However, It Must Be Pointed Out That In Union Of India v. We Are Not Concerned In The Present Case With Mens Rea. However, We Have To Only See As To Whether In This Case, As A Matter Of Fact, The Assessee Has Given Ina

10. 06.11.2019 Heard learned counsel for the parties. 2. By way of this appeal, the appellant has challenged the order dated 25.06.2012 (Annexure-3) passed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack in ITA No.040/CTK/2012, whereby learned Tribunal relying upon the decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax, Ahedabad –v- Reliance Petroproducts Private Limited; reported in (201) 11 SCC 762 allowed the appeal preferred by the assessee. 3. This Court while admitting the matter vide order dated 03.04.2019 has passed the following order: “Certified copy of Annexure-3 shall be filed within four weeks. Heard. The matter is admitted on the following question of law: i)Whether, on the facts and in the circumstances of the case, the Hon’ble ITAT was justified in holding that the assessee had not furnished inaccurate particulars of income for which penalty was leviable u/s.271(1)(c) of I.T. Act, 1961. circumstances of the case, the Hon’ble ITAT was justified in holding that the assessee had not furnished inaccurate particulars of income for which penalty was leviable u/s.271(1)(c) of I.T. Act, 1961. Notice be issued to the respondent by Speed Post with A.D. making it returnable by 10.07.2019. Requisites for issuance of notice shall be filed within three working days. Put up this matter on 10.07.2019.” 4. Learned counsel for the appellant contended that learned Tribunal has seriously committed an error in interpreting the provision of Section 271(1)(C) of Income Tax Act for non-production of books of account under Section 80IA, which would not be covered under the judgment, which is sought to be relied upon. However, law on the subject has been discussed by the Hon’ble Supreme Court at paragraphs-16 to 21 in the case of Union of India –v- Dharmendra Textile Processors, which reads as under: 16. However, it must be pointed out that in Union of India v. Dharamendra Textile Processors [(2008) 13 SCC 369] no fault was found with the reasoning in the decision in Dilip N. Shroff v. CIT [(2007) 6 SCC 329] where the Court explained the meaning of the terms “conceal” and “inaccurate”. It was only the ultimate inference in Dilip N. Shroff v. CIT [(2007) 6 SCC 329] to the effect that mens rea was an essential ingredient for the penalty under Section 271(1)(c) that the decision in Dilip N. Shroff v. CIT [(2007) 6 SCC 329] was overruled. 17. We are not concerned in the present case with mens rea. However, we have to only see as to whether in this case, as a matter 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.” 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 erroneous. 18. 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 found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under 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 inaccurate particulars. 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 erroneous. 18. 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 found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under 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 inaccurate particulars. 19. It was tried to be suggested that Section 14-A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form part of the total income. It was, therefore, reiterated before us that the assessing officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. 20. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the assessing officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the legislature. 21. In this behalf the observations of this Court made in Sree Krishna Electricals v. State of T.N. [(2009) 11 SCC 687 : (2009) 23 VST 249] as regards the penalty are apposite. In the aforementioned decision which pertained to the penalty proceedings in the Tamil Nadu General Sales Tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed: (SCC p. 688, para 7) “7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's accounts books. Where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption bks/jm penalty cannot be imposed. The penalty levied stands set aside.” The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its return.” “7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's accounts books. Where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption bks/jm penalty cannot be imposed. The penalty levied stands set aside.” The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its return.” 5. Taking into consideration the above case law, we are of the view that learned Tribunal has rightly decided the issue in favour of the assessee. Hence, the issue is required to be answered in favour of the assessee and answered accordingly. are of the view that learned Tribunal has rightly decided the issue in favour of the assessee. Hence, the issue is required to be answered in favour of the assessee and answered accordingly. 6. Accordingly, the appeal is disposed of. Urgent certified copy of this order be granted on proper application. ……..………………… K.S. JHAVERI (CHIEF JUSTICE) ……..…………………… K.R. MOHAPATRA (JUDGE)