN THIS CASE, THE LEARNED AO HAS LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, IT IS TO BE CONSIDERED HERE AS TO WHETHER THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR NOT AND IF NECESSARY ALSO IN THE LIGHT OF EXPLANATION TO SECTION 271(1)(C). IT IS SETTLED THAT, ONUS OF PROOF IS SHIFTED TO THE ASSESSEE AFTER INSERTION 7 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR OF THE EXPLANATION. PENALTY WOULD BE LEVIED IF THE ASSESSEE OFFERS NO EXPLANATION OR HIS EXPLANATION IS FOUND TO BE FALSE. HOWEVER, PEN ALTY CANNOT BE LEVIED IF THE ASSESSEE OFFERS AN EXPLANATION AND IF PLACES ALL THE FACTS AND MATERIAL RELATING TO THE ADDITION, EVEN IF HE FAILS TO SUBSTANTIATE AND PROVE HIS EXPLANATION, WHICH IS BONA FIDE. 2.3.9 THE APPELLANT'S EXPLANATION IS THAT IT WAS UNDER THE BONAFIDE VIEW THAT THE REMITTED AMOUNT IS TAXABLE IN THE AY 2000 - 01 AND IN THE YEARS TO WHICH REMISSION OF TARIFF RELATE TO. ACCORDINGLY, IT FILED REVISED RETURNS OF THE SIX YEARS. I HAVE CONSIDERED THE APPELLANT'S EXPLANATION. I DO NOT FIND THI S EXPLANATION TO BE BONAFIDE FOR TWO REASONS. FIRSTLY, IN ORDER TO CONSIDER ANY EXPLANATION TO BE BONAFIDE, THE APPELLANT SHOULD HAVE DEMONSTRATED ME BASIS ON WHICH, IT HOLDS SUCH A VIEW. MERELY BY STATING THE EXPLANATION IS BONAFIDE CANNOT MAKE THE EXPL ANATION BONAFIDE, IF THE BASIS OR SURROUNDING CIRCUMSTANCES FOR HOLDING SUCH VIEW IS NOT DEMONSTRATED. THE APPELLANT HAS STATED THAT THE LIABILITY IS SPREAD TO EACH OF THE PRIOR YEARS FROM AY 200 - 01 TO AY 1995 - S6. HOWEVER, THE APPELLANT HAS NOT FURNISHED ANY LEGAL PROVISION OR JUDICIAL DECISIONS ON THE BASIS OF WHICH, IT HELD SUCH A VIEW AND DECIDED TO SPREAD REMISSION OVER YEARS. 2.3.10 SECONDLY, PROVISIONS OF SECTION 41(1) ARE CLEAR THAT IT TAXES THE AMOUNT IN THE YEAR OF CESSATION OF LIABILITY. ACCORDIN G TO THE APPELLANT'S OWN VIEW, THE RELEVANT EVENT FOR THE CESSATION OF LIABILITY WAS THE GR ISSUED BY THE GOVERNMENT OF MAHARASHTRA DATED 21.05.1999. THEREFORE, ACCORDING TO ITS OWN UNDERSTANDING OF LAW, THE APPELLANT SHOULD HAVE DISCLOSED THE ENTIRE REMIS SION OF LIABILITY AS INCOME IN THE 2000 - 01 AND NOT IN THE ANY OF TE PREVIOUS YEARS AS DONE BY IT. HOWEVER, IT CHOSE TO INTERPRET DIFFERENTLY NOT CONSISTENT WITH ITS OWN UNDERSTANDING OF APPLICABILITY OF SECTION 41(1) BY SPREADING INCOME OVER NUMBER OF YEAR S. THEREFORE, THE' APPELLANT'S EXPLANATION IS NOT BONAFIDE FROM ITS OWN CONDUCT AND AS STATED ABOVE, 'IT HAS NOT SUBSTANTIATED ITS EXPLANATION AS TO ON WHAT BASIS IT HOLDS SUCH A VIEW THAT IT IS NOT TAXABLE IN AY 2002 - 03. THE APPELLANT HAS STATED THAT IT D EVELOPED UNDERSTANDING SUBSEQUENT TO THE FILING OF REVISED RETURNS. I DO NOT FIND THIS ARGUMENT TO BE RELEVANT BECAUSE ACCORDING TO SECTION 41(1), THE CESSATION OF LIABILITY TAKES PLACE IN A YEAR OF EVENT OF CESSATION OF LIABILITY AND NOT OVER 8 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR NUMBER OF YE ARS. THEREFORE, THERE IS NO CASE FOR FILING REVISED RETURNS OF THE EARLIER YEARS. 2.3.1 1 THE APPELLANT HAS STATED THAT IT HAS DISCLOSED ALL PARTICULARS OF INCOME IN THE RETURN OF INCOME. I DISAGREE WITH THE APPELLANT THAT THIS IS THE CASE OF NOT FILING IN ACCURATE PARTICULARS OF INCOME. THIS IS BECAUSE ACCORDING TO LAW, PARTICULARS OF IN - SOME SHOULD HAVE BEEN OF THE INCOME INCLUDING INCOME RECEIVED ON CESSATION OF LIABILITY U/S 41(1). HOWEVER, BY OMITTING TO DISCLOSE THE INCOME FROM CESSATION OF LIABILITY I N THE PROFIT AND LOSS ACCOUNT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 41(1), THE APPELLANT HAS FILED INCOMPLETE AND HENCE INACCURATE PARTICULARS OF INCOME. 2.3.12 IT MAY BE MENTIONED THAT THE CHARGE OF CONCEALMENT CANNOT BE LEVIED ON THE APPELLANT AS IT HAS DISCLOSED THE AMOUNT IN BALANCE SHEET; THEREFORE, AS STATED ABOVE, OMISSION OF INCLUDING CERTAIN INCOME ALSO RESULTS IN FILING INACCURATE OR INCOMPLETE PARTICULARS OF INCOME. FROM THIS PERSPECTIVE, ALL THE CASES OF CONCEALMENT ARE ALSO OF FURNISHING OF INACCURATE PARTICULARS OF INCOME, HOWEVER, REVERSE IE FURNISHING OF INACCURATE PARTICULARS OF INCOME AMOUNTING TO CONCEALMENT NEED NOT BE TRUE. 2.3.13 THE APPELLANT HAS VEHEMENTLY ARGUED THAT THE CORRECT YEAR OF TAXABILITY OF THIS INCOME IS AY ,2000 - 01 , BASED ON THE DATE OF ISSUE OF THE GR. HOWEVER, I CONSIDER THAT THE GR MERELY CONVEYED THE GOVERNMENT'S POLICY DECISION TO REMIT THE LIABILITY. HOWEVER, THE ACTUAL REMISSION OF LIABILITY HAS HAPPENED ONLY ON RECEIPT OF THE ORDER OF THE MSEB DATED 23.05.20 01. THE AMOUNT OF ARREARS TO BE WRITTEN OFF WAS DETERMINED ON THE BASIS OF THE ORDER OF THE MSEB DATED 23.05.2001. THIS EXPLAINS THAT THE DATE OF FILLING OF REVISED RETURNS OF 27.12.2002. HAD THE APPELLANT GENUINELY HELD THE VIEW OF LIABILITY GETTING CEASE D IN AY 2000 - 01 IN CONSEQUENCE TO GR ISSUED IN 1999, THE APPELLANT WOULD HAVE FILED REVISED RETURNS OF AY 1995 - 96 TO AY 