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3.4.2 Earlier there was some dispute as to whether penalty proceedings under section 271(1) (c) of the Income tax Act are quasi criminal in nature or not. This controversy has been brought to an end by recent judgment of three member bench of Supreme Court in the case of M/s. Dharmendra Textile Processors and others 166 TAXMAN 65 wherein Hon'ble Supreme Court has said thality imposed under section 271(1) (c) is pU1Iy a civil liability and there is no requirement to establish mens rea' bef ore levying penalty. It is usef ul to reproduce M/s Harding Loevner Funds Inc. the observation of the Supreme Court in para 24 and para 25 of the order:

13. The learned CIT(A) further noted that the assessee has claimed that it had paid advance tax of Rs. 10,17,380/- on earning of such short term capital gain, hence, there was no malafide intention is also cannot be accepted as correct, rather the payment of advance tax means that the assessee was well aware that it has earned short term capital gains of underlying shares of GDRs, therefore, there is no reason as to why the said income was not disclosed particularly when the assessee has duly claimed such refund on payment of advance tax while filing the return of income. From the above finding of the CIT(A), it is very clear that while filing the return of income refund of advance tax, which the assessee was paid was claimed, why the short term capital gain has not offered for taxation, for which there is no proper M/s Harding Loevner Funds Inc. explanation from the assessee. Therefore, we are of the view that the CIT(A) has rightly confirmed the penalty levied by the AO u/s 271(1)(c) of the Act. The learned CIT(A) referred the judgment of the Hon'ble Supreme Court in the case of M/s Dharmendra Textile Processors and others, 166 Taxman 65 wherein the Apex Court held that liability imposed u/s 271(1)(c) is purely a civil liability and there is no requirement to establish 'mens-rea before levying penalty. In this connection, the learned counsel for the assessee submitted that the CIT(A) wrongly followed the decision of the Dharmendra Textile (supra) as this decision was subsequently was explained by the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC). He, therefore, contended that the action of the CIT(A) in following the decision of Dharmendra Textile (supra) is bad in law. We have considered the decisions of the Hon'ble Supreme court in the case of Reliance Petroproducts and Dharmendra Textiles (supra). In the case of Dharmendra Textiles, the Hon'ble Supreme Court has explained that mens-rea is not the requisite condition in case of levying penalty u/s 271(1)(c) of the Act. In the case of Reliance Petroproducts, the Apex Court has observed that the application of mens-rea is not an issue before us and the Hon'ble Supreme Court has explained the difference between 271(1)(c) and 276C. In view of the decision of the Hon'ble Supreme Court, we made it clear that to initiate penalty proceedings u/s 271(1)(c) mens-rea is not a prerequisite condition, what is necessary is either 'concealed particulars of income' or 'furnishing inaccurate particulars of income'. If either of the conditions are satisfied penalty proceedings can be initiated. During the course of penalty proceedings, if the assessee is in a position to establish by filing cogent material before the AO to prove the bonafides, and if the AO is satisfied with the explanation offered by the assessee is bona-fide one, no penalty can be levied. In the present case, the learned CIT(A) following the decision of the M/s Harding Loevner Funds Inc. Hon'ble Supreme Court in the case of Dharmendra Textile Processors (supra) for the reason that the assessee has explained before him that the assessee is not having any malafide intention to evade tax. Therefore, the contention of the assessee is that the CIT(A) wrongly followed the decision of the Dharmendra Textiles Processors(supra) is not correct. In the present case, when the case of the assessee was selected for scrutiny, the AO noticed that the assessee has not shown the short term capital gains in the return of income filed by the assessee. He, therefore, issued notice u/s 142(1) to the assessee to file all the details of short term capital gains, and the assessee filed all the details with regard to short term capital gains (vide page 7 of paper book). However, the AO noticed that the details filed by the assessee were incomplete, hence, on 26/10/09 again asked the assessee to file some more details vide order sheet note dated 28/10/09. In response, the assessee filed some details on 29/10/09 and according to the AO, even these details were not complete and again asked the assessee to file some more details. The assessee filed details vide letter dated 09/11/09 stating that all the details are not available with the assessee and most of the details are with the custodian of the assessee. From the above, we are of the view that if the assessee is not having all the details, when the AO asked to submit the details in the first instance on 26/10/09, the assessee ought to have explained before the AO that full details are not available with it as other details are available with the custodian of the assessee. The conduct of the assessee, therefore, shows that the assessee wanted to take a chance with the AO that if the AO is satisfied with the details filed by the assessee, the assessee does not want to disclose the remaining details, wherein, the details include non-disclosure of short term capital gains amounting to Rs. 97,31,044/-. From the above, it can safely be concluded that the disclosure made by the assessee is not voluntary disclosure as the M/s Harding Loevner Funds Inc. details about short term capital gain of Rs. 97,31,044/- were disclosed against the repeated demands/requests made by the AO only. In so far as the explanation offered by the assessee that the short term capital gains of Rs. 97,31,044/- was missed out inadvertently in the return of income and the details for the same were available with the custodian, in our considered view, is not a bonafide explanation for the reason that the assessee wanted to take chance with the AO by filing some details thinking that the same are enough for the AO to complete the assessment proceedings. Therefore, the assessee deliberately wanted to hide some particulars to evade tax in as much as the assesssee filed the full particulars pertaining to the short term capital gain of Rs. 97,31,044/- after repeated demands/requested by the AO.