1992 (8) TMI 93 - AT - Income Tax

Summary

Issues:
1. Rejection of assessee's claim for immunity under the Amnesty Scheme.
2. Dismissal of appeals against penalty proceedings initiation.
3. Interpretation of circular regarding immunity against penalty.
4. Confirmation of Dy. Commissioner(A)'s orders for assessment years 1981-82 and 1982-83.

Analysis:
The judgment deals with the rejection of the assessee's claim for immunity under the Amnesty Scheme. The ground for appeal was that the Deputy Commissioner(A) erred in rejecting the claim for immunity, arguing that since the return was filed before the search, immunity from penalty should be granted as per the CBDT circular. For the assessment year 1980-81, where penalty proceedings had not been initiated, the appeal was dismissed on the basis that immunity cannot be granted where a raid had been conducted, even though penalty proceedings were not initiated. However, for the assessment years 1981-82 and 1982-83, penalty proceedings had been initiated, and the appeals were rejected on the same ground that immunity cannot be granted post a raid. It was highlighted that the appeals were not only against the imposition of penalty but also against the initiation of penalty proceedings. The circular did not prohibit the initiation of penalty proceedings, and there was no right of appeal against it in the Act or the circular.

The interpretation of the circular regarding immunity against penalty was crucial in this judgment. The assessee argued that immunity should be granted as the returns were filed before the raid. The court emphasized that immunity could be denied only if the disclosure was made after and as a result of the raid. The court referred to specific questions and answers in Circular No. 451, emphasizing that the focus should be on the finding of material showing concealment, not just the occurrence of a raid. It was clarified that immunity could be granted only for what was disclosed but not found in the raid. The judgment highlighted that the essence was whether the assessee had disclosed everything in the return and nothing additional was found in the raid. The court concluded that the initiation of penalty proceedings was not barred by the circular, and the Dy. Commissioner(A)'s orders for the assessment years 1981-82 and 1982-83 were confirmed for different reasons as discussed.

In conclusion, all the appeals were dismissed based on the analysis of the rejection of the claim for immunity under the Amnesty Scheme, the interpretation of the circular regarding immunity against penalty, and the confirmation of the Dy. Commissioner(A)'s orders for the assessment years 1981-82 and 1982-83.