2000 - 01 IN THE YEAR 1999 OR IN THE YEAR 2000 ITSELF/BUT NOT IN THE YEAR 2002. EVEN OTHERWISE, THE APPELLANT COULD NOT HAVE FILED REVISED RETURNS IN THE YEAR 1999 OR YEAR 2000 IN ABSENCE OF QUANTIFICATION OF REMISSION AMOUNT, WHICH WAS WORKED OUT IN 2001 IN CONSEQUENCE TO MSEB ORDER. THEREFORE, 'THE APPELLANT'S CONDUCT IS NOT CONSISTENT WITH ITS EXPLANATION AND THEREFORE, THE APPELLANT'S EX PLANATION IS NEITHER BONAFIDE NOR IS SUBSTANTIATED BY IT. 9 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR 2.3.14 THE APPELLANT HAS STATED THAT THE PENALTY CANNOT BE LEVIED WHEN THE ISSUE IS DEBATABLE OR MERELY BECAUSE THE APPELLANT'S BONAFIDE VIEW WAS NOT ACCEPTED BY THE LEARNED AO BECAUSE OF THE DIFF ERENCE OF OPINION. I AGREE WITH THIS ESTABLISHED LEGAL PROPOSITION. HOWEVER, THIS PROPOSITION IS NOT APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. AS SLATED ABOVE, THE APPELLANT'S EXPLANATION IS NOT BONAFIDE IN ABSENCE OF THE DEMONSTRATION OF BASIS ON WHICH HELD SUCH A VIEW AND SECONDLY, WHEN LEGAL PROVISION OF SECTION 41(1) IS CLEAR, ITS INTERPRETATION CANNOT HE CONSIDERED DEBATABLE. THIRDLY, WHEN THE HONOURABLE ITAT HAS CONFIRMED THAT THE YEAR OF TAXABILITY U/S 41(1) WAS AY 2C02 - 03, THERE CANNOT BO A NY POSSIBILITY OF ENTERTAINING DIFFERENT POINT OF VIEW, WHEN THE FINAL FACT FINDING AUTHORITY I.E. HONOURABLE TRIBUNAL HAS HELD THAT THE CESSATION OF LIABILITY IN THIS CASE TOOK PLACE IN THE AY 2002 - 03. IN VIEW OF - THE ABOVE, THE CASE - LAWS RELIED ON BY THE APPELLANT HOLDING THAT PENALTY CANNOT BE LEVIED MERELY BECAUSE THERE WERE TWO POSSIBLE VIEWS OR THERE WAS ABSENCE OF DUE CARE ON PART OF THE APPELLANT OR BONAFIDE INADVERTENT ERROR ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 2.3.15 THE APPELLANT HAS RELI ED ON THE DISCLOSURE MADE BY IT IN THE AUDIT REPORT. THE APPELLANT HAS ALSO RELIED ON THE DISCLOSURE MADE BY IT ON THE BASIS OF THE NOTE ATTACHED TO THE RETURN OF INCOME. THIS NOTE IS REPRODUCED AS UNDER: THE ASSESSEE IS THE REGISTERED CO - OP, SOCIETY AND C ARRIES ON THE BUSINESS OF SUPPLYING ELECTRICITY. IT DISTRIBUTES THE ELECTRIC ENERGY IN 183 VILLAGES OF SHRIRAMPUR, RAHURI TALUKA FULLY AND NEVASA AND SANGAMNER AND RAHATA TALUKA PARTLY. FOR CERTAIN REASONS BEYOND THE CONTROL OF THE SOCIETY THERE HAVE BEEN HUGE LOSSES INCURRED BY THE SOCIETY. IT PURCHASES THE ELECTRICITY FROM MAHARASHTRA STATE ELECTRICITY BOARD. FOR CERTAIN REASONS THE ASSESSEE SOCIETY COULD NOT PAY OFF THE ELECTRICITY BILL RAISED BY MSEB. THEREFORE IN ORDER TO ENABLE THE SOCIETY TO CARRY ON ITS BUSINESS ABLY THE GOVERNMENT OF MAHARASHTRA ITS NOTIFICATION DATED 21.05.1999 RECALCULATED THE AMOUNT OF ELECTRICITY BILL AND AS A RESULT OF SUCH RECALCULATION THE MSEB HAD TO REDUCE ITS DUES BY RS.505,90,17,276 FROM THE ORIGINAL BILLS RAISED FOR THE FY 1977 - 78 TO 2000 - 2001. THE YEAR WISE DETAILS OF REDUCTION IN 10 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR THE BILLS ARE ACCORDINGLY WORKED OUT AND THE CHART SO PREPARED IS ENCLOSED HEREWITH. THIS REDUCTION IN BILLS HAS BEEN ADJUSTED TO THE RETURNED / ASSESSED INCOME OR LOSS OF THE A Y 1978 - 79 TO 20 01 - 2002. AS A RESULT OF THIS ADJUSTMENT OF THE AMOUNT REDUCTION IN BILLS THE INCOME OF THE A Y 1978 - 79 TO 1994 - 95 HAVE BEEN RECOMPUTED. THESE DETAILS SHOW THAT THERE IS POSITIVE INCOME FOR ALL THESE A YEARS UP TO 1994 - 95. AS THIS PERIOD FALLS BEYOND SIX YE ARS PRIOR TO A Y 2001 - 02 THE INCOME SO RECOMPUTED NOW CANNOT BE TAXED. HOWEVER THE RECOMPUTED INCOME FOR THE A YEARS 1995 - 96 IS TAXABLE AND THERE BEING LOSS FOR THE A Y 1996 - 97 ONWARD THERE IS NO TAX LIABILITY. THE ASSESSE SOCIETY HAS THEREFORE FILED THE R EVISED RETURNS SHOWING THE RECOMPUTED INCOME FOR A YEARS 1995 - 96 TO 2001 - 02. FOR THE A Y 1995 - 96 THE ASSESSE SOCIETY IS LIABLE TO PAY TAX OF RS.1,29,65,631. HOWEVER THERE BEING ACUTE FINANCIAL CRUNCH THE SOCIETY HAS NOT BEEN ABLE TO PAY ANY TAX AND THEREF ORE THE SAID RETURN IS FILLED WITHOUT MAKING THE SELF ASSESSMENT PAYMENT OF THE TAX DETERMINED. 2.3.16 THE PERUSAL OF THE ABOVE STATED NOTE AND THE DISCLOSURE MADE IN THE AUDIT REPORT SHOW THAT THERE IS NO REFERENCE TO THE MAIN EVENT OF THE ORDER ISSUED B Y THE MSEB DATED 23.05.2001. ON THE BASIS OF WHICH, THE HONOURABLE ITAT HAS HELD THAT YEAR OF TAXABILITY U/S 41(1) IS - AY 2002 - 03. IN VIEW OF THIS, IT CAN BE STATED THAT THE APPELLANT DID NOT DISCLOSE ALL THE FACTS RELATING TO AND MATERIAL TO COMPUTATION OF TOTAL INCOME. 2.3.17 THE APPELLANT HAS CHALLENGED VALIDITY OF THE ASSESSMENT ON THE BASIS OF THE FACT THAT THE REASONS OF REOPENING THE ASSESSMENT WERE NOT FURNISHED TO IT. THEREFORE, THE RE - ASSESSMENT IS INVALID AND CONSEQUENTLY PENALTY CANNOT BE LEVIE D. IN THIS CONNECTION, I FIND THAT THE HONOURABLE TRIBUNAL HAS HELD THAT RE ASSESSMENT TO BE VALID AND AS SUCH I AM NOT EMPOWERED TO ADJUDICATE THE ISSUES RELATING TO THE ASSESSMENT ORDER WHILE ADJUDICATING THE LEARNED AO'S PENALTY ORDER. 