9911796707
TMI Blog2008 (1) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... khs) in asst. yr. 2000-01 received through bank drafts duly recorded. On seeking confirmations for my income-tax purposes from the payers, they have not come up which in absence I may not be able to prove the said. credits and thus to buy peace, to avoid litigation and to co-operate with the Department, I hereby surrender the sum suo moto as income for asst. yr. 2000-01. I am surrendering the aforesaid amount as suo motu as income in good faith as no penalty/prosecution proceedings be initiated against/humble request in the true spirit." 3. According to AO no revised return was filed by the assessee till that date. The AO initiated proceeding under s. 147/148 of the IT Act considering the fact that a bogus gift racket was unearthed by the Director of IT (Inv.) , Kanpur after recording his reasons. During the course of proceedings under s. 148, the assessee further surrendered a sum of Rs. 8,50,000 vide letter dt. 3rd Jan., 2003 stating as under: "I had some credits in my accounts of Rs. 8,50,000 (rupees eight lakhs fifty thousand) in asst. yr. 2000-01 received through bank drafts duly recorded. On seeking confirmations for my income-tax purposes from the payers, these have not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has shown the unexplained cash credits as gifts in original return of income which was accepted under s. 143(1) by the Department and under what circumstances did he come to know that the gifts were actually his income liable for tax. Further, even the first surrender of Rs. 9 lakhs is false insomuch that the appellant had subsequently admitted additional amounts of Rs. 8,50,000 and Rs. 50,000 as his unexplained cash credits and therefore his income which he has neither shown in the original return nor in the first statement of surrender. The entire conduct of the appellant shows that the appellant had concealed the particulars of income in the original return which he subsequently disclosed to the Department in various letters over a period of 3 years, much after the time prescribed under s. 139(5) to file a revised return, had expired. The appellant has not furnished any evidence in the course of penalty proceedings or appellate proceedings to show that he had duly disclosed all facts relating to the impugned unexplained credits and that disclosure of the unexplained cash credits as gifts was inadvertent and bona fide. Therefore, I hold that the AO was justified in levying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge of the IT authorities. Learned counsel for the assessee further submitted that all particulars were given correctly to the authorities below and all facts were brought to the notice of the AO during assessment proceedings itself and nothing was detected by the AO to show that the assessee had deliberately filed any false claim or filed inaccurate particulars of income. From assessee's agreeing to addition to his income, it does not follow that the amount was agreed to be treated as concealed income. Therefore, the penalty was not leviable. It was also submitted by learned counsel for the assessee that the assessee has neither concealed the particulars of income nor furnished incorrect particulars of such income. It was also added that the intention of the assessee is quite clear that the assessee with bona fide intention surrendered the amount of Rs. 18,00,000 (Rs. 17,50,000 with revised return and Rs. 50,000 during assessment proceedings) and paid tax along with the interest to avoid litigation and to buy peace and to co-operate with the Department. Such surrender cannot be treated as concealment. Learned counsel for the assessee relied on the following decisions: (i) Smt. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 271 (1)(c) of the Act. In view of above, learned Departmental Representative submitted that the impugned penalty order confirmed by the CIT(A) may be upheld. 8. We have carefully considered the rival submissions and have also perused the orders of the authorities below. In the instant case, it is an admitted fact that the AO treated the amount of Rs. 17,50,000 and Rs. 50,000 surrendered during the course of assessment proceedings as undisclosed income on the ground that a fake gift racket was unearthed by the Director of IT (Inv.), Kanpur and gifts were being purchased by payment of amount in cash. He further observed that this goes to show that the assessee was fully aware of the fact that investigation was being carried on by the Investigation Wing of the Department and he might be investigated in respect of bogus credits/gifts received by him as credited in his bank account. From this observation of the AO, it can be safely inferred that there was no such investigation in the case of the assessee and there was no information with the Department that gifts/credits were fake or bogus on the dates when the assessee surrendered the amounts voluntarily. In our view, the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3 lakhs stated to be received by the assessee were fake or bogus gifts or it was her own money which was disclosed as gifts by the assessee. The Department has also not brought any material on record to prove that the said gifts aggregating to Rs. 3 lakhs was concealed income of the assessee. We observe that the AO rested his conclusion on the act of voluntary surrender by the assessee to offer the said gift as her income. The Department has not established by any facts on record that it was concealed income of the assessee or assessee had furnished inaccurate particulars of her income in the original return. We are of the considered view that onus is on the Department to prove that the assessee had concealed her income or had furnished inaccurate particulars of her income and burden shifts to the assessee only if the assessee fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by the assessing authority. The above view has been taken by the Hon'ble Madhya Pradesh High Court in the case of CIT vs. Suresh Chandra Mittal (2000) 158 CTR (MP) 26 : (2000) 241 ITR 124 (MP) and the said decision of the Hon'ble Madhya Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed by any fact on record that it was concealed income of the assessee or assessee had furnished inaccurate particular of income in the original return. In the instant case also, the AO has not brought any material on record to prove that the credits aggregating to Rs. 17,50,000 was concealed income of the assessee. There is no material on record to establish that the aforesaid credits represented the concealed income of the assessee or assessee had furnished inaccurate particulars of his income in the original return. In our considered view, the above decision of the Tribunal is squarely applicable to the facts of the present case. 11. In the case of Brij Bala Chaudhary, the assessee could not explain a part of capital introduced in her business, she surrendered Rs. 35,000 for addition under s. 68 due to unexplained cash credit in her capital account. The AO imposed penalty for concealment of income. The Tribunal held that since assessee had made surrender only to purchase peace with the Department and after being compelled by the AO, it was not a fit case for imposition of penalty for concealment of income because concealment of income or particulars of income was not found to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory words of s. 271(1)(c) but satisfaction about contumacious conduct of the assessee is necessary such as he is not filing correct particulars of income or hiding some part of income followed by initiation of penalty proceedings relating to such conduct or furnishing inaccurate particulars or hiding income. The Tribunal observed that if the assessment order is silent on these aspects except making addition on the basis other than contumacious conduct filing inaccurate particulars or concealing some income, the AO cannot assume jurisdiction for initiating penalty proceedings. 14. In the case of ITO vs. Rakesh Gupta, the Tribunal, Amritsar Bench, SMC has held that for the purpose of levy of penalty under s. 271(1)(c), the AO is required to establish that the explanation furnished by the assessee is false or the same is not bona fide and that all the material facts relating to computation of income have not been disclosed. The Bench further observed that the word concealment voluntary means hidden and implies mala fide intention on the part of the assessee to evade tax or contumacious conduct. In the absence of the same, penalty under s. 271(1)(c) could not be levied. 15. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
