9911796707
TMI Blog2003 (3) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO noted in the concluding para of the block assessment order as under: "The next issue which comes up for consideration is as to whether the assessee would be liable for penalty under s. 158BFA(2). The assessee was issued notice under s. 158BD on 19th March, 1999 and according to the said provision, the AO is to allow such time not be less than 15 days but not more than 45 days for filing the return of income. In the aforesaid notice, the assessee was given time of 30 days to file return of income for the block period. However, the assessee filed return of income on 31st Dec., 1999, i.e., after nine months. As such, the assessee has not furnished the return under cl. (a) of s. 158BC and hence, no immunity is available to him under 1st proviso to s. 158BFA(2). As such, penalty under s. 158BFA(2) is initiated on the entire amount of undisclosed income assessed i.e., Rs. 33,15,650." 4. The order under appeal was passed as a result of initiation of penalty under s. 158BFA(2) of the Act. The AO gave due opportunity of being heard to the assessee and following submission was made by the assessee before the AO: "Regarding the levy of penalty under s. 158BFA(2), I would like to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal and while objecting to such imposition has taken various pleas and also relied upon various case law, but the learned CIT(A) though considered each and every aspect of the matter has concluded to confirm the action of the AO by passing a detailed order. 7. Still aggrieved, the assessee is in further appeal and while reiterating the submissions as made before the lower authorities, it was pleaded for deletion of the penalty imposed and confirmed by the learned CIT(A). It was contended that the penalty imposed in the case of the assessee in the status of the company is ab initio bad in law and penalty so imposed is not tenable in law and such penalty being illegal and null and void be cancelled. The ground No. 1 raised before the CIT(A) was not adjudicated upon by him and hence the order of learned CIT(A) is not justified. It was further submitted that the case of the assessee is not covered by mischief of section justifying imposition of penalty in terms of provisions of s. 158BFA(2) and no penalty is imposable in the case of the assessee for alleged default on the part of the assessee. It was next submitted that the AO has acted upon the return, though filed beyond the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory force like circulars, therefore, there is no justification for imposing penalty on the basis of press-note and same is liable to be deleted. It was also submitted that when two views/opinions are possible, the one beneficial to the assessee is to be applied and reliance in this regard was placed on the decision of Hon ble Supreme Court in the case of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 : (1973) 88 ITR 192 (SC). It was thus pleaded for deletion of the penalty or alternatively in case this Bench do not think it appropriate to delete the entire penalty, then it should be restricted to minimum imposable instead of maximum imposed. 8. The learned Departmental Representative relied upon the orders of the authorities below and pleaded for confirmation of the impugned order. It was submitted that this provision has specially been brought into statute to check delay caused by filing delayed returns and so far as charging of interest is concerned, the same is separate provision and it has nothing to do with penalty provision. Since return was filed beyond the period specified for filing of the return given in the notice, therefore, penalty is exigible in this case and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Chapter, may direct that a person shall pay by way of penalty. It further says that provided no order imposing penalty shall be made in respect of a person if he furnishes return under cl. (a) of s. 158BC, pays tax on the basis of such return or offers the money so seized to be adjusted against the tax payable on the basis of such return, adduces evidence along with the return of tax payment and an appeal is not filed against assessment of that part of the income which is shown in the return and second proviso enacts an exception to the first proviso. It provides that concession given in the first proviso shall not be available if the undisclosed income determined by the AO under s. 158BC(c) exceeds the income shown in the return. Penalty in a case covered by this second proviso shall be leviable on the excess portion of the undisclosed income. Thus, it can be inferred that in order to escape penalty, under first proviso, the assessee will have to file return under s. 158BC(a) making a full disclosure of the undisclosed income. Besides this, s. 158BFA(3)(a) provides that no penalty under s. 158BFA(2) shall be levied without affording a reasonable opportunity of being hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aise more than what is due. It is, therefore, unreasonable to assume that mere late filing of return of undisclosed income would tantamount to default as envisaged in s. 158BFA(2) on which no more tax is to be paid and quantum of penalty is 100 per cent to 300 per cent of tax, which is ultimately around double the amount of concealment penalty even, whereas question of penalty itself is based on the amount of tax. Moreover, levy of penalty is not mandatory, merely because it would be lawful to do so. It is a discretion to be exercised judiciously having regard to the conduct of the assessee, nature and extent of breach and other relevant considerations. In the case in hand, though the assessee took some more time than allowed to him to comply with the notice for filing of the return, yet he took due care to disclose correct undisclosed income in the return and as per the assessee, since full inspection of the record was not available, so it took some more time to collect the material for preparation of the return in order to arrive at the correct figures to disclose, but the AO has simply rejected this plea of the assessee on the ground that no evidence has been placed without maki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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