2.3.18 THE APPE LLANT HAS ALSO ARGUED THAT THE PENALTY IS LEVIED ON INCORRECT CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF 11 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR INCOME WHILE EXPLANATION 1 CAN ONLY BE INVOKED FOR CONCEALMENT. I HAVE CONSIDERED THE APPELLANT'S ARGUMENTS ON THE INTERPRETATION OF LAW PRIOR T O THE DECISION IN THE CASE OF KP MADHUSADAN V CIT251 ITR 99 (SC), IN WHICH THE HONOURABLE SC HELD THAT THE EXPLANATION IS INTEGRAL PART OR THE SECTION AND IT NEED NOT BE SEPARATELY INVOKED. FURTHER, THE FIVE MEMBER BENCH OF THE HONOURABLE SUPREME COURT HAS HELD IN THE CASE OF THAT HAZARIMAL KUTHIALA V ITO(1961) 41 ITR 12 (SC) INVOKING OF WRONG PROVISIONS OF LAW. WILL NOT MAKE TRRE ORDER INVALID AS LONG AS THE AO HAS JURISDICTION TO ASSESSEE THE INCOME. THEREFORE, EVEN FOR A MOMENT IT IS PRESUMED THAT THE LE ARNED AO HAS INVOKED INCORRECT CHARGE, SUCH ERROR WILL NOT BE FATAL TO THE SURVIVAL OF PENALTY ORDER. HENCE, I DISMISS THIS ARGUMENT OF THE APPELLANT. 2.3.19 THE APPELLANT RELIED ON THE DECISION OF RAJ TRADING COOT RAJASTHAN HIGH COURT TO ARGUE THAT EXPLA NATION 1 TO SECTION 2 71(1)(C) IS APPLICABLE ONLY TO THE CHARGE OF CONCEALMENT AND CANNOT BE INVOKED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. I HAVE GONE THROUGH THE JUDGEMENT RELIED ON BY THE APPELLANT. I COULD NOT FIND THE PROPOSITION RELIED ON BY THE APPELLANT TO BE LAID DOWN BY THE HONOURABLE COURT IN THE CASE CITED BY THE APPELLANT. ACCORDING TO MY UNDERSTANDING, HONOURABL HIGH COURT HAS LAID DOWN THE PRINCIPLE OF THE LAW THAT THE BASIC REQUIREMENT OF EXPLANATION TO SECTION 271(1)(C) IS TO DISCH ARGE INKIER BURDEN BY ASSESSEE TO PROVE THAT CONCEALMENT OF INCOME WAS NOT ON ACCOUNT OF FRAUD OR WILLFUL NEGLIGENCE ON HIS PART. FURTHER, THE PRESENCE OF DELIBERATE BEHAVIOUR OR WILFUL DEFAULT NECESSARY FOR LEVYING PENALTY U/S 271(1)(C) HAS BEEN OVERRULED BY THE HONOURABLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSOR'S CASE. ACCORDINGLY, I DISMISS THIS ARGUMENT OF THE APPELLANT. 2.3.20 THE APPELLANT HAS ALSO STATED THAT THE LEARNED AO HAS ASSESSED PART OF THE REMISSION IN AY 2000 - 01 AND OTHE R PART IN AY 2002 - 03, HENCE THIS ACTION ITSELF SHOWS THAT THE ISSUE IS DEBATABLE AS DIFFERENT INTERPRETATIONS ARE POSSIBLE ON THE YEAR OF TAXABILITY OF REMISSION. I FIND THIS ARGUMENT WITHOUT MERIT AS THE THERE WAS NO ORDER U/S 143(3) IN AY 2000 - 01, BUT TH E RETURN WAS ACCEPTED U/S 143(1). FURTHER, WHEN THE LEARNED - AO INITIATED THE REASSESSMENT PROCEEDINGS IN THE YEAR 2008, REOPENING AY 2001 - 02, WAS BARRED BY STATUTORY LIMITATION. 12 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR 2.3.21 THE APPELLANT HAS ALSO RAISED THE ISSUE OF INVALIDITY OF THE PENALTY O RDER IN ABSENCE OF PROVIDING OF ADEQUATE OPPORTUNITY TO IT FOR DEFENDING ITS CASE DURING THE PENALTY PROCEEDINGS. I DO NOT CONSIDER THIS OBJECTION MATERIAL AS THIS OPPORTUNITY WAS PROVIDED TO THE APPELLANT DURING THE APPELLATE STAGE BEFORE ME AND ALSO BEFO RE THE LEARNED AO BY CALLING A REMAND REPORT FROM HIM ON THE APPELLANT'S SUBMISSION. THEREFORE, I DISMISS THIS ARGUMENT OF THE APPELLANT. 2.3.22 IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT ALL THE CONDITIONS OF EXPLANATION 1(B) ARE SATISFIED AND PENALTY U/S 271(1)(C) IS LEVIABLE IN THIS CASE. ACCORDINGLY, I CONFIRM THE PENALTY LEVIED U/S 271(1)(C). HOWEVER, AS FAR AS THE QUANTUM OF PENALTY IS CONCERNED, THE AMOUNT OF ADDITION HAS UNDERGONE CHANGE AFTER THE ORDERS OF THE CIT(A) AND OF THE ORDER OF THE HON OURABLE TRIBUNAL. THEREFORE, THE LEARNED AO IS DIRECTED TO WORK OUT THE PENALTY AMOUNT ON THE FINAL AMOUNT OF ADDITION ARRIVED AT AFTER GIVING EFFECT TO THE ORDER OF CIT(A) AND OF THE HONOURABLE TRIBUNAL. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD . COUNSEL SUBMITS THAT THE ASSESSEE SOCIETY IS ONE OF THE PILOT PROJECTS IN THE RURAL ELECTRIFICATION TH ROUGH THE CO - OPERATIVE MOVEMENT SUPPORTED BY THE GOVT. OF MAHARASHTRA. THE ASSESSEE SOCIETY IS PURCHASING THE POWER AND SELLING THE SAME TO THE CONSUME RS IN THE NOTIFIED RURAL AREA. HE SUBMITS THAT THE ASSESSEE SOCIETY CONSISTENTLY INCURRED THE LOSSES DUE TO VAST DIFFERENCE IN THE PRICE PAID FOR PURCHASING THE POWER FROM THE MSEB AND SELLING PRICE TO THE CONSUMERS MORE PARTICULARLY THE AGRICULTURE. THE ASSESSEE MADE THE REPRESENTATION AND ALSO CONVINCED THE GOVT. OF MAHARASHTRA THAT THE RATES ARE NOT VIABLE AS THERE IS A VAST DISPARITY IN THE PURCHASE PRICE OF THE POWER AND THE T ARIFF AT WHICH THE BILLING IS MADE TO ULTIMATE CONSUMER AND GOVT. ISSUED TH E GR ON 21 - 05 - 1999 AND GAVE RELIEF TO THE ASSESSEE SOCIETY BY FINALIZING VIABLE T ARIFF. HE SUBMITS THAT IN THE A.Y. 2002 - 03, THE ASSESSEE HAS MERELY WRITTEN OFF OF THE LIABILITY TO THE EXTENT OF RS.541.80 CRORES BUT IN FACT THE ASSESSEE GOT THE RELIEF IN THE F.Y. 1999 - 2000 WHEN 13 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR THE GOVT. RESOLUTION WAS ISSUED DATED 21 - 05 - 1999 , DETERMINING THE VIABLE T ARIFF . THE LD. COUNSEL REFERS TO THE COPY OF THE GOVT. RESOLUTION DATED 21 - 05 - 1999 PLACED AT PAGE NOS. 30 TO 50. HE SUBMITS THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DISTINCT PROCEEDINGS AND EVEN IF THE HON'BLE TRIBUNAL HAS CONFIRMED THE ADDITION O N PRINCIPLES IN THE A.Y. 2002 - 03 BUT IN THE PENALTY PROCEEDINGS THE ASSESSEE CAN TOOK THE CONTENTION THAT SEC. 41(1) CANNOT BE INVOKED IN A.Y . 