IMPORTANT POINTS
Penal liability u/s 271(1)(c) is civil but strict liability.
Being civil liability, mens rea is not essential.
The penalty does not get attracted automatically, for invoking penalty the conditions stated in section 271(1)(c) must exist.

Judgment :-

R.M. Lodha, J.

Delay condoned.

2. Leave granted.

3. The revenue has come up in appeal by special leave aggrieved by the judgement of the High Court of Delhi whereby the High Court dismissed their appeal under Section 260A of the Income Tax act, 1961 (for short, "the Act" ) on January 25, 2008 and upheld the order dated December 22, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench `H, New Delhi.

4. Atul Mohan Bindal - assessee filed return of his income for Assessment Year 200203 on August 8, 2002 declaring his total income Rs.1,98,50,021/-. In the assessment proceedings u/s 143, a notice alongwith questionnaire was issued to him by the Assessing Officer on November 29, 2002. Pursuant thereto, assessee attended the assessment proceedings and furnished the requisite details. During the assessment proceedings, it transpired that assessee worked with M/s DHL International(S) PTE Ltd., Singapore during the previous year and was paid salary in Singapore amounting to US$ 36,680.79 equivalent to Rs.17,81,952/-. The assessee explained that an amount of US $ 8199.87 (Rs.3,98,350/-) was deducted as tax from the aforesaid salary income and having paid tax on salary income earned in Singapore, he was of the view that the said

income was not liable to be included in the total income in India. He however, offered salary income of Rs. 17,81,952/-to be included in his total income. The assessee was also found to have received an amount of Rs. 5,00,000/-from his erstwhile employer M/s Honeywell International (India) Pvt. Ltd. in the previous year. His explanation was that the said amount was exempted under Section 10(10 B) of the Act being retrenchment compensation. According to the Assessing Officer, that amount could not be exempted u/s 10 (10B) as the assessee was not a workman. The assessee also earned interest income of Rs. 22,812/-from Bank of India which was not included by him in the total income but he offered for tax the said amount. The Assessing Officer, accordingly, added Rs.17,81,952/-, Rs.5,00,000/- and Rs.22,812/- to the income declared by the assessee in the return and assessed the total income of assessee at Rs.2,21,54,785/-. Penalty proceedings under Section 271(1)(c) were initiated separately and penalty of Rs.7,75,211/- was imposed under Section 271(1)(c) by the Assessing Officer vide Order dated March 16, 2003.

5. The assessee accepted the order of assessment but challenged the order of penalty in appeal before the CIT (Appeals) XXV, New Delhi.

6. After hearing the assessee and the departmental representative, the CIT (Appeals) XXV, New Delhi allowed the appeal and set aside the order of penalty vide his order dated August 22, 2005. The CIT (appeals) held that the assessee has neither concealed the particulars of his income nor he furnished any inaccurate particulars thereof. This is what the CIT (Appeals) held:

"... I believe that this is a case of unintentional and inadvertent omission and therefore, it is not a fit case for levy of penalty u/s. 271(1)(c) of the Act as the assessee has not concealed the particulars of his income; nor has he furnished any inaccurate particulars thereof. As can be seen from a perusal of the impugned order, the penalty has been levied with reference to firstly, the addition disallowing the claim of Retrenchment compensation of Rs.5,00,000/- made u/s 10(10B) of the Act, secondly, the salary received in Singapore for services rendered outside India from December to March 2002 amounting to Rs. 17,81,952/-offered by the appellant in the course of assessment proceedings and thirdly the interest income of Rs. 22,812/-also offered for tax in the revised return filed during the course of assessment proceedings. As regards the former, the AO appears to be completely satisfied as regard the genuineness of the reasons that necessitated the revision. As regard the second, the issue involved difference of opinion even between two different benches of the Apex Court, and thirdly,