9911796707
TMI Blog1992 (9) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... rious credits appearing in the names and passed an order in a routine fashion. He, therefore, set aside the assessment order on 29th March, 1983 for being made afresh after investigation on the nature of advances and deposits from the customers and after verifying their genuineness. Similarly, the assessment for the asst. yr. 1978-79 was set aside by the CIT(A) on 7th Dec., 1982 with a direction to the Assessing Officer to pass the fresh order keeping in view his directions contained in the order. In the detailed order under s. 263 for the asst. yr. 1977-78 passed on 29th March, 1982, the CIT observed that while the assessee had received the advances from the purchasers, the Assessing Officer did not look into the nature of the same. According to the assessee, the advances raised by the firm were returned to the concerned parties. The refund of these deposits were either made in cash or by bearer cheques. It was found that out of 17 cheques issued, 4 cheques were signed by one Shri Sharma and two cheques were encashed by one person. When the CIT went through the record, he found that the Assessing Officer has accepted the entire position regarding the credits in the nature of advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,76,770 5,96,760 1,20,000 1978-79 3,65,450 4,75,450 1,10,000 1979-80 2,65,510 2,65,510 60,000 The Assessing Officer regularised the revised returns by issue of notices under s. 148. The contents of the paper book pages 110, 111 show the position of income originally assessed, income as per revised returns, additional income voluntarily offered for taxation and total income. The Assessing Officer completed the assessments for the asst. yrs. 1974-75 to 1979-80 on the same day, that is to say, on 20th May, 1983. All the orders are passed under s. 143(3)/147(a). All of them are small orders. The Assessing Officer completed the assessments by starting with the income finally assessed originally and added to the same, the undisclosed income offered for assessment for different years. The undisclosed incomes offered for the assessment in all the years from 1974-75 to 1979-80 are the same which were shown by the assessee in the petition filed before the CIT on 19th Feb., 1983 except for the asst. yrs. 1978-79 where the Assessing Officer in the short order of assessment has written that the total income was be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been given for the asst. yrs. 1975-76 to 1979-80 except that for the asst. yrs. 1976-77 to 1979-80. Explanation 1 to s. 271(1)(c) of the Act has also been applied by the Assessing Officer. In all the orders, the penalties of different amounts, namely, Rs. 26,120, Rs. 2,00,200, Rs. 79,200, Rs. 1,02,687 and Rs. 58,567 have been imposed for the years 1975-76 to 1979-80 respectively. 6. The assessee filed the appeals before the CIT(A) who held that the assessee filed the revised returns only after it became aware that the Assessing Officer had deteced the concealment of income in the course of the assessment proceedings for the asst. yr. 1978-79. He held that the assessee had earned the income which was not included by it in the original returns and this fact was within his knowledge at the time when the original returns were filed. He was, accordingly, satisfied that the assessee had originally furnished returns knowing them to be false and had concealed the particulars of income which were subsequently shown by it in the revised returns. He also held that the assessee had tried to mitigate its criminal act by furnishing additional income for taxation. He, accordingly upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) had set aside the order for the asst. yr. 1978-79 on 7th Dec., 1982 and though the same was pending for disposal, on 28th March, 1983, the Assessing Officer issued another notice on 28th March, 1983, for the said year. The reasons for issuing the said notice when the assessment was already pending before him has nowhere been placed on the record. 8. The counsel for the assessee submitted that for the asst. yrs. 1974-75, 1975-76 and 1976-77, the Assessing Officer did not take any action till 28th March, 1983 when he issued notices under s. 148 to regularise the returns filed by the assessee for the said years on 28th Feb., 1983. It was submitted that the Assessing Officer had no material on record to hold that the assessee had concealed the particulars of any income or had furnished inaccurate particulars for the said years in question. It was submitted that for the asst. yr. 1978-79, the CIT(A) had set aside the order of the Assessing Officer on 7th Dec., 1982 for being redone in the light of his direction contained in paras 10 and 11 of his order. He submitted that the CIT(A) found that there was a considerable force in the arguments of the assessee's counsel that the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that though the Assessing Officer had mentioned that the past history of this case clearly established the facts that before the assessee offered additional income for assessment for the asst. yrs. 1974-75 to 1979-80, the concealment of income was detected by the Department, there is no material on record to prove that the Assessing Officer had found out anything specific atleast for the asst. yrs. 1974-75, 1975-76 and 1976-77. It was also submitted that the observation of the Assessing Officer that it was due to the detection of the concealment that the Department had determined to reopen the assessment for the years 1974-75 to 1976-77 on the basis of the direction given by the CIT(A) is also not correct as the order of the CIT(A) was passed on 7th Dec., 1982 and the Department did not issue any notice under s. 147 for these years till 28th March, 1983 when the assessee had already filed the returns on 28th Feb., 1983. Our attention was invited to the order of the Assessing Officer under s. 271(1)(c) for the asst. yr. 1974-75 that the Department had found out the cash credits made by the assessee in the benami names for the year 1974-75, and it was submitted that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-80, it was submitted that the CIT(A) had dismissed the assessee's appeal on the ground that as the income has been disclosed by the assessee under s. 273A made that appeal as infructuous. 