2002 - 03 AS ADMITTEDLY THE GOVT. RESOLUTION IS IN THE F.Y. 1999 - 2000. HE SUBMITS THAT ONLY THE WORKING OF THE ARREARS WAS DONE BY THE MSEB VIDE LETTER DATED 16 - 05 - 2001 WHICH IS ONLY ARITHMETICAL WORK. H E REFERRED TO THE COPY PLACED IN COMPILATION AT PAG E NO. 25 OF THE PAPER BOOK. HE SUBMITS THAT THE PREVIOUS ARREARS FOR THE PERIOD APRIL, 1977 TO MARCH, 2001 ARE SHOWN IN THE BILL OF THE MSEB DATED 16 - 05 - 2001. HE REFERRED TO THE LETTER ADDRESSED BY THE ASSESSEE DATED 21 - 05 - 2001 (PAGE NO. 26 OF THE PAPER BOOK) AND SUBMITS THAT CLARIFICATION WAS SOUGHT FROM THE MSEB AND VIDE LETTER DATED 23 - 05 - 2001 THE MSEB SENT THE REPLY MENTIONING THE VIABLE RATE WHICH WERE APPLIED FOR WORKING OUT THE ARREARS FROM THE YEAR 1977 - 78 TO 1999 - 2000 (PAGE NOS. 27 TO 29 OF P.B.) . HE SUBMITS THAT THE ASSESSEE HAS ALREADY WORKED OUT THE RELIEF GIVEN BY THE GOVT. BY FINALIZING THE VIABLE RATES AND FILED THE RETURN S FOR THE SIX PRECEDING ASSESSMENT YEARS I.E. FOR THE A.YS. 1995 - 96 TO 1999 - 2000 ON 27 - 02 - 2002 AS THE ASSESSEE WAS UNDER THE BONAFIDE BELIEVE THAT THE RELIEF IS TO BE WORKED OUT YEAR WISE. HE SUBMITS THAT IN RESPECT OF THE WAIVER OF THE LIABILITY TO THE EXTENT OF RS.36.89 CRORES WHICH WAS RELATED TO F.Y. 1998 - 99 AND 1999 - 2000 , THE ACCOUNT ING ENTRY WAS MADE IN THE BOOKS OF ACCOUNT IN F.Y. 1999 - 2000 AND OFFERED THE SAID AMOUNT FOR THE A.Y. 2000 - 01 WHEN THE ORIGINAL RETURN WAS FILED ON 23 - 10 - 2000. HE ARGUES THAT THE ENTIRE AMOUNT OF RELIEF GOT BY THE ASSESSEE SOCIETY IN VIEW OF THE GOVT. GR DATED 21 - 05 - 1999 WAS BROUGHT TO TAX BY INVOKING THE PROVISIONS OF SEC. 41(1). HE, FURTHER SUBMITS THAT THE ISSUE IS A 14 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR DEBATABLE ONE IN RESPECT OF THE ASSESSMENT YEAR IN RESPECT OF THE TAXABILITY OF THE RELIEF GIVEN TO THE ASSESSEE BY THE GOVT. OF MAHARASHTRA BY FIXING THE VIABLE RATES VIDE GR DATED 21 - 05 - 1999 AND HENCE, THE LEVY OF PENALTY IS NOT JUSTIFIED. HE ALSO REFERRED TO THE LETTER ISSUED BY THE MSEB DATED 10 - 09 - 1999 (PAGE NO. 24 OF P.B.) WHICH IS IN RESPECT OF THE SUPPLEMENTARY BILL FOR THE PERIOD APRIL, 1998 TO JULY, 1999 AS PER TH E VIABLE RATE DETERMINED BY THE GOVT. TO SUPPORT HIS CONTENTION THAT AT THE MOST IT CAN BE SAID THAT BENEFIT ACCRUED WITHIN MEANING OF SEC. 41(1) OF THE ACT IN F.Y. 1999 - 2000 RELEVANT TO A.Y. 2000 - 01. 7. THE NEXT PLANK OF THE ARGUMENT OF THE LD. COUNSEL IS THAT THE ASSESSEE WAS NOT PROVIDED WITH THE REASONS FOR ISSU ANCE OF THE NOTICE U/S. 148 OF THE ACT AND HENCE, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S. 148 IS BAD IN LAW. IN SUPPORT OF THE SAID CONTENTION HE RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVE SHAFTS 259 ITR 19 (SC) AND CIT VS. VIDESH SANCHAR NIGAM LTD. 340 ITR 66 (BOM) . 8. HE ARGUES THAT THE ASSESSEE SOCIETY HAD BONAFIDE BELIEVE THAT THE RELIEF IS TO BE SPREAD OVER FROM 1977 - 78 TO 1999 - 2000 AND BONAFIDE S OF THE ASSESSEE CANNOT BE DISPUTED AS THE ASSESSEE FILED THE REVISED RETURNS OF INCOME FOR SIX ASSESSMENT YEARS I.E. A.YS. 1995 - 96 TO 1999 - 2000 AS BEYOND THE SAID PERIOD OF SIX YEARS THE ASSESSEE C OULD NOT HAVE FILE D THE RETURNS. HE FURTHER SUBMITS THAT THE ASSESSEE HAS NOT SUPPRESSED ANY MATERIAL FACTS AND ENTIRE BREAKUP WAS GIVEN TO THE ASSESSING OFFICER AND HENCE, THERE IS A WRONG CHARGE BY THE ASSESSING OFFICER FOR LEVYING THE PENALTY THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME . HE RELIED ON THE FOLLOWING DECISIONS IN SUPPORT OF ABOVE CONTENTION. (I) CHANDRA PAL BAGGA 261 ITR 67 (RAJ.) . (II) ANAND WATER METER MFG. LTD. 117 ITR 866 (P&H) . 15 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR (III) CIT VS. S. DHANABAL 309 ITR 268 (DEL.) . (IV) CIT VS. TEK RAM (HUF) 300 ITR 354 (P & H). (V) KANBAY SOFTWARE INDIA (P) LTD. VS. DY. CIT 119 ITD 153 (PUNE). 9. HE SUBMITS THAT THERE WAS INADVERTENT ERROR AND IT WAS NOT A DELIBERATE ACT EVEN IF IT IS TO SAY THAT THE ADDITION WAS JUSTIFIED IN THE A.Y. 2002 - 03. HE PLACED HIS HEAVY RELIANCE ON TH E DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC). HE ARGUES THAT NOWHERE THE ASSESSING OFFICER HAS INVOKED THE EXPL . 