These are appeals filed by Revenue against separate orders of CIT(A) for asst. yr. 1988-89, in matter of imposition of penalty under s. 271(1)(c) of IT Act, 1961. We have heard learned Departmental Representative and gone through orders of authorities below and found from record that assessee was in receipt of enhanced compensation amounting to Rs. 96,276 from HUDA as result of award of Addl. District & Session Judge, Faridabad, AO stated that assessee filed his return of income on 20th June, 2001, wherein he has offered enhanced compensation and claimed deductions under s. 48(2), and net capital gain has been declared at Rs. 40,639. gross capital gain declared in return was accepted by AO. With regard to interest on enhanced compensation, AO observed that assessee received interest on enhanced compensation from HUDA at Rs. 1,37,027 during previous year relevant to asst. yr. 1988-89 but has not offered same for tax on ground that interest related to period 10th Nov., 1976 to 9th Dec., 1986 and no interest for accounting year was received during year. assessee has further contended that in view of Hon ble Supreme Court decision in case of Smt. Rama Bai vs. CIT (1990) 84 CTR (SC) 164: (1990) 181 ITR 400 (SC) and K.S. Krishna Rao vs. CIT (1990) 84 CTR (SC) 144: (1990) 181 ITR 408 (SC), same is not taxable. AO did not accept assessee s contention and held that interest received by assessee at Rs. 1,37,027 during accounting year relevant to asst. yr. 1988-89 was taxable on receipt basis in asst. yr. 1988-89. AO also levied penalty under s. 271(1)(c) in respect of interest income alleged to be concealed. AO also levied penalty under s. 271(1)(a) for delay in filing of return. Penalty was also levied under s. 273 amounting to Rs. 5,447. By impugned order, CIT(A) deleted all three penalties by observing that reassessment proceedings initiated in respect of enhanced compensation was held to be void ab initio in view of decision of Hon ble Gujarat High Court in case of Nitin R. Patel-Taxation LR 559, Ranchhodbhai Haribhai Jadav vs. Asstt. CIT (1999) 153 CTR (Guj) 250: (1999) 238 ITR 949 (Guj) as well as by decision of Hon ble High Court in case of C.A. Abraham v s . ITO (1961) 41 ITR 425 (SC). Accordingly, all three penalties were deleted. We have carefully gone through orders of lower authorities, issue regarding taxation of enhanced compensation and interest thereon has now been settled by decision of Tribunal, Special Bench in case of Dy. CIT vs. Padam Prakash HUF (2006) 104 TTJ (Del)(SB) 989: (2006) 10 SOT 1 (Del)(SB), wherein it was held that interest received on enhanced compensation is liable to be tax on accrual basis, therefore, to be spread over in years falling between year of possession of land being taken over by Government and year in which enhanced compensation is being paid. However, interest is not liable to be taxed in year of receipt. In case any further appeal has been filed against such enhanced compensation and interest thereon to higher Court, interest cannot be brought to tax till final verdict of higher Court and till matter reached to finality, no interest can be brought to tax. Following was observation of Special Bench: "In order to overcome difficulties and to improve situation, legislature amended s. 45 by introducing sub-s. (5) to s. 45 w.e.f. 1st April, 1988. Now compensation payable is brought to tax at two stages: one under sub-s. (1) i.e., in year in which transfer takes place. This gain is computed with reference to compensation awarded by acquisition officer. If any capital gain arises or accrues with reference to compensation awarded it is liable to tax under sub-s. (1) of s. 45. (ii) Secondly enhanced compensation is separately and independently assessed. Sub-s. (5) of s. 45 deals with situation where compensation on compulsory acquisition is enhanced (including further enhanced) by any Court, Tribunal or other authority. Such enhancement of compensation is brought to charge in year in which such enhanced compensation is received. Sub-s. (5) is complete code as it provides not only for charging enhanced compensation but also contains machinery for computation of income by providing that cost of acquisition and cost of improvement in such case would be nil. It further provides that in case of death, enhanced compensation shall be deemed to be income of person receiving it. amount is to be taxed in year of receipt. Sub-s. (5) is overriding provision and quite different from sub-s. (1) of s. 45 in content and texture. It is not possible to disregard change introduced by legislature