A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi for imposition of penalty

Astra Housing & Investment P. Ltd Vs CIT (Delhi HC)- The crux of the ratio of above decisions is that a  mere omission or negligence would not constitute a deliberate act of suppressio veri or  suggestio falsi. In order to be covered within the proviso of clause (c) of sub-Section (1) of Section 271, there has to be concealment of particulars of income by the assessee or the assessee must have furnished inaccurate particulars of income. Incorrect claim may not amount to furnishing of inaccurate particulars. Everything depends upon the return filed by the assessee, because that is the only document where the  assessee can furnish particulars of his income. When such particulars are furnished inaccurately, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee and such a claim can not amount to furnishing inaccurate particulars. The order imposing penalty is quasi-criminal in nature and the burden lies on the Department to establish that the assessee had concealed his income or furnished inaccurate particulars. Findings in assessment proceedings constitute good evidence in the penalty proceeding, but  the authorities must consider the matter afresh. The prima facie satisfaction of the Assessing Officer that the case may deserve the imposition of penalty, can be discerned from the order passed during the course of  assessment  proceedings. The initiation of penalty proceedings cannot be set aside only on the ground that assessment order states “penalty proceedings are initiated separately, if otherwise it conforms to the parameters set out.”

IN THE HIGH COURT OF DELHI AT NEW DELHI

ITA No. 622/2008

Judgment reserved on : 19.05.2011

Judgment delivered on :   03.06.2011

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