1( A ) OR ( B ) TO SEC. 271(1)(C) OF THE ACT. HE PLACED HIS RELIANCE ON THE DECISION IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC). HE ALSO VEHEMENTLY ASSAILED THE ORDER OF THE LD. CIT(A) AND FINALLY SUBMITTED THAT EVEN IF THE ADDITION IS MADE BUT THE LOSS DETERMINED BY THE ASSESSING OFFICER IS MORE TH AN THE LOSS DECLARED BY THE ASSESSEE. HE PLEADED FOR DELETING THE PENALTY. WE HAVE ALSO HEARD THE LD. DR WHO SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE SOC IETY WAS FORMED FOR SUPPLYING THE ELECTRICITY AROUND 183 VILLAGES IN THE DISTRICT OF AHMEDNAGAR IN THE YEAR 1969 - 70. IT WAS ONE OF THE PILOT PROJECTS OF THE GOVT. OF MAHARASHTRA. THE ASSESSEE SOCIETY PURCHASE S THE ELECTRICITY ( POWER ) FROM THE MSEB AND SE LLS THE SAME TO THE CONSUMERS IN THE AREA EARMARKED FOR IT. IT IS STATED THAT THE RATES FOR THE ELECTRICITY PURCHASE FROM THE MSEB AND SELLING RATE TO THE CONSUMERS ARE CONTROLLED BY THE GOVT. OF MAHARASHTRA THROUGH MSEB. THE ASSESSEE SOCIETY HAS CONSIST ENTLY INCURRED LOSSES DUE TO DISPARITY IN THE PURCHASE PRICE AND SALE PRICE OF THE ELECTRICITY I.E. T ARIFF . THERE WERE HUGE ARREARS PAYABLE TOWARDS THE PURCHASE OF ELECTRICITY FROM MSEB. THE ASSESSEE COULD NOT PAY THE ELECTRICITY BILLS RAISED BY THE MSEB . THE MSEB STARTED BILLINGS FOR PUMPS ON HORSEPOWER (HP) BASIS W.E.F. 01 - 07 - 16 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR 1977. THE ASSESSEE SOCIETY ALSO STARTED FOR BILLING FOR AGRICULTURAL CONSUMERS IN ITS AREA OF OPERATION ON HP T ARIFF BASIS. THE BILLING T ARIFF WAS LESS THAN THE PURCHASE T ARIFF ADOPTED BY THE MSEB. THE REPRESENTATION WAS MADE BEFORE THE GOVT. OF MAHARASHTRA FOR MAKING THE VIABLE T ARIFF WHICH WAS ACCEPTED BY THE GOVT. AND VIDE GOVT. RESOLUTION DATED 21 - 05 - 1999 AND VIABLE T ARIFF WAS FIXED FOR THE PERIOD OF 1977 - 78 TO 19 9 9 - 200 0 . D UE TO THE INTERVENTION OF THE GOVT. , THE ASSESSEE S LIABILITY TOWARDS THE MSEB WAS REDUCED TO THE EXTENT OF RS.541.80 CRORES AS VIABLE T ARIFF WAS ADOPTED . THE GOVT. RESOLUTION DATED 21 - 05 - 1999 IS PLACED IN AT PAGE NOS. 13 TO 18 IN P.B. IT IS ALSO SEEN TH AT THE MSEB RAISED THE BILL FOR THE F.Y. 1997 - 98 AS PER THE GOVT. RESOLUTION DETERMINING THE VIABLE T ARIFF DATED 21 - 05 - 1999 (COPY PLACED AT PAGE NO. 19 OF THE COMPILATION ). 11. THE MSEB SENT THE ENERGY BILL FOR THE MONTH OF APRIL, 2001 IN WHICH THE ARREAR S FOR THE PERIOD OF 1977 TO MARCH, 2001 ARE SHOWN AT RS. 153,78,52,835/ - AND THIS IS THE PRECISELY THE POINT OF DISPUTE IN THE CASE OF THE ASSESSEE. IT IS CONTENTION OF THE ASSESSEE THAT EVEN IF THE ASSESSEE COULD GET THE BENEFIT IN VIEW OF THE GOVT. RESOL UTION FIXING THE VIABLE T ARIFF FOR THE ASSESSEE SOCIETY FOR PURCHASING THE ELECTRICITY FROM THE MSEB AS WELL AS FOR SELLING , T HE SAID BENEFIT ACCRUED TO THE ASSESSEE AT THE MOST IN THE F.Y. 1999 - 2000 RELEVANT TO THE A.Y. 2000 - 01. THE ASSESSEE ALSO TOOK ST AND THAT THE BENEFIT IS TO BE WORKED OUT INDEPENDENTLY ON FINANCIAL YEAR WISE FROM 1977 - 78 TO 1999 - 2000 AND THE ASSESSEE ACCORDINGLY FILED THE REVISED RETURNS FOR THE A.YS. 1995 - 96 TO 1999 - 2000 ON 27 - 02 - 2002. THERE WAS ONE MORE DISPUTE IN THE A.Y. 2002 - 03 IN RESPECT OF RS.36,89,56,522/ - WHICH WAS TOWARDS THE AMOUNT OF REDUCTION OF THE MSEB LIABILITY HAS BEEN DECLARED BY THE ASSESSEE IN THE A.Y. 2000 - 01. THE TRIBUNAL HAS GIVEN THE RELIEF TO THE ASSESSEE DIRECTING THE ASSESSING OFFICER TO DELETE THE SAID AM OUNT. THE CONTENTION OF THE ASSESSEE IS THAT THE BENEFIT TO THE ASSESSEE IN THE FORM OF PARTIAL 17 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR REMISSION OF THE MSEB LIABILITY TOWARDS THE PURCHASE OF ELECTRICITY WAS IN THE YEAR 1999 - 2000 AS THE GOVT. ISSUED THE GOVT. RESOLUTION ON 21 - 05 - 1999 , FIXING TH E VIABLE T ARIFF . ON THE BASIS OF THE GOVT. RESOLUTION WHATEVER THE BILLS WERE SUBSEQUENTLY REVISED BY THE MSEB ON 16 - 05 - 2001 WAS ONLY GIVING EFFECT AND HENCE, EVEN IF THE PROVISIONS OF SEC. 41(1) ARE ATTRACTED AS THE BENEFIT ACCRUED TO THE ASSESSEE SOCIET Y TOWARDS THE PARTIAL REMISSION OF THE MSEB LIABILITY MAY AT THE MOST BE TAXED IN THE A.Y. 2000 - 01 WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE SAME WAS ALSO REJECTED BY THE TRIBUNAL . 12. THE ASSESSEE MOVED THE MISCELLANEOUS APPLICATION U/S. 254(2) IN THE ORDER PASSED BY THE ITAT, PUNE IN ITA NO. 1308/PN/2010 DATED 06 - 03 - 2012 DISMISSING THE ASSESSEES APPEAL ON THE REASON THAT ONE OF THE GROUNDS OF THE ALTERNATE CONTENTION WAS NOT ADJUDICATED. THE TRIBUNAL RECALLED THE ORDER PASSED IN ITA NO. 1308/ PN/2010 DATED 06 - 03 - 2012 AND ADJUDICATED THE GROUND WHICH WAS REMAINED TO BE DECIDED. THE TRIBUNAL PASSED THE ORDER IN ITA NO. 1308/PN/2010 DATED 31 - 05 - 2013 ACCEPTING THE ALTERNATE PLEA OF THE ASSESSEE THAT IF THE ASSESSEE HAS NOT GOT ANY TAX BENEFIT EVEN BY CLA IMING ANY EXPENDITURE THEN SEC. 41(1) WOULD NOT APPLY TO THE EXTENT OF EXPENDITURE WHICH OTHERWISE RESULTED INTO LOSSES . A S THE ASSESSEE SUCCEEDED ON THE ALTERNATE GROUND THE ASSESSEE WAS FURTHER BENEFITED TO THE EXTENT OF RS.139,35,75,305/ - AS THE ASSESSING OFFICER PASSED THE ORDER U/S. 254 OF THE INCOME - TAX ACT DATED 16 - 08 - 2013 GIVING EFFECT TO THE ORDER OF THE TRIBUNAL IN ITA NO. 1308/PN/2010 DATED 31 - 05 - 2013 (COPY PLACED AT PAGE NO. 34 OF P.B. - II). AFTER GIVING EFFECT TO THE TRIBUNAL ORDER IN I TA NO. 1308/PN/2010 DATED 31 - 05 - 2013 AS PER THE ORDER PASSED BY THE ASSESSING OFFICER THE REVISED LOSS WAS WORKED OUT TO THE EXTENT OF RS.66,44,43,348/ - AS AGAINST THE LOSS DECLARED BY THE ASSESSEE IN HIS RETURNS AT RS.59,61,16,520/ - . 