10. Our attention was invited to the decision of the Supreme Court in the case of Sir Shadilal Sugar and General Mills Ltd. Anr. vs. CIT (1987) 64 CTR (SC) 199 : (1987) 168 ITR 705 (SC). It was submitted that the assessee when he filed the petition under s. 273A before the CIT(A) had only accepted certain amounts to be added to the total income and he had clearly stated that it was subject to plea that no penalty was to be imposed. It was submitted that the assessee had at no stage accepted that it had deliberately furnished inaccurate particulars or concealed any income. It was submitted that from the assessee agreeing to the additions to his income, it does not follow that the amounts agreed to be added was the concealed income. It was submitted that there may be 101 reasons for such admission i.e. when the assessee realises the true position, it does not dispute certain disallowances but that does not absolve the Revenue from proving the mens rea of quasi-criminal offence. It was submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be taken into account in the penalty proceedings. The findings given in the assessment order would be relevant and admissible materials in penalty proceedings. It was, therefore, submitted that the Assessing Officer while completing the assessment for the asst. yr. 1978-79 was on the track of the assessee's activity and when the CIT(A) set aside the assessment for the year on 7th Dec., 1982, the assessee decided to offer the income for different years so that the Department could not proceed to look into the materials in detail. It was submitted that the assessee would not have made any additional disclosures but for the fact that the Department was regularly pursuing the assessee. Our attention was also invited to the notice under s. 263 issued by the CIT, Jabalpur on 16th March. 1982. It was submitted that there is already finding on the record that the IAC had found that there were several persons who had shown to have advanced the money for purchase of 'Kirloskar Pumps/Diesel Engines'. It was also submitted that the Department was already in possession of the fact that out of 17 cheques issued, 4 cheques were signed by one Shri Sharma and though the different names appeared o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the Department. The assessee only agreed to certain quantification of assessment year-wise as against the total detected by the Department. It was, therefore, submitted that the assessee had concealed the particulars of his income. 13. The Departmental Representative proceeded to invite our attention to the following decisions of the Tribunal, Nagpur Bench, Nagpur. (i) ITA Nos. 525 to 529/Nag/1986 in the case of ITO vs. Dhanpatrai Badridas Malhotra, Nagpur dt. 13th Aug., 1990 (Asst. yr. 1978-79 to 1982-83) : (ii) ITA No. 450/Nag/of 1985 in the case of M/s R.D. Patel Co. vs. ITO for the asst. yr. 1978-79 dt. 20th June, 1989. It was submitted that both the decisions were delivered by the Tribunal, Nagpur under similar set of facts and circumstances. In view of such facts and circumstances, they confirmed the penalty imposed by the Department and as such, in this case also, the penalty should be confirmed. The Departmental Representative proceeded to distinguish the various cases cited by the assessee's counsel. He proceeded to invite our attention to the decision of the Bombay High Court in the case of Dayabhai Girdharbhai vs. CIT (1957) 32 ITR 677 (Bom). He submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the Department as the business was on full swing. It was submitted that the assessee wanted to concentrate on business by paying some tax instead of having a long battle with the Department. He proceeded to invite our attention to the decision of the Kerala High Court in the case of CIT vs. Pawan Kumar Dalmia (1987) 66 CTR (Ker) 167 : (1987) 168 ITR 1 (Ker). Regarding the Tribunal, Nagpur Bench's decisions, it was submitted that the facts are clearly different. The decision of the Supreme Court in Shadilal Sugar's case was not taken into consideration. 15. We are of the opinion that the CIT(A) was not justified in confirming the penalties imposed by the Assessing Officer. A penalty under s. 271(1)(c) may be imposed where, in the course of any proceedings under the IT Act, the Assessing Officer is satisfied that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income. In spite of various amendments made to s. 271(1)(c), the fact remains that it is implicit in the word `concealed' that there has been a deliberate act on the part of the assessee. The concealment in law will always mean an intentional suppression of truth or fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income would have been found out by the Assessing Officer and not only offered by the assessee. The decision of the Supreme Court in Shadilal's case is clear on this aspect. We find that the orders of the Tribunal, Nagpur Bench, Nagpur relied upon by the Departmental Representative have not shown any consideration for that case. If an assessee is caught having concealed particulars of income and then makes an offer for being assessed on that income, than he cannot escape any penalty. But if no definite concealment has been found out and he offers certain amount to be taxed with a view to buy peace, then if the Department accepts offer, the offer has to be accepted in full and not in part. The assessment orders passed by the Assessing Officer for the asst. yrs. 1974-75 to 1979-80 clearly mention filing of petition by the assessee under s. 273A before the CIT. We quote here the observation of the Assessing Officer for the asst. yr. 1974-75 as an illustration in this regard. In para 3 of his order, the Assessing Officer observed: "The assessee made a disclosure petition under s. 273A of the IT Act, 1961 before the CIT, Jabalpur disclosing undisclosed income to be assessed year-wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledge of such concealment. Neither the orders of the Assessing Officer under s. 271(1)(c) nor the order of the CIT(A) reveal that any of the credits were in fact bogus credits. If the Assessing Officer had proceeded to investigate the matter on the lines suggested by the CIT and the CIT(A) and if during the process of investigations and enquiries he had established that the claims made by the assessee were false, then that would have been a fit case for imposition of penalty. Here situation is not such. Reliance of the Department on the decisions of the Nagpur Bench of the Tribunal in the case of Malhotra and R.D. Patel before us is of no help. Both the cases are clearly distinguishable on facts. Besides above, the decision of the Supreme Court in Shadilal's case has not been taken into consideration in both the decisions. We also want to make it clear that just because the CIT by his order dt. 9th Oct., 1985 rejected the assessee's petition under s. 273A, it cannot be said that the assessee had concealed the particulars of income or had furnished inaccurate particulars of his income. The Provisions of ss. 271(1)(c) and 273A of the Act are different and work in different fields ..... X X X X Extracts X X X X X X X X Extracts X X X X
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