ACIT, Circle-5, Kolkata, Kolkata V. M/s. Shubh Shanti Services Ltd., Kolkata

ITA 489/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2456 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 09-03-2010
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: D S DAMLE
• Keywords: Business income; Business expenditure; Cost of acquisition; Difference of opinion; Reason to believe; Change of opinion; Revenue expenditure; Reassessment proceedings; Capital expenditure; Capital Gains
• Section: 271(1)(c); 143(3); 148

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B , KO LKATA [ . . . . . . . . , , , , . . . . . . . . ! !! !' '' ', , , , # ] [BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER & SRI K.K. GUPTA, ACCOUNTANT MEMBER] $ $ $ $ / ITA NO. 489 (KOL) OF 2010 %&' () / ASSESSMENT YEAR 2003-04 ASSTT.COMMISSIONER OF I.T. CIRCLE-5, KOLKATA. M/S. SHUBH SHANTI SERVICES LTD. KOLKATA. (PAN-AAGCS9381R) (,- / APPELLANT ) - & - - VERSUS - (0,-/ RESPONDENT ) ,- 1 2 / FOR THE APPELLANT: / SRI PIYUSH KOLHE, SR. D.R. 0,- 1 2 / FOR THE RESPONDENT: / SRI D.S. DAMLE 3 / ORDER ( . . . . . . . . !' !' !' !') )) ) , # (K.K. GUPTA), ACCOUNTANT MEMBER : THE REVENUE IS IN APPEAL AGITATING THE ACTION OF THE LD. C.I.T.(A) IN DELETING THE PENALTY IMPOSED U/S. 271(1)(C) ON CONSIDERATION THA T IN CASE OF LOSS, FURNISHING OF INACCURATE PARTICULARS DOES NOT INVITE PENALTY PROV ISION WHEN THE ULTIMATE RESULT ALSO ENDS IN A LOSS. THE REVENUE AGITATES THAT THE LD. C.I.T.(A) ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE PENALTY IMPOSED U/S. 271(1)(C ) WITHOUT CONSIDERING THAT BY NOT FILING ANY APPEAL AGAINST THE ADDITION OF RS.38 LAK HS ON ACCOUNT OF ADVISORY FEES, THE ASSESSEE HAS WRONGLY TREATED THE EXPENDITURE AS REV ENUE EXPENDITURE. 2. THE BRIEF FACTS IN THIS REVENUES APPEAL ARE TH AT ORIGINAL ASSESSMENT FOR THIS ASSESSMENT YEAR WAS COMPLETED U/S. 143(3) OF THE IN COME-TAX ACT, 1961 VIDE ORDER DATED 23-03-2006 DETERMINING TOTAL LOSS AT RS.7,37, 85,581/- IN PLACE OF RS.7,37,96,985/- AS CLAIMED IN THE RETURN FILED. IN THE PROFIT & LOS S ACCOUNT FOR THE YEAR ENDED 31-03- 2003, A SUM OF RS.7,33,43,805/- WAS DEBITED UNDER T HE HEAD LEGAL AND PROFESSIONAL FEES, WHICH INCLUDED RS.7,00,00,000/-, BEING AMOUN T PAYABLE TO ICICI BANK TOWARDS PROFESSIONAL ADVISORY FEES IN CONNECTION WITH ACQUI SITION OF DEBTS OF NRC LIMITED (SECURITIZED ASSETS). THE ASSESSEE HAD ACQUIRED THE SECURITIZED ASSETS AGGREGATING TO 2 RS.35.53 CRORES AT A DISCOUNTED VALUE OF RS.21.30 C RORES, THE BREAKUP OF WHICH IS AS UNDER :- (RS.IN CRORES) RUPEE LOAN/DEBENTURES AGGREGATING TO FACE VALUE OF RS.31.05 CRORES TOGETHER WITH INTEREST AND ALL CHAR GES 20.15 FOR PREFERENCE SHARES OF NRC LIMITED AMOUNTING TO RS. 4.55 CRORES 1.15 21.30 THE ASSESSEE REALIZED FROM NRC LIMITED A SUM OF RS. 30.96 CRORES AND THE GAIN OF RS.10.90 CRORES RELATING TO RUPEE LOANS AND DEBENTU RES TAKEN OVER WAS