by applying old scheme to cases of enhanced compensation. There is no good reason why scheme of sub-s. (5) should not be applied to receipt of enhanced or further enhanced compensation as envisaged by sub-section. Why amount received should not be brought to tax in year of receipt when language and intention of Legislature is absolutely clear. Why Court should not give effect to legislative intent and follow its mandate. There is no scope to whittle down applicability of provision by introducing philosophy that gain has not accrued or arisen. right to receive compensation has not attained finality. "Idea" of accrual of income not being supported by legislature s intent as is available from plain language cannot be accepted. Even otherwise statutory provision is quite equitable. Obligation to pay tax is cast on assessee only after enhanced compensation is pocketed by assessee. It is taxed when it is actually received. argument that unless final word on compensation or enhanced compensation is heard, there can be no gains is not sustainable. As discussed above, new scheme to tax enhanced or further enhanced compensation on receipt basis in year of receipt has been introduced by adopting plain and unambiguous language. Tribunals and Courts are required to give effect to mandate of legislature. Therefore, decision of Hindustan Housing Development Corpn. and all other decisions which have not taken note of intention and scheme of legislature and its purpose, are not applicable to cases where enhanced compensation is received. It is no doubt true that legislature while inserting sub-s. (5) in s. 45 through Finance Act, 1987 w.e.f. 1st April, 1988, did not provide for cases where enhanced or further enhanced compensation was subsequently reduced by any Court, Tribunal or other authority. Such situation has been taken care of by insertion of cl. (c) to sub-s. (5). said clause no doubt was inserted by Finance Act, 2003 w.e.f. 1st April, 2004, but it has to be taken to be declaratory in character. In given case where enhanced compensation is assessed on receipt basis, and amount of compensation is subsequently reduced, then revenue will have to rectify and take reduced amount in place of amount originally taken in assessment. Thus legislature has dealt with situation of compensation getting reduced in appeal or other proceedings. Above provision and purpose for which such provision was made by legislature cannot be ignored. Mischief rule of interpretation is clearly applicable here. Even specific provision like sub-s. (7A) of s. 155 supported above inference. picture without insertion of above cl. (c) was incomplete as section did not deal with situation where enhanced compensation is reduced in further appeal by Courts or Tribunal. provision was made to obviate hardship and unintended consequences of sub-s. (5) of s. 45. clause was inserted to m k e entire scheme workable and to supply obvious omission in provision. situation envisaged as per cl. (c) above was required to be given reasonable construction to accomplish purpose and object of enactment. Accordingly, it is retrospective in operation. As far as question of interest income on enhanced compensation is concerned, Legislature had made no change in statutory provision. interest is to be assessed on accrual basis from year to year. However, question of assessment of such interest on accrual basis would not arise unless it is finally determined. In case dispute relating to interest payable on enhanced compensation is pending before Court of law and not attained finality, same will not accrue and not liable to tax. Only after it is finally determined, same can be subjected to tax." In instant case, interest related to period 10th Nov., 1976 to 9th Dec., 1986 and assessee was not in receipt of any interest for relevant assessment year under consideration. Furthermore, Hon ble Supreme Court in case of Smt. Rama Bai (supra) had held that interest cannot be brought to tax in year of receipt and same is liable to be spread over among years to which it pertained. With regard to imposition of penalty under s. 271(1)(c) is concerned, Hon ble Supreme Court in case of Dilip N. Shroff vs. Jt. CIT (2007) 210 CTR (SC) 228: (2007) 291 ITR 519 (SC) observed as under: "Clause (c) of sub-s. (1) of s. 271 categorically states that penalty would be leviable if assessee conceals particulars of his income or furnishes inaccurate particulars thereof. By reason of such concealment or furnishing of inaccurate particulars alone, assessee does not ipso facto become liable for