9911796707
TMI Blog1991 (3) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from manufacture of hand-made soaps from 1972 onwards but the major part of the income had been utilised in the construction of building for its factories and staff quarters throughout the entire period and taking into consideration the investments made, the assessee had declared an additional income of Rs. 12,50,000 to be spread over the assessment years 1976-77 to 1985-86 at Rs. 1.25 lakhs per year. An order under section 132(5) of the Income-tax Act was made on 15-6-1985 estimating the total undisclosed income at Rs. 35 lakhs and the tax was demanded at Rs. 9,29,250. The assessee had filed returns in accordance with the disclosure. But the assessments were made on 24-3-1986 and 31-3-1986 respectively for these two assessment years st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of penalties. The CIT(Appeals) was of the view that the concealment of income has been established by the department and accepted by the assessee and therefore the penalty was imposable. 6. In the further appeals before us it was pointed out on behalf of the assessee that apart from the disclosure made by the assessee, no material has been brought in the assessment to show any escapement of income. It was submitted that since under Explanation 2 to section 273A disclosure within the time prescribed therein is treated as a disclosure prior to detection of concealment, the penalty imposed should be cancelled. It is also pointed out that for all the earlier assessment years the penalties imposed have been cancelled by the appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce or waive the penalty imposed under section 271(1)(iii), if he is satisfied that the assessee has, prior to the detection by the Income-tax Officer of the concealment of the income, voluntarily and in good faith made full particulars of his income. The following Explanation was added by the Taxation Laws (Amendment) Act, 1984 with effect from 1-10-1984 :-- "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 mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch ; and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the said date." Though the Explanation 2 to section 273A was deleted by the Finance Act, 1985 with effect from 24-5-1985, that provision existed on the day when the assessee filed the return in respect of which the assessee is deemed to have concealed particulars. The effect of these two amendments was, on the one hand to deem a disclosure as concealment of income and on the other, to simultaneously grant the power to the Commissioner to waive the penalty if such a disclosure is made within 15 days of the seizure under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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