18 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR 13. NOW WE DEAL WITH THE ARGUMENT OF THE LD. COUNSEL. THE FIRST LIMB OF THE ARGUMENT IS THAT THE ASSESSMENT PROCEEDINGS AND THE PENA LTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND EVEN IF THE ASSESSEE HAS FAILED IN THE QUANTUM PROCEEDINGS ON SAME CONTENTION BUT STILL THE ASS ESSEE CAN DEFEND THE PENALTY PROCEEDINGS BY TAKING THE SAME GROUNDS OR CONTENTIONS. IN OUR OPINION THE RE SHOULD NOT QUARREL ON THIS PROPOSITION AND AT THE SAME TIME THE ASSESSMENT PROCEEDINGS CANNOT BE TOTAL DISCARDED AS THE PENALTY PROCEEDING IS OFF SHOO T OF THE ASSESSMENT PROCEEDINGS. THE NEXT PLANK OF THE ARGUMENT OF THE LD. COUNSEL IS THAT THE NOTICE WAS ISSUED BY THE ASSESSING OFFICER U/S. 148 OF THE ACT ON 03 - 04 - 2008 AND REOPEN ED THE ASSESSMENT FOR THE A.Y. 2002 - 03 IS BAD IN LAW AS THE ASSESSEE WAS NOT GIVEN THE REASONS FOR ISSUANCE OF THE NOTICE U/S. 148 OF THE ACT. THE LD. COUNSEL FAIRLY SUBMITTED EVEN IF THE ASSESSING OFFICER DID NOT GIVE ANY REASONS RECORDED BUT AT THE INSTANCE OF THE LD. CIT(A) THE REASONS WERE GIVEN TO THE ASSESSEE. THIS CON TENTION OF THE ASSESSEE HAS ALREADY BEEN CONSIDERED IN THE QUANTUM PROCEEDINGS SO WE DO NOT FIND ANY MERIT IN RAISING THE SAME BEFORE US. THE NEXT LIMB OF THE ARGUMENT OF THE LD. COUNSEL IS EVEN IF THE TRIBUNAL HAS CONFIRMED THE ADDITION MADE BY THE ASSES SING OFFICER IN THE A.Y. 2002 - 03 U/S. 41(1) OF THE INCOME - TAX ACT BUT STILL IT IS A DEBATABLE ISSUE AS IN THE A.Y. 2002 - 03 THE ASSESSEE HAS NOT SHOWN ANY CREDIT TO THE PROFIT AND LOSS ACCOUNT BUT THE EFFECT WAS DIRECTLY GIVEN IN THE BALANCE SHEET AS THE AS SESSEE COULD GET THE FINAL WORKING FROM THE MSEB IN THE F.Y. 2001 - 02 , BUT THE FACT REMAINED THAT THE GOVT. RESOLUTION DATED 21 - 05 - 1999 HAS GIVEN THE RELIEF TO THE ASSESSEE AND MSEB HAS ONLY DONE ARITHMETICAL JOB BY WORKING OUT THE REVISED BILLS AS PER THE VIABLE T ARIFF AS FIXED IN GOVT. RESOLUTION. 14. IT IS TRUE THAT THE TRIBUNAL HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER THAT THE BENEFIT RECEIVED BY THE ASSESSEE SOCIETY TOWARDS THE MSEB LIABILITY IS A TAXABLE IN THE A.Y. 2002 - 03 BUT AT THE SAME TI ME THERE IS FORCE IN THE ARGUMENT OF THE LD. COUNSEL THAT THE 19 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR GOVT. RESOLUTION IS DATED 21 - 05 - 1999 FIXING THE VIABLE T ARIFF GIVING THE BENEFIT TO THE ASSESSEE. IT IS ALSO SEEN THAT THE MSEB RAISED THE BILL FOR THE PERIOD APRIL, 1998 TO JULY, 199 9 @ 48.87 PAISA PER UNIT AS PER THE VIABLE T ARIFF FIXED VIDE GOVT. RESOLUTION DATED 21 - 05 - 1999 AND THE SAID BILL WAS RAISED IN THE FORM OF THE SUPPLEMENTARY BILL DATED 10 - 09 - 1999 . AS THE MSEB IMPLEMENTED THE GR DATED 21 - 05 - 1999 IN THE F.Y. 1999 - 2000 ITSELF THAT SU GGEST THAT THERE CAN BE DEBATE IN RESPECT OF THE TAXABILITY OF THE BENEFIT RECEIVED BY THE ASSESSEE TO THE EXTENT OF THE ASSESSMENT YEAR. 15. THE MAIN PLANK OF THE ARGUMENT OF THE LD. COUNSEL IS THAT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INC OME AS EVERYTHING WAS PLACED ON RECORD. THE RELEVANT PART OF SEC. 271(1)(C) READS AS UNDER: 271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSO N ( C ) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME EXPLANATION 1. WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, ( A ) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING] OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR ( B ) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE 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 PARTICULARS HAVE BEEN CONCEALED. 16. THE ABOVE SECTION HAS COME FOR THE JUDICIAL SCRUTINY IN THE PLETHORA OF DECISION S BEFORE THE HON'B LE SUPREME COURT AS WELL AS THE DIFFERENT HIGH COURTS. THERE IS A FORCE IN THE ARGUMENT OF THE LD. 20 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR COUNSEL THAT IT WAS A BONAFIDE BELIE F OF THE ASSESSEE THAT THE BENEFIT ACCRUED TO THE ASSESSEE VIDE GOVT. RESOLUTION DATED 21 - 05 - 1999 REDUCING THE ASSESSEE S LIABILITY IN RESPECT OF THE PURCHASE PRICE OF THE ELECTRICITY FROM THE MSEB AS IT WAS PERTAINING TO THE PERIOD 19 7 7 TO 1978 AND 199 9 TO 2000 , SAME HAD TO BE SPREAD OVER IN ALL THE ASSESSMENT YEARS. