AI Structured Summary
Not yet generated for this judgment
Judgment
Heard Sri Manish Misra, learned counsel for the appellant.
The department has come up questioning the correctness of the reversal order of the Assessing Officer and the Commissioner of Income Tax on the ground that the Tribunal has committed an error in proceeding to treat the submissions raised on behalf of the assessee to be correct, inasmuch as, according to the appellant''s, the figures given in the return were inaccurate which amounts to a concealment and therefore penalty proceedings were justified.
Reliance has been placed by Sri Manish Misra, learned counsel for the appellant on the decision reported in , 2014 (1) SCC 674 Mak Data (P) Ltd. V. Commissioner of Income Tax to contend that the profit and loss account which was stated in the return could not be substantiated by furnishing any details or particulars by the assessee. To the contrary the assessee claimed an additional adjustment which clearly established the concealment and non-explanation of the facts about an amount of Rs. 6,04,418/-. It is this figure which has been treated to be an inaccurate particular for the financial year 2008 and 2009 along with the incorrect figures of leave encashment as detailed in the order of the Assessing Officer.
An assessment order was passed and in the same an observation was made that separate proceedings shall be initiated for furnishing inaccurate particulars of income, pursuant thereto the Income Tax Officer passed an order on 30.5.2012. Aggrieved, the assessee preferred an appeal against the said penalty imposed and the same has been allowed by the learned Commissioner of Income Tax(Appeals) reversing the order of penalty. The Revenue preferred an appeal against the same before the Tribunal and the Tribunal has affirmed the order of the Commissioner Income Tax. Both these authorities have held that there was no inaccurate disclosure or untrue explanation given by the assessee for any justification to impose penalty.
We have considered the aforesaid submissions raised and from the aforesaid findings recorded, the first issue is about as to what is the alleged concealment or inaccurate particulars in respect to the return filed by the assessee.
Learned counsel for the appellant has relied on a judgment in Mak Data Pvt. Ltd. (Supra) to contend that once the onus has been shifted on the assessee then it was the assessee who ought to have discharged his burden and having failed to give an explanation, this was a clear case of concealment.
The aforesaid judgment in turn relies on the judgment in the case of Union of India (Uoi) Vs. Dharamendra Textile Processors , 2008 306 ITR 277.
Having considered the aforesaid submission, what we find is that elaborate discussion on this issue has been dealt with by the Apex Court in the case of Commissioner of Income Tax Vs. Reliance Petro Products Pvt. Ltd. , (2010) 322 ITR 158, paragraph 7 of the judgment is extracted hereinunder:-
"As against this, Learned Counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the Act. It was pointed out that there was no concealment or any inaccurate particulars regarding the income were submitted in the Return. Section 271(1)(c) is as under:- "271(1) If the Assessing Officer or the Commissioner of Income Tax(Appeals) or the Commissioner of Income Tax in the course of any proceedings under this Act, is satisfied that any person-(c) has concealed the particulars of his income or furnished inaccurate particulars of such income." 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 interest, 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 "particulars" 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 expenditure 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 strictly 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) 225 CTR (SC) 248 : (2009) 28 DTR (SC) 1 : (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 Court referred to another decision of this Court in Union of India Vs. Dharamendra Textile Processors , (2007) 212 CTR (SC) 432 : (2008) 13 SCC 369, as also, the decision in Union of India Vs. Rajasthan Spinning & Weaving Mills , (2009) 224 CTR (SC) 1 : (2009) 23 DTR (SC) 158 : (2009) 13 SCC 448 and reiterated in para 13 that:- "13. It goes without saying that for applicability of Section 271(1)(c), conditions stated therein must exist."
Having considered the aforesaid ratio of the decision, what we find is that the Assessing Officer has treated non-furnishing of an explanation by the respondent assessee to be unjustified and the description given in return to be a concealment.
We are unable to agree with the aforesaid finding recorded by the Assessing Officer which has been rightly reversed by the Commissioner Income Tax and affirmed by the Tribunal, inasmuch as, a wrong explanation cannot amount to furnishing of an incorrect particular. The non-furnishing of explanation falls within the same zone of consideration unless there is any adverse evidence to indicate that the concealment was deliberate or incorrectly depicted in the return with a view to evade any liability. The explanation in relation to Section 271(1)(c) as pressed into service read with clause (B) if read together, the same would clearly indicate that the ratio of the judgment in the case of Commissioner of Income Tax Vs. Reliance Petro Products Pvt. Ltd. (supra) is clearly attracted.
The Commissioner Income Tax (Appeal) has specifically recorded that the variation in returned income and assessed income is disallowance of expenses not found allowable, no penalty under Section 271(1)(c) of the Act is imposable and once such a finding has specifically been recorded, the penalty proceedings in the facts and circumstances of the case can not be sustained.
No substantial question of law arises for consideration. The appeal is accordingly rejected.