OFFERED TO TAX AND ASSESSED AS BUSINESS INCOME. SIMILARLY, THE PREFERE NCE SHARES OF NRC LIMITED AMOUNTING TO RS. 4.55 CRORES, WHICH WERE ACQUIRED F OR A CONSIDERATION OF RS.115 CRORES, THE ASSESSEE HAD RECEIVED RS. 4.54 CRORES FROM NRC LIMITED ON REDEMPTION. THE CAPITAL GAIN AFTER CONSIDERING INDEXED COST OF ACQUISITION WAS OFFERED TO TAX AS LONG-TERM CAPITAL GAIN AND WAS ASSESSED AS SUCH IN THE ASSESSMENT YEA R 2004-05. AT THE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SUBMITTED DETAILS AND DOCUMENTS, WHICH WERE REQUIRED BY THE A.O., IN CONNECTION WITH THE SERVIC E CHARGES PAID TO ICICI BANK. AFTER SCRUTINY OF THE SAID DOCUMENTS, THE ENTIRE AMOUNT W AS ALLOWED IN THE ASSESSMENT AS BUSINESS EXPENDITURE. SUBSEQUENTLY, A NOTICE U/S. 1 48 DATED 18/20-09-2007 WAS ISSUED BY THE THEN A.O. IN WHICH FOLLOWING REASON WAS GIVE N :- ADVISOIY FEES PAID TO ICICI BANK IS AN EXPENDITU RE, WHICH IS CAPITAL IN NATURE AND SHOULD HAVE BEEN CAPITALIZED. THE ASSESSEE VIDE ITS LETTER DATED 08-10-2007 FILED A RETURN IN RESPONSE TO NOTICE U/S. 148 UNDER PROTEST. IN THE SAID LETTER FILED ALONG WITH THE RETURN, THE ASSESSEE HAD OBJECTED TO THE REOPENING OF THE ASSESSMENT, WHICH WAS MERELY A CHANGE OF OPINION. AT THE TIME OF REASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHE D ALL DETAILS, WHICH WERE REQUIRED BY THE A.O. IN CONNECTION WITH THE AMOUNT PAID ON ACCO UNT OF ADVISORY FEES TO ICICI BANK. THE A.O. IN HIS ORDER PASSED U/S. 147/143(3) DATED 12-12-2008 TREATED A SUM OF RS.38 LACS OUT OF ADVISORY FEES PAID TO ICICI BANK AS CAP ITAL IN NATURE AND DISALLOWED THE SAME. 3. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFO RE THE LD. C.I.T.(A) AND SUBMITTED THAT THE A.O. HAD ACCEPTED PAYMENT OF RS.7 CRORES M ADE TO ICICI BANK AS REVENUE 3 EXPENDITURE AND ALLOWED THE SAME WHICH IN THE PROCE EDINGS U/S. 147/148 WAS CONSIDERED PARTLY ON THE BASIS OF HIS RATIO PROPORT ION RELATING TO THE SALE OF PREFERENTIAL SHARES, WHICH INCOME WAS RENDERED BY THE ASSESSEE F OR CAPITAL GAINS FORMING PART OF THE COST OF ACQUISITION AS A CAPITAL COST. HE, THEREFOR E, PROCEEDED TO CONSIDER BY CHANGING HIS VIEW OF ALLOWING THE EXPENDITURE AS REVENUE EXP ENDITURE LATER TO BE APPORTIONED AS CAPITAL EXPENDITURE, LARGER PORTION OF WHICH HAD AL READY FORMED PART OF THE LARGER INCOME IN THE FORM OF LONG-TERM CAPITAL GAIN WAS CO NSIDERED BY THE LD. C.I.T.(A) AS NO LOSS TO THE REVENUE BY COMPLYING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF C.I.T. VS. RELIANCE PETROPRODUCTS PVT. LTD., REP ORTED IN 322 I.T.R. 158. 4. THE LD. DEPARTMENTAL REPRESENTATIVE INITIATING ARGUMENTS SUBMITTED THAT THE LD. C.I.T.