penalty. Imposition of penalty is not automatic. Levy of penalty not only is discretionary in nature but such discretion is required to be exercised on part of AO keeping relevant factors in mind. Some of those factors apart from being inherent in nature of penalty proceedings, inheres on face of statutory provisions. Penalty proceedings are not to be initiated, as has been noticed by Wanchoo Committee, only to harass assessee. approach of AO in this behalf must be fair and objective. Clause (iii) of sub-s. (1) of s. 271 again provides for discretionary jurisdiction upon assessing authority inasmuch as amount of penalty may not be less than amount of tax sought to be evaded by reason of such concealment of particulars of his income, but it may not exceed three times thereof. factors which are material for purpose of computation of total income as is sought to be emphasized in Expln. 1, refer to computation of income on part of assessee which is directly relatable to: (a) failure to offer explanation and/or offering explanation which is false; and (b) which he is not able to substantiate and fails to prove that such explanation is bona fide. Only in event factors enumerated in cls. (A) and (B) of Expln. 1 are satisfied and finding in this behalf is arrived at by AO, legal fiction created thereunder would be attracted. expression conceal is of great importance. It signifies deliberate act or omission on part of assessee. Such deliberate act must be either for purpose of concealment of income or furnishing of inaccurate particulars. term inaccurate particulars is not defined. Furnishing of assessment of value of property may not by itself be furnishing of inaccurate particulars. Even if Explanations are taken recourse to, finding has to be arrived at having regard to cl. (a) of Expln. 1 that AO is required to arrive at finding that Explanation offered by assessee, in event he offers one, was false. He must be found to have failed to prove that such explanation is not only not bona fide but all facts relating to same and material to income were not disclosed by him. Thus, apart from his Explanation being not bona fide, it should have been found as of fact that he has not disclosed all facts which was material to computation of his income. Explanation must be preceded by finding as to how and in what manner he furnished particulars of his income. It is beyond any doubt or dispute that for said purpose ITO must arrive at satisfaction in this behalf. Primary burden of proof, therefore, is on Revenue. statute requires satisfaction on part of AO. He is required to arrive at satisfaction so as to show that there is primary evidence to establish that assessee had concealed amount or furnished inaccurate particulars and this onus is to be discharged by Department. While considering as to whether assessee h s been able to discharge his burden, AO should not begin with presumption that he is guilty. Once primary burden of proof is discharged, secondary burden of proof would shift on assessee because proceeding under s. 271(1)(c) is of penal nature in sense that its consequences are intended to be effective deterrent which will put stop to practices which Parliament considers to be against public interest and, therefore, it was for Department to establish that assessee shall be guilty of particulars of income. order imposing penalty is quasi-criminal in nature and, thus, burden lies on Department to establish that assessee had concealed his income. Since burden of proof in penalty proceedings varies from that in assessment proceeding, finding in assessment proceeding that particular receipt is income cannot automatically be adopted, though finding in assessment proceeding constitutes good evidence in penalty proceeding. In penalty proceedings, thus, authorities must consider matter afresh as question has to be considered from different angle. Concealment of income and furnishing of inaccurate particulars are different. Both concealment and furnishing inaccurate particulars refer to deliberate act on part of assessee. mere omission or negligence would not constitute deliberate act of suppressio veri or suggestio falsi. Although it may not be very accurate or apt but suppressio veri would amount to concealment, suggestio falsi would amount to furnishing of inaccurate particulars." In view of above discussion, we do not find any merit in action of lower authorities for imposition of penalty under ss. 271(1)(c)/271(1)(a) and 273 of IT Act, 1961. In result, all appeals of Revenue are dismissed. *** INCOME TAX OFFICER v. KIRAN DEV, HUF