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TMI Blog1992 (2) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... essed interest receipt to the extent of Rs. 8,285. The ITO, therefore, found that the assessee was guilty of concealment of income to the extent of Rs. 26,000 for the year. 3. The assessee again filed a return of income on 13-1-1987 disclosing the suppressed sales and suppressed interest as its income. The ITO was not satisfied with the revised return and he was of the view that the assessee is guilty of concealing the particulars of income and filing inaccurate particulars. It was explained by the assessee before the ITO (1) that the return filed by the assessee on 13-1-1987 was voluntarily filed before any receipt of notice under section 148 from the department, (2) that the assessee had made a clean breast of its income without hiding anything and these returns were accepted by the department, (3) that one of the partners of the firm is a man of over 72 years, (4) that the Accountant who looked after the accounts was no more, and (5) that the assessee co-operated with the department. The assessee, therefore, requested the ITO to drop the penalty proceedings. The ITO, however, for the reasons recorded by him in his order under section 271(1)(c), levied a penalty of Rs. 8,900. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Swamy strongly urges that it is not a fit case for levy of penalty under section 271(1)(c) of the Income-tax Act. The concealment of income had not been established by the Revenue and it had not been proved that the appellant was guilty of conscious concealment of contumacious conduct. There is also no evidence on record to show that the appellant had suppressed the sales with a view to avoid tax. Sri Swamy has strongly relied on the decisions of our own Benches in the cases of ITO v. Sairam Agencies [1991] 41 TTJ (Hyd.) 208. and Dr. (Mrs.) Afzal Jabbar v. ITO [1991] 41 TTJ (Hyd.) 248. The ratio of these decisions, he urges, amply proves that the provisions of section 271(1)(c) are penal in nature and the levy of penalty under the said section is not automatic. With a view to attract the provisions of section 271(1)(c), it is essential for the department to prove that the assessee is guilty of filing inaccurate particulars and concealment of particulars of income. No such evidence is on record to substantiate the concealment on the part of the assessee. Sri Swamy, therefore, urges that the penalty order of the Revenue should be cancelled. 8. On the other hand, the learned depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the decision of the Kerala High Court in the case of Calicut Trading Co. v. CIT [1989] 178 ITR 430, wherein it has been held dismissing the application that "the explanation of the assessee had not been accepted by any of the authorities and concealment of income, as a matter of fact, was found by all the three authorities. Therefore, the return filed so as to include the concealed income could not be characterised as a revised return within the meaning of section 139(5)". Similarly, the Kerala High Court, again, in the case of CIT v. K. Mahim [1984] 149 ITR 737, held that "the filing of a revised return voluntarily by the assessee when he know that the Department was conducting investigations against him would not exonerate the assessee from the liability to penalty under section 271(1)(c) of the Act". The decision of the Calcutta High Court in the case of Kumar Jagadish Chandra Sinha v. CIT [1982] 137 ITR 722, also supported the Revenue wherein it was held that "the offence of concealment of income was complete when the original voluntary returns were filed and the revised returns did not obliterate the offence". The learned departmental representative has also plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was confronted with the 53 slips of paper referable to certain sales outside the books and the amount of interest received, the assessee promptly admitted these ommissions as his income and accordingly filed the return. The suo moto act of the assessee clearly goes to show that the assessee was guilty of suppression of sales and suppression of interest income. A careful perusal of the explanation filed by the assessee before the Revenue shows that nowhere the assessee had contended that the ommission of suppressed sales and suppressed interest was inadvertent or under a bona fide belief. On the other hand, the assessee had written a letter to the ITR and admitted "I have made a clean breast of my income without hiding anything". The admission of the assessee will clearly indicate that the concealed income has now been disclosed, otherwise, unless there was concealment of income, there was no question of making a clean breast of his income. 11. The provisions of section 132 of the Income-tax Act are perhaps the ultimate weapon in the armoury of the Income-tax Department to unearth concealed income or concealed wealth. If the concealment detected during the course of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l pending and no assessment has been completed. In the case of the assessee, the ITO had already completed the assessment under section 143(1) on 10-9-1985 and, therefore, the filing of the alleged revised return on 13-1-1987 without the issue of notice under section 148 was without any legal sanction. The said return filed by the assessee had in fact to be regularised by the ITO by issue of a notice under section 148. The assessee, therefore, cannot escape the penal consequences merely on the ground that he had made a clean breast of his income and had filed voluntarily the return showing the suppressed sales and the suppressed interest. 14. We have also carefully examined the explanation of the assessee. In the said explanation, the totality of the circumstances indicate that the assessee has impliedly accepted the fact of concealment. The circumstances explained by the assessee are such that no room is left for doubt that the assessee had suppressed the sales and the interest and systematically maintained the accounts for such suppression. 15. Regarding the precedents relied upon by the learned counsel for the assessee to which one of us was a party, we are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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