9911796707
TMI Blog1997 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... another return on 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 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 1,500 ---------- Aggregate income 1,64,910 ---------- For the assessment year 1980-81 the assessee had filed the original return on 18-8-1980 admitting a total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. The reassessment was completed on a total income of Rs. 2,55,680 as under:- Rs. Income originally fixed. 88,450 Investment in vehicle disallowed under section 273A. 74,500 Investment in property omitted to be disclosed, but offered voluntarily, Other sources: (i)Investment in car 53,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 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 other sources was to be excluded. For the assessment year 1980-81 the deduction given by the CIT(Appeals) was to exclude the sum of Rs. 78,000 for the purpose of computing the penalty under section 271(1)(c). Not satisfied with the relief allowed by the CIT(Appeals), the assessee has filed these two appeals. 3. Before us the assessee's representative Shri N.S. Rajagopal, Chartered Accountant submitted that the CIT(Appeals) was not justified in upholding the levy of penalty without considering the fact that the assessee had made substantial disclosure of income voluntarily under section 273A of the Income-tax Act within the prescribed period of 15 days of the search. The learned representative stated that in the search conducted on 5-3-1988 there was no seizure of cash or valuables from the assessee's premises, but the assessee voluntarily made under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 sum of Rs. 55,000 deleted by the CIT(Appeals), the balance income for the assessment year 1979-80 was Rs. 1,08,410. In the assessment year 1980-81 the income was Rs. 1,76,180 after considering the sum of Rs. 78,000 excluded by the CIT(Appeals). According to the learned Departmental Representative, in the fight of the total income as assessed for both years, it cannot be said that there was no concealment of income by the assessee. Shri Kuruvilla contended that but for the provisions of section 273A which are applicable only for waiver to be exercised by the Commissioner, there was clear evidence to show that the assessee had not made a full disclosure of her income by way of investments in vehicles and immovable properties, and so the Assessing Officer was justified in imposing the penalty under section 271(1)(c). 5. We have given due consideration to the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 disclosure of his income to the Commissioner, such person shall, for the purposes of clause (b) of this sub-section, be deemed to have made, prior to the detection by the Income-tax Officer of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntary and in good faith, a disclosure of such particulars.' It is the contention of Shri Rajagopal that even for considering whether there was concealment of income or particulars under section 271(1)(c) in a case where the assessee comes forward with a declaration of income not disclosed originally the import of Explanation 2 to section 273A should be considered in that context as otherwise one would be drawn to two different conclusions, namely under section 271(1)(c) there is concealment and under section 273A there is no concealment. If we see sections 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 section 273A are entirely different and distinct, we do not see how Explanation in section 273A can be brought into the provisions of section 271(1)(c), to see whether there is concealment of income or furnishing of inaccurate particulars. Explanation 2 provides that when within fifteen days of seizure the assessee makes a full and true disclosure of his income to the Commissioner, then such person shall, for the purpose of clause (b) of section 273AM be deemed to have made, prior to the detection by the ITO of the concealment of income, voluntarily and in good faith a disclosure of such particulars. The language of Explanation 2 makes it clear that the deeming provisions are applicable for the purpose of clause (b). It may be noted that in clause (b) of sub-section (1) of section 273A, one of the conditions required to be fulfilled before the Commissioner can exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prejudice of !the Department. The Income-tax Act itself envisages such situations and relieves honest and bona fide assessees to mend matters and rectify the situation and the provision for a revised return in section 139(5) of the Act is properly attracted to such cases. It can correctly be said that, in such a case, the assessee discovers an omission or a wrong statement in the earlier return. A concept of discovery is, however, totally incompatible with the mental condition of an assessee who intentionally suppressed his income or the particulars thereof. Where the omission to return an income is accidental, no result may ensure by reason of such an omission. It is not the point of time of submission of a revised return that is crucial on the question. Revised return must be one which properly brings it under section 139(5) of the Act; and there must be a total absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