(A) ERRED IN NOT COMPLYING TO THE DECISION OF HONBLE APEX COURT WHEREIN FURNISHING OF INACCURATE PARTICULARS WAS TO BE CONS IDERED IN ACCORDANCE WITH EXPLANATION TO SEC. 271(1)(C). IN A LATEST DECISIO N OF HONBLE APEX COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS, REPORTED IN 306 I.T.R. 277, IT HAS BEEN HELD THAT MENS REA IS NOT ESSENTIAL FOR ATTRAC TING CIVIL LIABILITY OF PENALTY. THE A.O. HIMSELF IN THE COURSE OF ASSESSMENT PROCEEDINGS WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME BY FURNISHING I NACCURATE PARTICULARS OF CAPITAL EXPENDITURE AS REVENUE EXPENDITURE. THEREFORE, THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SEC. 271(1)(C) IN ACCORDANCE WITH LAW AND LEVIED PENALTY ON THE SUM OF RS.38 LAKHS IN SPITE OF THE SUM OF RS.38 LAKHS RESU LTING IN NO DEMAND OF TAX FROM THE ASSESSEE WHEN THE LONG-TERM CAPITAL GAIN HAS BEEN A DJUSTED AGAINST THE LOSS RETURNED BY THE ASSESSEE. IT IS NOT THE CASE OF MERE ADDITION OR DISALLOWANCE RESULTING IN LOSS BUT OF FURNISHING INACCURATE PARTICULARS WHICH WAS NOT CON SIDERED BY THE LD. C.I.T.(A) IN ITS RIGHT PERSPECTIVE. THE LD. C.I.T.(A), THEREFORE, E RRED IN HOLDING THAT THE PLACING OF RELIANCE ON THE DECISION OF HONBLE APEX COURT IN T HE CASE OF DHARMENDRA TEXTILES PROCESSORS (SUPRA) WAS LEGALLY AND FACTUALLY MISPLA CED. ONCE THE ADDITION OR DISALLOWANCE STANDS ACCEPTED BY THE ASSESSEE BY NOT PROCEEDING FURTHER IN APPEAL, JUSTIFIES TO HOLD THAT THE ASSESSEE HAD FURNISHED I NACCURATE PARTICULARS OF INCOME. ONCE HAVING ESTABLISHED IN REGARD TO LEVY OF PENALTY AS A CIVIL LIABILITY, THE LD. C.I.T.(A) OUGHT NOT TO HAVE PROCEEDED TO DETERMINE NO LOSS OF REVEN UE OR NO CREATION OF NEW DEMAND BUT 4 SHOULD HAVE CONFINED TO ASSESSEES INTENTION OF FUR NISHING INACCURATE PARTICULARS OF INCOME. THREE DISTINCT MUTUALLY EXCLUSIVE SITUATIO NS IN CASE OF AN ADDITION TO INCOME HAVE BEEN DEALT WITH BY THE VARIOUS HIGH COURTS RES ULTING IN UPHOLDING THE LEVY OF PENALTY ON CONCEALMENT OF INCOME. HE, THEREFORE, P RAYED THAT THE PENALTY SO LEVIED BY THE A.O. MAY KINDLY BE CONSIDERED BY SETTING ASIDE THE ORDER OF THE LD. C.I.T.(A). 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. C.I.T.(A) HAD CONSIDERED THE CASE OF THE ASSESSEE-APPELLANT BEFOR E HIM AT THE PREMISE THAT THE DEEMING FICTION OF EXPLANATION 1 TO SEC. 271(1)(C) APPLIES ONLY WITH RESPECT TO THE FACTS MATERIAL TO THE COMPUTATION OF INCOME AND NOT TO THE COMPUTA TION PER SE. THE FICTION DOES NOT APPLY WITH THE CONTROVERSY REGARDING THE LEGALITY O F THE CLAIM MADE BY THE ASSESSEE. THE ASSESSEE HAD CLAIMED 100% REVENUE EXPENDITURE WHICH WAS ALLOWED BY THE A.O. ON HAVING VERIFIED THAT IT WAS JUSTIFIED ON THE FACTS AND CIRCUMSTANCES OF THE CASESSEES CASE, AS ENUMERATED ABOVE. IT WAS THE INTENTION OF THE A.O. ON HAVING VERIFIED THAT THE SALE OF PREFERENCE SHARES OF NRC LTD. OUGHT TO HAVE BEEN APPORTIONED WITH THE ADVISORY FEES WHICH WAS PAID TO ICICI BANK IN LUMP SUM IN A CERTAIN PROPORTION WHICH HE DEEMED FIT AT RS.38 LAKHS TO BE ACCRUED ON LONG-TER M CAPITAL GAIN AS CAN BE PURSUED IN HIS ORDER U/S. 154/143(1) FOR THE ASSESSMENT YEAR 2 004-05 AND THIS CLARIFIES THE FACTS AS WERE CONSIDERED FOR LEVY OF PENALTY FOR ASSESSMENT YEAR 2003-04. THIS CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE AS WAS CONSIDERED B Y THE LD. C.I.T.