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(d) Absence of any corroborative evidence to prove the charge of concealment.

The case of the appellant false in the scenario where the penalty is clearly leviable as per the facts of the case discussed in the earlier paragraphs.

(vi) Impact of judgement of Hon'ble Supreme Court in the case of Union of India v. Dharmendra Textiles Processors [2008] 306 ITR 277/174 Taxman 571 (SC):-

(below is quoted from the para 38 of the judgement in the case of Commissioner of Income-tax v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250 (Karnataka)/[2013] 218 Taxman 423 (Karnataka)/[2013] 359 ITR 565 (Karnataka)/[2013] 263 CTR 153 (Karnataka) [13-12-2012]) The Supreme Court in the case of Gujarat Travancore Agency v. CIT [1989] 44 Taxman 278, at page 55, paragraph 4 held as under:

signified a deliberate act or omission on behalf of the assessee. It went on to hold that clause (ii) of section 271(1)(c) provided for a discretionary jurisdiction upon the assessing authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the Assessing Officer must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT was upset in Union of India v. Dharmendra Textile Processors', after quoting from section 271 extensively and also considering section 271(1)(c), the court came to the conclusion that since Section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The court went on to hold that the objective behind the enactment of section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section 276C of the Act. The basic reason why decision in Dilip N. Shroff v. Joint CIT was overruled by this Court in Union of India v. Dharmendra Textile Processors, was that according to this Court the effect and difference between section 271(1)(c) and section 276C of the Act was lost sight of in the case of Dilip N. Sharoff v. Joint CIT However, it must be pointed out that in Union Swati Tomar vs. DCIT of India v. Dharmendra Textile Processors, no fault was found with the reasoning in the decision in Dilip N. Shroff v. Joint CIT, where the Court explained the meaning of the terms "conceal" and "inaccurate". It was only the ultimate inference in Dilip N. Shroff v. Joint CIT 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. Joint CIT was overruled.

(below is quoted from the para 47 of the judgement in the case of Commissioner of Income-tax v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250 (Karnataka)/[2013] 218 Taxman 423 (Karnataka)/[2013] 359 ITR 565 (Karnataka)/[2013] 263 CTR 153 (Karnataka) [13-12-2012]) The object behind the enactment of section 271(1)(c) read with the Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C of the Income-Tax Act. The word 'penalty' by its nature will not be determinative to conclude the nature of proceedings being criminal or quasi-criminal. That the intention of the legislature is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. There is nothing in section 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provision. Mens rea is an essential or sine qua non for criminal offence. Mens rea is not essential element for imposing penalty for breach of civil obligations or liabilities. It was only on the point of mens rea that the judgment in Dilip N. Shroff (supra) was upset in Dharmendra Textile Processors (supra). It was only the ultimate inference in Dilip N. Shroff (supra) 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 (supra) was overruled. For the applicability of Section 271(1)(c) conditions stated therein must exist. Therefore, it is obvious that it must be shown that the conditions under section 271(1)(c) exist before the penalty is imposed.

Swati Tomar vs. DCIT

(vii) In view of the judgement of honourable Supreme Court in the case of Dharmendra Textiles Processors (supra), the requirement of "mens rea" is no longer there and the judgement in the case of Dilip N. Shroff (supra) stands overruled in this regard.

Some of the definitions of 'mens-rea' are as under:-

The intention or knowledge of wrongdoing that constitutes part of a crime, as opposed to the action or conduct of the accused.