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Judgment
Akil Kureshi, J.—Revenue is in appeal against the judgment and order of the income tax Appellate Tribunal, Ahmedabad dated 31st January 2012, raising following question for our consideration:-
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the penalty u/s. 271(1)(c) of the Act ignoring the ratio laid down by the apex court in the case of Dharmendra Textile processors. 306 ITR (SC) wherein it has been held that penalty u/s. 271(1)(c) was civil wrong and ''means rea'' is not required to be established ?
Issue pertains to penalty imposed by the Assessing Officer and confirmed by the CIT [A] u/s 271[1](c) of the income tax Act, 1961. On further appeal, the Tribunal, however, deleted the penalty observing that none of the authorities below have taken into consideration the explanation furnished by the assessee. The Tribunal observed that the penalty proceedings and the assessment proceedings are separate proceedings. The explanation of the assessee had to be considered without which the penalty could not have been imposed. On such basis, the penalty was deleted by the Tribunal.
When the assessee, as is apparent from the order of the Tribunal, during the penalty proceedings, had offered explanation, surely the same had to be considered. Penalty proceedings being quasi-judicial in nature, the assessee had a right to offer explanation and without its consideration, no penalty could have been levied. We find that the Tribunal has committed no error in allowing the appeal of the assessee. Tax Appeal is, therefore, dismissed.