(A) WHEN THE VERY ISSUE OF DETERMINING OF FURNISHING OF INACCURATE PA RTICULARS WAS DEALT WITH BY THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRO DUCTS LTD. (SUPRA) WHEREIN IT WAS HELD THAT FURNISHING OF DETAILS OF EXPENDITURE AS W ELL AS INCOME IN THE RETURN BY THE ASSESSEE, WHICH DETAILS IN THEMSELVES ARE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART, WAS UPTO THE ASSESSING AUTHORITIES TO CONSIDER OR REJECT. IN THE CASE OF THE ASSESSEE, THE A.O. H IMSELF HAS BIFURCATED THE REVENUE EXPENDITURE TO CAPITAL EXPENDITURE AND, THEREFORE, IN NO WAY CAN BE CONNECTED WITH THE INTENTION OF THE ASSESSEE OF HAVING FURNISHED INACC URATE PARTICULARS OF INCOME. IT WAS A MATTER OF OBSERVATION WITH THE END RESULT WAS LOSS HAVING NO DEMAND ON THE ASSESSEE WHICH RESULTED IN NOT PURSUING THE APPEAL BEFORE TH E HIGHER AUTHORITIES ON THE ACTION OF THE A.O. HOLDING CAPITAL GAINS TO BE REDUCED FROM T HE COST OF ACQUISITION AMOUNTING TO 5 RS.38 LAKHS. THEREFORE, BY NO STRETCH OF IMAGINATI ON, THE AMOUNT HELD TO HAVE BEEN CONCEALED FOR HAVING FURNISHED INACCURATE PARTICULA RS OF INCOME COULD BE ESTABLISHED IN THE CASE OF THE ASSESSEE. HE FULLY SUPPORTED THE O RDER OF THE LD. C.I.T.(A) FOR PART OF HIS SUBMISSIONS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAD FILED ITS ORIGINAL RETURN CLAIMING EXPENDITURE OF RS.7 CRORES BEING THE ADVISORY FEES PAID TO ICICI BANK, WHICH WAS ACCEPTE D IN ASSESSMENT FRAMED U/S. 143(3). WHEN THE A.O. HAD REASON TO BELIEVE THAT THE ADVISO RY FEE PAID TO ICICI BANK WAS A CAPITAL EXPENDITURE IN NATURE AND SHOULD HAVE BEEN CAPITALIZED WAS THE BASIS FOR INITIATING PROCEEDINGS U/S. 147/148. THE ASSESSEE PROCEEDED TO PROTEST THE SAME BY STATING THAT THE SAME COULD NOT BE CONSIDERED AS CA PITAL EXPENDITURE IN VIEW OF THE PURCHASE OF ASSETS OF NRC LTD. WORTH RS.34 CRORES, WHICH WAS ROUTED THROUGH BANK AND WAS A BUSINESS TRANSACTION CONDUCTED BY THE ASSESSE E. HOWEVER, THE A.O. PROCEEDED TO CONSIDER 5% THEREOF AS CAPITAL TO BE PART OF THE CO ST OF ACQUISITION OF PREFERENCE SHARES OF NRC LTD. TO DETERMINE THE LONG-TERM CAPITAL GAIN AS AGAINST FORMING PART OF THE LOSS OTHERWISE ACCEPTED BY THE A.O. THIS CLEARLY ESTABL ISHES THAT THE ASSESSEE HAD FURNISHED ALL THE RELEVANT PARTICULARS WHICH ENABLED THE A.O. TO FRAME AN ASSESSMENT. BUT FOR A.O.S INSISTING ON 5% OF THE ADVISORY FEES PAID TO THE ICICI BANK TO BE CAPITAL IN NATURE, AT NO POINT OF TIME THE ASSESSEE ACCEPTED T HE CONTENTION OF THE A.O. BY NOT APPEALING AGAINST THIS OPINION OF THE A.O. THRUST UPON THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE, THEREFORE, HAS INDICAT ED THAT BY NOT APPEALING THERE AGAINST, THE ASSESSEE HAD ACCEPTED FURNISHING OF IN ACCURATE PARTICULARS WHICH WAS RIGHTLY CONSIDERED FOR INVOKING THE PROVISIONS