Section 271(1)(c) of the Income-tax Act, 1961 – Penalty – Imposition of penalty and realisation thereof is not a regular source of income for the Income-tax Department. It is only the justifiably imposition of tax which is intended to be recovered and unless there is a mens rea or a guilty animus on the part of the Assessee, the penalty under section 271(1)(c) of the Act is an exception rather than a rule. [2020] 54 ITCD 124 (MAD)
Facts: Revenue submitted that the Assessee deliberately made the claim under section 10B of the Act for deduction of its 100% export income, it being a 100% EOU beyond the Sunset year of A.Y. 2010-11 and A.Y. 2011-12 involved in the present case. He therefore submitted that the Assessee clearly had mens rea or wrong intention to avail the benefit of exemption under section 10B of the Act beyond its eligibility up to the A.Y. 2009-10.
Held: While dismissing the appeal of the Revenue Madras High Court held that-It is true that the assessee made a claim under section 10B of the Act for two of his assessment years, namely A.Y. 2010-11 and A.Y. 2011-12 wrongly, to which it was not entitled. But, the fact is undisputed that the Assessee has not really gone away with this exemption claim finally, upon the assessment. He has withdrawn his claim for the previous assessment year 2010-11 even by invoking the rectification jurisdiction under section 154 of the Act, and for the present assessment year 2011-12 also, he has withdrawn his claim before the assessing authority itself. Therefore, the only mistake, which is rather inadvertent on the part of the Assessee, is to make a claim under section 10B of the Act, but he has finally withdrawn the same. The fact remains that there has been no revenue loss or loss of tax to the department in the present case. We are, therefore, not inclined to entertain the present appeal of the Revenue under section 260A of the Act and we dismiss the same with no order as to costs.