1 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 6/2009 The Commissioner of Income Tax . ........ Appellant. V/s. Goa Housing Board, Porvorim. ....... Respondent. Mr. S. R. Rivonkar, Advocate for the appellant. Mr. A. N. S. Nadkarni, Senior Advocate with Mr. H. D. Naik, Advocate for the respondent. CORAM :- NARESH H. PATIL & N.A. BRITTO, JJ. Date of reserving the Order : 19th January, 2010. Date of pronouncing the Order : 22nd January, 2010. P.C. : - The Assessee is a local authority, constituted under the Goa Housing Board Act, 1968. The relevant assessment year is 2003- 2004. Under the relevant law, income of the Assessee, being a local authority, was exempted under Section 10(20A) of the Income Tax Act. Therefore, the Assessee did not file any returns, till the Assessment Year 2002-2003. By Finance Act 2002, Section 10(20A) 2 was omitted with effect from 1/4/2003. The Assessee, filed for the first time, income tax returns for the Assessment Year 2003-2004, declaring NIL income, after claiming set-off of brought forward losses of Rs.25,04,982/-. 2. The Assessing Officer, while scrutinizing the assessment in exercise of powers conferred under Section 143(3), disallowed the losses claimed by the Assessee by order dated 9/3/2006 which was claimed as set off in view of the provisions of Section 80, 139(3), 72(1) and 74(1) of the Income Tax Act. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars in filing the returns. The assessment was confirmed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT). The Assessing Officer decided the penalty proceedings and imposed minimum penalty at 100 % of tax sought to be evaded, by order dated 15.12.2006, to the tune of Rs.7,89,070/-. 3. The Assessee then filed an appeal against the said order before the Commissioner of Income Tax (Appeals), Panaji. By order 3 dated 12.11.2007, the Commissioner allowed the appeal of the Assessee. Revenue preferred an appeal against the said order passed by the Commissioner to the ITAT. It also came to be dismissed by order dated 12.9.2008. Hence, the present tax appeal by the Revenue. 4. Learned Counsel for the appellant Shri Rivonkar submitted that in view of the provisions of Section 27(1)(c), the Assessee concealed particulars of his income and furnished inaccurate particulars. Therefore, the Assessing Officer rightly imposed 100 % penalty. The Assessee was exempted to file returns till the Assessment Year 2002-2003. Therefore, the Assessee was not entitled to claim set off while filing the returns for the Assessment Year 2003-2004. It was submitted that imposition of penalty is a civil liability. Therefore, the Assessee has failed to make out any case for waiver for setting aside the order of penalty. The impugned orders, according to the learned Counsel for the Revenue, are erroneous and against the principle enumerated by the Supreme Court in the case of Union of India and others vs. Dharmendra Textiles Processors and ors., [2008] 306 ITR 277 (SC) and in the case of Commissioner of Income Tax, Delhi vs. Atul Mohan Bindal, (2009) 9 SCC 589. 4 5. Learned Senior Advocate Mr. Nadkarni, appearing for the Assessee-respondent submitted that the case of Union of India and others vs. Dharmendra Textiles Processors and ors., cited supra was explained in the case of Union of India vs. M/s. Rajasthan Spinning & Weaving Mills, (2009(8) SCALE 231). Neither the Assessee has concealed any income, nor has furnished any inaccurate particulars. Whatever opinion that was given to the Assessee, which is a Government undertaking, was utilized and accordingly, in the returns which were filed for the first time, set off was claimed. Therefore, in the facts of this case, no penalty could be imposed. The learned Senior Counsel submitted that there has to be deliberate and intentional act on the part of the Assessee to conceal any income or to show any inaccurate particulars. He submitted that even if it is considered to be a civil liability, the Revenue will have to satisfy the conditions stipulated in Section 27(1)(c) of the I.T. Act. 6. We have perused the Judgment cited before us. In the case of Union of India vs. M/s. Rajasthan Spinning & Weaving Mills, cited supra, the Apex Court in paragraphs 21 and 23 of the report has 5 observed thus: “ 21. From the above, we fail to see how the decision in Dharmendra Textile can be said to hold that section 11AC would apply to every case of non-payment or short payment of duty regardless of the conditions expressly mentioned in the section for its application. 23. The decision in Dharmendra Textile must, therefore, be understood to mean that though the application of section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of section 11A. That is what Dharmendra Textile decides.” 7. Admittedly, the Assessee was exempted from filing income tax returns till the Assessment Year 2002-2003. Thereafter, for the first time when the Assessee filed its returns, the set off was claimed for the earlier years' losses, on the basis of the opinion and advice provided to the Assessee. In the facts of the case, we do not find any deliberate or conscious acts on the part of the Assessee to evade tax. We do not see 6 any malafide intention attributable to the Assessee. The Revenue has failed to make out a case of concealment of any income or furnishing of any inaccurate particulars of income for evasion of tax. 8. Both the authorities i.e. the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal have dealt with the issue and concurrently held in favour of the Assessee. In the facts and circumstances of the case, we do not find that any substantial question of law arises for entertaining this tax appeal. The appeal is, therefore, dismissed. NARESH H. PATIL J. N.A. BRITTO, J. ssm