OF SEC. 271( 1)(C). HAVING ALLOWED FULL AMOUNT OF EXPENDITURE AS REVENUE EXPENDITURE, IT WAS THE O NLY CONTENTION OF THE A.O. THAT APPROXIMATELY 5% THEREOF OUGHT TO HAVE BEEN CAPITAL IN NATURE TO BE CONSIDERED AS COST OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF LO NG-TERM CAPITAL GAIN AND THIS, IN OUR CONSIDERED OPINION, CANNOT BE AT ANY POINT OF TIME BE CONSIDERED AS CONCEALMENT OF INCOME IN THE HANDS OF THE ASSESSEE WHEN THE PROCEE DINGS U/S. 147/148 SHOULD HAVE BEEN CHALLENGED TO THE EXTENT OF THRUSTING AN OPINI ON BY THE A.O. ON TO THE ASSESSEE THAT IT FURNISHED INACCURATE PARTICULARS. WE FIND FORCE IN THE SUBMISSION OF THE LEARNED 6 COUNSEL FOR THE ASSESSEE THAT THE LD. C.I.T.(A) HAD RIGHTLY APPRAISED OF THE FACT THAT IN VIEW OF THE LOSS REMAINING A LOSS AND THE LARGER PO RTION OF INCOME ON ACCOUNT OF APPORTIONMENT OF REVENUE EXPENDITURE AS CAPITAL EXP ENDITURE ONLY RESULTED IN LESS TAX TO BE CONSIDERED FOR THE PURPOSE OF INITIATING PROCEED INGS U/S. 147/148 READ WITH SEC. 271(1)(C) CLEARLY CLINCHES THE ISSUE IN FAVOUR OF T HE ASSESSEE, WHICH FACTS CLEARLY FALL IN LINE WITH THAT OF HONBLE APEX COURT DECISION IN TH E CASE OF RELIANCE PETROPRODUCTS LTD. (SUPRA). IT WAS NEVER THE CASE OF THE ASSESSEE TO CONCEAL PARTICULARS OR FURNISH INACCURATE PARTICULARS IN ORDER TO INVITE PROVISIONS OF SEC. 2 71(1)(C). SO HAS BEEN CONSIDERED IN PLETHORA OF JUDGMENTS RELIED UPON BY THE RIVAL PART IES BEFORE US. IF THE A.O. BELIEVES THAT CERTAIN INCOME HAS ESCAPED ASSESSMENT WHICH HE INSISTS ON BRINGING TO TAX WOULD NOT BE CONVERSELY TRUE FOR THE ASSESSEE WHEN HE IS FULLY AWARE THAT IT WILL BE LOSS TO THE REVENUE IN CASE THE A.O.S OPINION PERSISTS. THE AS SESSEE WAS ON THE SAFE GROUND BY NOT APPEALING AGAINST THE ADDITION SO MADE IN THE REASS ESSMENT PROCEEDINGS. THE HONBLE APEX COURT, THEREFORE, HAD RIGHTLY NOTED THAT IF TH E CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE AS MADE BEFORE US NOW, WAS TO BE ACC EPTED, THEN IN THE CASE OF EVERY RETURN WHERE CLAIM MADE IS NOT ACCEPTED BY THE A.O . FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/S. 271(1)(C). THIS WAS CLEARLY NO T THE INTENTION OF THE LEGISLATURE. THE PAYMENTS WERE MADE TO A BANK AND ACCEPTED EARLIER A S WELL AS LATER, BUT BY ONLY ACCEPTING A SMALL PORTION THEREOF AS CAPITAL IN NA TURE RESULTING IN FINAL ACCEPTANCE THEREOF AS PARTICULARS ACCURATELY FURNISHED BUT IN THE OPINION OF THE A.O. NOT 100% REVENUE NATURE. THE LEARNED COUNSEL HAS SUBMITTED A COPY OF THE ORDER U/S. 154/143(1) DATED 11.5.2010 WHEN THE LIKE AMOUNT OF RS.38 LAKHS HAS BEEN CONSIDERED BY THE A.O. AS EXPENSES INCURRED FOR ACQUISITION DULY ALLOWED, THEREFORE, ONLY CHANGE THE NATURE OF THE EXPENDITURE RESULTING IN ULTIMATE LOSS WHICH AM OUNT IS LESS THAN THE AMOUNT SOUGHT TO BE CONSIDERED FOR TAXATION IF THE COST OF ACQUIS ITION WOULD NOT HAVE BEEN ENHANCED BY RS.38 LAKHS. THEREFORE, ON THE BASIS OF CONSIDERIN G THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD. C.I.T.