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TMI Blog1990 (3) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee who has come up in appeal before the Tribunal as the penalty levied under section 271(1)(c) by the Assessing Officer for the assessment years 1981-82 and 1982-83 has been confirmed by the learned AAC. In all the three appeals it is the question of levying of penalty which is in dispute. 2. The brief facts are that the assessee had filed returns for all these three years showing his income from the firm M/s. Ganesh Baburao Keshatwar, Nanded, in addition to income from agriculture and the assessment for assessment year 1980-81 had also been completed. 3. On 19-5-1981 the residence of the assessee was searched and certain bills and loose papers were seized along with cash. The statements of the assessee, his wife, were recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Keshatwar at Rs. 13,885 and income from agricultural land at Rs. 10,000. The ITO while assessing the said income increased the net profit from 7% to 10% and assessed accordingly. The assessee had also filed revised returns for assessment years 1981-82 and 1982-83 showing his income from individual business of iron and hardware estimating his net profit at the rate of 7% at Rs. 12,250 for A.Y. 1981-82 and for assessment year 1982-83 showed his income from individual business at Rs. 13,300 estimating the net profit at 7%. The ITO for these two years also estimated net profit at 10% and accepted the sales as shown and assessed accordingly. Afterwards notices were issued to the assessee as to why penalty under section 271(1)(c) be not imposed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 705 (SC) and CIT v. Punjab Tyres [1986] 162 ITR 517 (MP). 5. On the other hand, the learned departmental representative has stressed that the order of CIT(A) for assessment year 1980-81 should be set aside as reasons given by him do not hold good in the eyes of law. He has pointed out that in fact there was no settlement between the assessee and the department. It is only an order of the learned CIT(A) passed under section 132(12) of the Act which is on record and it is only on the basis of the said order that the assessee filed revised return accepting that order. The learned departmental representative further relied on the decision of Hon'ble Bombay High Court in the case of Dayabhai Girdharbhai v. CIT [1957] 32 ITR 677, Biland Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds. The first ground was that the interest under section 217 was waived by the ITO. Secondly it was held that the assessee should not be penalised under section 271(1)(c) of the Act simply because on the ground that the revised return has been filed after an agreement was reached with the department to arrive at certain figure of unexplained investment and turnover in the individual business in order to buy peace with the department. As far as the waiving of interest, it is an independent proceeding and the Assessing Officer has been given a discretion under Rule 40 of the Income-tax Rules. The mere exercising that discretion and waiving of the interest does not absolve the assessee from levy of penalty which is an independent proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the original return. The Tribunal had further found that the surrender of income was not voluntary but was as a result of deduction made by the ITO. Consequently the imposition of penalty was upheld by their Lordships in the said case. In the same way Hon'ble Bombay High Court in the case of Dayabhai Girdharbhai had held that where the omission to include an item of income in the original return is deliberate the results of such deliberate omission cannot be got rid of by merely filing a revised return. Consequently the imposition of penalty in that case was upheld. In fact the Hon'ble High Courts have consistently held that where there is a deliberate omission or concealment of income, the provisions of penalty are attracted and there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered by the assessees were not accepted and in the last to purchase peace the assessee had conceded for addition, in which the Hon'ble High Courts held that they were not fit cases for penalty as there was no sufficient evidence to prove wilful or deliberate concealment of income. In the present case it is an admitted case that the assessee did conceal his income from independent business of iron and hardware which he was doing and the income of which had not been accounted for anywhere nor was shown in the initial returns. Hence ruling relied upon by the assessee's counsel do not help the assessee in this case. While the decisions relied upon by the learned departmental representative carry greater weight and consequently cover the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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