C. I. T. versus ATUL MOHAN BINDAL

Citation: [2009] 13 S.C.R. 464 · Decided: 24-08-2009 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2009] 13 (ADDL.) S.C.R. 464 
A 
G.l.T., DELHI 
....... 
v. 
ATUL MOHAN BINDAL 
(Civil Appeal No. 5769 of 2009) 
B 
AUGUST 24, 2009 
[TARUN CHATTERJEE AND R.M. LODHA, JJ.] 
Income Tax Act, 1961 - s.271(1)(c) - Applicability of -
-\ 
,, 
Concealed income - Penalty in terms of s.271(1)(c) - Held: 
c Is neither criminal nor quasi criminal but a civil liability; albeit 
a strict liability - Such liability being civil in nature, mens rea 
is not essential. 
The assessee-respondent filed return of his income. 
c 
D The Assessing Officer added various amounts to the 
income declared .by assessee in the return viz. salary 
~ 
income earned by assessee in Singapore, amount 
received by him from erstwhile employer and interest 
income earned by him from bank, and imposed penalty 
E u/s.271(1)(c) of the Income Tax Act, 1961. 
The assessee accepted the order of assessment but 
challenged the order of penalty. The CIT (Appeals) 
allowed the appeal holding that it was a case of 
... 
v 
unintentional and inadvertent omission and therefore, it 
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F was not a fit case for levy of penalty uls.271(1)(c) as the 
.assessee had not concealed the particulars of his income 
nor did he furnish any inaccurate particulars thereof. The 
Tribunal upheld the order passed by CIT (Appeals). The 
High Court upheld the view of the Tribunal and CIT 
G (Appeals). Hence the present appeal by the Revenue. 
Allowing the appeal and remitting the matter to High 
. -j. 
' 
Court for fresh consideration, the Court 
H 
464 
C.l.T., DELHI v. ATUL MOHAN BINDAL 
465 
~-1 
HELD: 1.1. A close look at Section 271(1) (c) and 
A 
Explanation (1) appended thereto would show that in the 
course of any proceedings under the Income Tax Act, 
.. 
1961 inter alia, if the Assessing Officer is satisfied that a 
person has concealed the particulars of his income or 
furnished inaccurate particulars of such income, such 
B 
person may be directed to pay penalty. The quantum of 
penalty as prescribed in Clause (iii) Explanation 1, 
~ J-
appended to section 271(1) provides that if that person 
fails to offer an explanation or the explanation offered by 
such person is found to be false or the explanation c 
offered by him is not substantiated and he fails to .prove 
that such explanation is bona fide and that all the facts 
relating the same and material to the computation of his 
total income has been disclosed by him, for the purposes 
of Section 271(1)(c), the amount added or disallowed in 
D 
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computing the total income is deemed t~ represent the 
concealed income. The penalty spoken of in Section 
271(1)(c) is neither criminal nor quasi criminal but a civil 
liability; albeit a strict liability. Such liability being civil in 
nature, mens rea is not essential. For applicability of E 
Section 271(1)(c), conditions stated therein must exist. 
-
[Paras 11 and 14] (472-G-H; 473-A-D; 477-F] 
--
1.2. In the present case, the High Court relied upon 
,, 
its earlier decision which is said to have been approved 
by this Court in Dililp N. Shroff. However, Di/lip N. Shroff 
F 
has been held to be not laying down good law in 
Dharamendra Textiles. Dharamendra Textiles is explained 
by this Court in Rajasthan Spining and Weaving Mills. The 
matter needs to be reconsidered by the High Court in the 
light of the decisions of this Court in Dharamendra 
G 
> 
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Textiles and Rajasthan Spinning and Weaving Mills. [Para 
15] [477-G-H] 
....-· 
Dilip N. Shroff v. Joint Commissioner of Income Tax 
(2007) 291 ITR 519; T. Ashok Pai v. Commissioner of H 
' ,.. 
466 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R. 
A Income Tax (2007) 292 ITR 11(SC); Union of .India and Ors. 
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B 
c 
v. Dharamendra Textile Processors and Ors. (2008) 306 ITR 
277 and Union of India v. Mis Rajasthan Spinning & Weaving 
Mills (2009) 8 SCALE 231, referred to. 
Case Law Reference: 
(2007) 291 ITR 519 
referred to 
(2007) 29~ IJ"R 11 (SC) referred to 
(2008) 306 ITR 277 
referred to 
(2009) 8 SCALE 231 
referred to 
Para 9 
Para 9 
Para 12 
Para 13 
CIVIL APPELLATE JURISDICTION : Civil Appeal No 5769 
of 2009. 
D 
From the Judgment & Order dated 25.01.2008 of the High 
Court of Delhi at New Delhi in l.T.A. No. 1336 of 2007. 
~ 
P.P. Malhotra, ASG, Naresh Kaushik, Tufail A Khan, B.V. 
Balaram for the Appellant. 
E 
The Judgment of the Court was delivered by 
R.M. LODHA, J. 1. Delay condoned. 
2. Leave granted. 
F 
3. The revenue has come up in appeal by special leave 
aggrieved by the judgement of the High Court of D
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