(A) ON ALL FOURS. THE ASSESSEES CASE DID NOT FALL WITHIN THE AMBIT OF EX PLANATION 1 TO SEC. 271(1)(C) AND THE ASSESSEES EXPLANATIONS WERE NEITHER UNTRUE OR FALS E BUT WERE RATHER THRUST UPON THE ASSESSEE BY THE A.O. THE A.O. COULD NOT ESTABLISH AND HAS NOT BEEN ABLE TO BRING OUT IN THE REASSESSMENT ORDER THAT BY FURNISHING INACCURAT E PARTICULARS, THE INTENTION OF THE 7 ASSESSEE WAS TO AVOID ACTUAL TAX. THE A.O., THEREF ORE, INITIATED PROCEEDINGS U/S. 271(1)(C) IN A MECHANICAL MANNER TO LEVY 100% PENAL TY ON RS.38 LAKHS WHICH DOES NOT COMPLY WITH THE VARIOUS FACTS LEADING TO SUCH CONSI DERATION WHEN THE TRIBUNAL IN THE CASE OF KANBAY SOFTWARE INDIA PVT. LTD. VS. DCIT [ 119 ITD 153] AND IN THE CASE OF ACIT VS. VIP INDUSTRIES LTD. [122 TTJ 289], CONSIDE RED THE IMPACT OF DECISION OF HONBLE APEX COURT IN THE CASE OF DHARMENDRA TEXTIL E PROCESSORS (SUPRA) AND AFTER CONSIDERING THE CATENA OF JUDGMENTS ON THE ISSUE, W E HOLD THAT THE LEVY OF PENALTY U/S. 271(1)(C) IS NOT AUTOMATIC. MERELY BECAUSE THE PEN ALTY IS A CIVIL LIABILITY, THE REQUIREMENT FOR ESTABLISHING MENS REA CANNOT BE CON SIDERED, BUT THE ASSESSING AUTHORITIES SHOULD BE ABLE TO ESTABLISH FOR PROPOSI NG TO LEVY PENALTY ONCE THE ASSESSEE HAD DISCHARGED THE ONUS OF NOT HAVING VIOLATED THE PROVISIONS OF SEC. 271(1)(C). THE LD. C.I.T.(A) HAD RIGHTLY CONSIDERED THREE DISTINCT MUT UALLY EXCLUSIVE SITUATIONS WHEN PROVISIONS OF SEC. 271(1)(C) ARE ATTRACTED, WHICH W ERE DEALT WITH BY VARIOUS HIGH COURTS. THEREFORE, CONCEALMENT OF INCOME ON ACCOUN T OF FURNISHING OF INACCURATE PARTICULARS WAS TO BE ESTABLISHED BEYOND DOUBT FOR CONFIRMING THE PENALTY SO LEVIED BY THE A.O. MAKING OF INCORRECT CLAIM WAS NOT FURNISH ING OF INACCURATE PARTICULARS BUT WAS ONE SIDED OPINION THRUST BY THE A.O. ON THE ASSESSE E WHICH IT PREFERRED NOT TO APPEAL AGAINST. THEREFORE, CONSIDERING ALL THESE SUBMISSIO NS AND THE OBSERVATIONS OF LD. C.I.T.(A), WE ARE OF THE CONSIDERED VIEW THAT THE O RDER OF THE LD. C.I.T.(A) DOES NOT CALL FOR ANY INTERFERENCE. HIS ORDER CANCELLING PENALTY OF RS.13,96,500/- LEVIED U/S. 271(1)(C) IS, THEREFORE, UPHELD. 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. 4 3 #! 5 !& 46 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 16.7.10. SD/- SD/- ( (( ( . . . . . . . . ) )) ), , , , ( . . . . . . . . !' !' !' !' ), # (D.K.TYAGI), JUDICIAL MEMBER (K.K.GUPTA), ACCOUNTANT MEMBER ( (( (# # # #) )) ) DATE: 16-07-2010 8 $ $ $ $ / ITA NO. 489 (KOL) OF 2010 3 1 0%%7 87(9- COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT : ACIT, CIRCLE-5, KOLKATA. 2 0,- / THE RESPONDENT : SHAMBU SHANTI SERVICES LTD., 31, N .S.ROAD, KOL-700001 3. %3& () : THE CIT(A)-VI, KOLKATA. 4. %3&/ THE CIT, KOL- 4. >% 0%& / DR, ITAT, KOLKATA BENCHES, KOLKATA 5. GUARD FILE . 7 0%/ TRUE COPY, 3&!/ BY ORDER, (DKP) @ A / DEPUTY REGISTRAR .