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE HAS C LAIMED THE EXPENDITURE EACH YEAR. THE ASSESSE FILED THE REVISED RETURNS FOR THE A.YS. 1995 - 96 TO 1999 - 2000 EVEN THOUGH THE SAID RETURNS WERE BEYOND THE TIME LIMIT PRESCRIBED U/S. 139(5) ON 27 - 02 - 2002 I.E. , BEFORE THE END OF THE F.Y. 2001 - 02 RELEVANT TO TH E A.Y. 2002 - 03. THE SAID CONTENTION ALSO GET S THE SUPPORT FROM THE FACT THAT IN THE ORIGINAL RETURN FOR THE A.Y. 2000 - 01 WHICH WAS FILED IN TIME ON 23 - 10 - 2002 , T HE ASSESSEE SOCIETY DECLARED THE DIFFERENCE TO THE EXTENT OF RS.36.89 CRORES . H ENCE, IN OUR O PINION BONAFIDE OF THE ASSESSEE SOCIETY FOR DECLARING THE BENEFIT RECEIVED /ACCRUED VIDE GOVT. RESOLUTION DATED 21 - 05 - 1999 SHOULD NOT BE DISPUTED AND THE SAID EXPLANATION CANNOT BE TREATED EITHER FALSE OR NON - GENUINE WITHIN MEANING OF EXPLANATION 1 ( A ) OR (B ) TO U/S. 271(1)(C) OF THE ACT . IN OUR OPINION THE INCOME ASSESSED U/S. 41(1) ALWAYS REMAINED DEBATABLE ISSUE. THE CONDUCT OF THE ASSESSEE IN FILING THE REVISED RETURN S FOR THE A.YS. 1995 - 96 TO 1999 - 2000 AND FURTHER DECLARING THE BENEFITS IN THE A.Y. 200 0 - 01 SHOW S THAT THERE WAS NO CONSCIOUS A CT ON THE ASSESSEE TO FURNISH ANY INACCURATE PARTICULARS OF ITS INCOME. 17. THE NEXT ARGUMENT OF THE LD. COUNSEL IS THAT THERE CAN BE A BONAFIDE MISTAKE ALSO AS THE INCOME TAX LAW IS SUCH COMPLEX TO UNDERSTAND AND IN THAT CONTEXT HE RELIED ON THE DECISION IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. (SUPRA). LD. COUNSEL SUBMITS THAT THE ASSESSEE SOCIETY NEVER THOUGHT OF APPLICABILITY OF SEC. 41(1) OF THE ACT BUT AS PER BONAFIDE BELIEF WAS OF OPINION THAT THE BENEFIT ACCRUED DUE TO GOVT. RESOLUTION DATED 21 - 05 - 1999 WOULD BE SPREAD OVER FROM 1977 - 78 TO 2000 - 01. IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. (SUPRA) 21 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR THE ASSESSEE WAS ENGAGED IN PROVIDING MULTI - DISCIPLINARY MANAGEMENT CONSULTANCY SERVICES. IN THE AUDIT REPORT IT WAS MENTIONED THAT THE LIABILITY TOWARDS GRATUITY AT RS.23,70,306/ - WAS NOT ALLOWABLE U/S. 40A(7) BUT THE ASSESSEE CLAIMED THE DEDUCTION. THE CONTENTION OF THE ASSESSEE WAS THAT THE CLAIM OF THE DEDUCTION WAS INADVERTENT . SU BSEQUENTLY THE ASSESSEES CASE WAS RE - OPENED BY ISSUING NOTICE U/S. 148 OF THE ACT FOR THE A.Y. 2000 - 01. THE ASSESSEE ACCEPTED THAT TO THE EXTENT OF RS.23,70,306/ - THE AMOUNT WAS TAXABLE BUT INADVERTENTLY IT WAS REMAINED TO BE DECLARED. THE ASSESSING OFFICER LEVIE D THE PENALTY @ 300% ON THE SAID AMOUNT ON THE REASON OF FURNISHING INACCURATE PARTICULARS . T HE TRIBUNAL HAS REDUC ED THE SAID PENALTY @ 100%. IN THIS BACKGROUND THE HON'BLE SUPREME COURT HAS HELD AS UNDER: 19. THE CONTENTS OF THE TAX AUDIT REPORT SUGGES T THAT THERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THERE IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. IT APPEARS TO US THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME. THIS CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CALIBRE AND EXPERTISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR. THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CO NCEAL ITS INCOME. 20. WE ARE OF THE OPINION, GIVEN THE PECULIAR FACTS OF THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIFIED. WE ARE SATISFIED THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDED T O OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS . 18. IN THE PRESENT CASE, IN OUR OPINION ALL THE FACTS WERE BEFORE THE ASSESSING OFFICER AND IT CAN BE SAID THAT FILING OF THE REVISED RETURNS AS WELL AS PARTIALLY DECLARING TH E BENEFITS IN THE A.Y. 2000 - 01 IN THE REGULAR RETURN WITHOUT CONSIDERING THE APPLICABILITY OF SEC. 41(1) CAN BE AT THE 22 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR MOST SAID AS INADVERTENT ERROR. IT IS ALSO SEEN THAT AFTER GIVING EFFECT TO THE TRIBUNAL ORDER THE ASSESSING OFFICER HAS DETERMINING THE LOSS AT RS.66,44,43,348/ - AS AGAINST THE RETURN LOSS FOR THE A.Y. 2002 - 03 AT RS.59,61,16,518/ - HENCE, THERE IS NO REDUCTION IN THE LOSS ALSO WHEREBY THE EXPLANATION 4 (A) BELOW SEC. 271(1)(C) CAN SAID TO BE APPLICABLE. 19. IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) THE HON'BLE SUPREME COURT HAS HELD AS UNDER: 8. A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EXPENDITURE ON INTER EST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD 'PARTI CULARS' USED IN THE SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITUR E ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME'. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRIC TLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN COMMISSIONER OF INCOME TAX, DELHI VS. ATUL MOHAN BINDAL [2009( 9) SCC 589], WHERE THIS COURT WAS CONSIDERING THE SAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS 23 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR COURT REF ERRED TO ANOTHER DECISION OF THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS [2008 ] 13 SCC 369 AS ALSO, THE DECISION IN UNION OF INDIA VS.RAJASTHAN SPG. & WVG. MILLS [2009 ] 13 SCC 448 AND REITERATED IN PARA 13 THAT (PAGE 13 OF 317 ITR) : '13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' 9. