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TMI Blog1997 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... n 21-5-1985 offering additional amount of Rs. 19,337 as income on account of investment in an immovable property. In that return the total income was computed at Rs. 58,618 as under: Net loss as per assessment Rs. 719 Less: (1) Additions agreed in accordance with the provisions of section 273A of the Income-tax Act. 40,000 (2) Value of 2 acres 34 cents of property in Survey No. 5587 (Document No. 2011) omitted to disclose. 19,337 59337 ------- Net income 58618 ------ The Assessing Officer issued a notice under section 147(a) to reopen the original assessment with the approval of the CIT. The reassessment was completed on a total income of Rs. 1,64,910 as shown below: Rs. 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be disclosed, but offered voluntarily, Other sources: (i)Investment in car 53,000 (ii)Bogus credit in the 25,000 name of Dr. Narendranath -------- 78,000 Net Income. 2,54,180 Agricultural income. 1,500 ------------ Aggregate income. 2,55,680 ------------ The Assessing Officer initiated penalty proceedings under section 271(1)(c) and levied a penalty of Rs. 74,934 for the assessment year 1979-80 and Rs. 1,18,723 for the assessment year 1980-81. In the assessee's appeals the CIT(Appeals) concurred with the Assessing Officer that penalty was leviable on account of the income concealed by the assessee, but the appellate authority felt that f or the assessment year 1979-80 in computing the penalty the addition of Rs. 55,000 as income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently, and in that sense the assessee was entitled to exemption from the levy. 4. On behalf of the Revenue, Shri Kuruvilla M. George, the Departmental Representative supported the order of the CIT(Appeals) and submitted that the fact that the assessee herself came forward to offer additional amount as income under section 273A immediately after the search operation would show that she had not made a full disclosure of the income in the original return or even in the assessment stage and in that sense there was concealment of income attracting penalty under section 271(1)(c). It was further stated that even in the declaration under section 273A the assessee did not make a full disclosure and only later she declared further amounts on account of investments in immovable properties. According to the learned representative, the assessee was always aware of the investments in immovable proper-ties and that the investment had been made with the income not disclosed to the department. It was pointed out that for the assessment year 1979-80 the assessee had originally returned only loss of Rs. 8,510 and for the assessment year 1980-81 income of Rs. 42,653. Even after excluding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosure made by the assessee earlier in the return filed by her was full and complete, then there was no need for her to make a-disclosure under section 273A later after the search was conducted in her premises. There was also then no need to offer the further amounts in the revised return filed on 21-5-1985. The assessee's action of making the disclosure under section 273A and offering additional income subsequently would necessarily point to the fact of concealing the particulars of her income or furnishing inaccurate particulars in the return filed originally. The learned representative of the assessee contended that the provisions of section 271(1)(c) should be considered alongwith the provisions of section 273A, particularly Explanation 2 in sub-section (1) introduced with effect from 1-10-1984. Explanation 2, introduced by the Taxation Laws Act, 1984 and remained effective between October 1, 1984 and May 24, 1985 reads as under: "Explanation 2-Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to a person are seized under section 132 and within fifteen days of such seizure, the person makes a full and true di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 18(2A) of the Act proceeds upon the assumption that the assessee has become liable for penalty on his failure to furnish the return within the time without reasonable cause. The waiver of penalty is ordered by the Commissioner not on the ground that there was reasonable cause for late filing of the return or that the return was not filed late, but upon entirely different considerations. These considerations, briefly stated are that the assessee had made a full disclosure of his net wealth voluntarily and in good faith prior to the issue of notice under section 14(2), has co-operated in any enquiry relating to the assessment and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of any order passed in respect of the relevant assessment year. The circumstances which the Commissioner has to take into account for passing an order of waiver of penalty are not to be considered by the WTO, and similarly the facts which the WTO has to examine under section 18(1)(a) are not to be examined by the Commissioner. The two jurisdictions are entirely different and distinct." If the jurisdiction under section 271(1)(c) and under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 273A before the Commissioner does not deserve to be considered for the purpose of section 271(1)(c). The revised return filed on 21-5-1985 also does not exonerate the assessee from the charge of concealment, in view of the decision in CIT v. K. Mahim [1984] 149 ITR 737. In that case the Kerala High Court observed: "Courts of law are not concerned with the social philosophy behind a heavy dose of taxation or about the social attitudes in the matter. The laws enacted by Parliament, including the penal provisions thereof, have to be interpreted on their plain terms and given effect to, regardless of other considerations. If stringent measures such as section 271 of the Income-tax Act, 1961, are enacted, neither the courts (nor the taxation authorities nor the Tribunal) can render them nugatory by adopting a fundamentally erroneous approach to the statutory scheme." The Court further observed,- "A mere omission or wrong statement in such a case may not amount to concealment as contemplated under section 271(1)(c) of the Act, for the necessary foul intention is absent in such a case. There is then no suppression of truth or of a known fact by the assessee to the prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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