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CA N BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHR OFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. [2007(6) SCC 329], THIS COURT EXPLAINED THE TERMS 'CONCEALMENT OF INCOME' AND 'FURNISHING INACCURATE PARTICULARS'. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(1)(C), MENS REA WAS NECESSARY, AS ACCORDING TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TERM 'INACCUR ATE PARTICULARS' WAS NOT DEFINED ANYWHERE IN THE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING INACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSEE MUST BE FOUND TO HA VE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. WAS UPSET. IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), AFTER QUOTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTION 271(1)(C), THE COURT CAME TO THE 24 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR CONCLUSION THAT SINCE SECTION 271(1)(C) IND ICATED THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF SECTION 271(1)(C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN TH E MATTER OF PROSECUTION UNDER SECTION 276 - C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CIT ED SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 276 - C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 27 1(1)(C) THAT THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED. 10. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATT ER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'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'. 11. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRO NEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE 25 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY U NDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCUR ATE PARTICULARS. 20. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S. 271(1)(C) ON THE SPECIFIC CHARGE OF FURNISHING INACCURATE PARTICULARS OF INCOME AND THE SAME HAS BEEN ENDORSED BY THE LD. CIT(A) WHILE CONFIRMING THE PENALTY. A P ENALTY U/S. 271(1)(C) CAN ONLY BE IMPOSED IF THE MANDATE S OF THE SAID SECTIONS ARE FULFILLED AND IT IS NOT AN AUTOMATIC CONSEQUENCE OF AN ADDITION MADE TO THE INCOME OF THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE FINDING RECORDED IN THE ASSE SSMENT ORDER MAY CONSTITUTE GOOD EVIDENCE IN THE PENALTY PROCEEDINGS BUT THOSE FINDINGS CANNOT BE REGARDED AS A CONCLUSIVE PROOF FOR THE PURPOSE OF LEVY OF THE PENALTY AND ADDITION BEING MADE TO THE INCOME DOES, BECAUSE OF IMPACT OF EXPLANATION 1, EFFECTIV ELY RAISED A PRESUMPTION AGAINST THE ASSESSEE BUT THAT IS ENTIRELY REBUTABLY PRESUMPTION AND THE SAME OF REBUTTAL IS PROVIDED IN THE EXPLANATION ITSELF. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAS CONSISTENTLY TAKEN THE STAND FROM THE VERY BE GINNING THAT THE BENEFIT RECEIVED OR ACCRUED IN CONSEQUENCE OF THE GOVT. RESOLUTION DATED 21 - 05 - 1999 ARE TO BE SPREAD OVER FROM THE 1977 - 78 TO 1999 - 2000 WHICH IS A PERIOD COVERED IN THE SAID GR. THE EXPRESSION S INACCURATE AND PARTICULARS HAVE BEEN EXP LAINED BY THE HON'BLE SUPREME COURT IN THE DECISION OF THE RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) . WE HAVE EXAMINED THE EXPLANATION OF THE ASSESSEE IN THE BACKDROP OF EXPLANATION - 1 OF SEC. 271(1)(C) AND IT CANNOT BE SAID THAT THE EXPLANATION IS NOT BONA FIDE AS THE ASSESSEE HAS PLACED ALL THE FACTS ON RECORD WHICH ARE REQUIRED FOR COMPUTATION OF THE INCOME. THE ONLY 26 ITA NO. 457/PN/2014, MULA PRAVARA ELECTRIC CO - OP. SOCIETY LIMITED, AHMEDNAGAR DISPUTE IS THE APPLICABILITY OF SEC. 41(1) OF THE INCOME - TAX ACT . A S RIGHTLY ARGUED BY THE LD. COUNSEL TAX LAW IS SUCH COMPLEX IT CANNOT BE SAID THAT THERE WAS SOME CONSCIOUS ACT ON THE PART OF THE ASSESSEE FOR NOT CONSIDERING SEC. 41(1) TO THE EXTENT OF BENEFIT ACCRUED VIDE GOVT. RESOLUTION DATED 21 - 05 - 1999 BY THE REDUCTION OF THE MSEB LIABILITY. WE ARE, THEREFORE, OF THE OPINION THAT THERE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSING OFFICER FOR LEVYING THE PENALTY ON THE ASSESSEE U/S. 271(1)(C) OF THE ACT. WE, ACCORDINGLY, DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER AND ALLOW THE GROUNDS TAKEN BY THE ASSESSEE. 21. IN THE RE SULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 - 05 - 2014 PRONOUNCED IN THE OPEN COURT ON - 05 - 2014 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 30 TH MAY, 20 1 4 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - IT/TP, PUNE 4 THE CIT - IT/TP, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME T AX APPELLATE TRIBUNAL PUNE