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TMI Blog2012 (9) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 85148/- for A.Y. 2003-04), (Rs. 85288/- for A.Y. 2004-05) and (Rs. 143942/- for A.Y. 2005-06) imposed by the Assessing Officer without considering the reply filed by the appellant. 3. That the ld. CWT(A)-II has erred in rejecting the appeal of appellant. Whereas no wealth was concealed by the appellant. 4. That the appellant was prevented by reasonable and sufficient cause for not filing the wealth tax return within the prescribed time as per law." 3. Brief facts of the case are that there was search in the premises of the assessee and the income tax assessment was completed u/s 153A. During the course of search assessee furnished a cash flow chart which reflected the cash in hand at Rs. 28,40,060/-, Rs. 63,88,060/-, Rs. 64,93,310/-, Rs. 69,84,055/- and Rs. 114, 77,055/- as on 31.3.2001, 31.3.2002, 31.3.2003, 31.3.2004 and 31.3.2005 respectively. These cash balances exceeded minimum exempted amount of Rs. 15.00 lakhs as per the sections of WT Act. Since the assessee had not furnished any return for taxable cash balances, notice u/s 17(1) was issued and served upon the assessee on 31.5.2007. In response the return declaring net wealth amounting to Rs. 27,90,100/- was filed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee was a pure question of fact. Admittedly, the assessee concealed transactions in the bank account and when notice of re-assessment was issued, fining no other way out, the assessee surrendered income, to avoid penal consequences. In such a situation, it could not be held that the assessee wanted to buy peace of mind and there was no evidence of concealment, which called for penalty. This is not a case where penalty has been imposed only because assessee disclosed higher income voluntarily but a case of clear concealment where the assessee having found no other way out, was forced to surrender undisclosed income. No substantial question of law arises out of Tribunal's order reversing the order of ld. CIT(A) deleting the penalty u/s 271(1)(c). Assessee having disclosed higher income after receiving notice u/s 148, there was no voluntary surrender of income but a clear cut case of concealment attracting penalty u/s 271(1)(c) ." Keeping in view the above said factual position of the case, the penalty imposed by the Assessing Officer is justificable in the case in hand. Therefore, the penalty imposed upon the appellant is confirmed and ground of appeal of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anr (2011) 337 ITR 350 (Guj). Therefore, levy of penalty was totally justified. 8. In the rejoinder the ld. counsel of the assessee submitted that even Hon'ble Gujarat High Court has found that Explanation 3 to section 271(1)(c) could not be applied in a case where notice was sent during a period specified as limitation for completion of assessment. Therefore, at least no penalty can be levied for Assessment Year 2005-06 because notice was issued by the WTO on 31.5.2007 i.e. before the time for completion of assessment in A.Y 2005-06. 9. We have heard the rival submissions carefully. In the case before us cash flow chart was prepared by the assessee at his own to defend his investments and other issues which might have emerged after the search u/s 132 and Cash Flow Statement were admittedly furnished before the WTO during Income-tax proceedings on 10.2.2006. By that time the assessee was absolutely knowing the fact that there was cash balance available with the assessee in excess of wealth tax limit of Rs. 15.00 lakhs and at least at that point of time the assessee should have filed wealth tax returns. In fact the notice u/s 17(1) was issued on 31.5.2007 and the assessee did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not warrant our affirmation. In our opinion, the Tribunal was duty bound to record tangible and cogent reasons for upsetting well-reasoned orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals). It should have directed its attention to the language of sections 271D and 271E of the Act in conjunction with other provisions of the same family and then decided by a reasoned order whether the respondent had been able to make out a case for deleting the penalty. The order passed by the Tribunal should have clearly reflected the application of mind by the learned members." The highlighted portion clearly shows that ignorance of law cannot be accepted in all cases. The ld. counsel of the assessee had also relied on the decision of Hon'ble Bombay High Court in case of CIT V. Shamlal Balram Gurbani (supra). In that case the issue involved was that a search was conducted and notice u/s 158BC was issued. The assessee had not filed return for 1993-94, 1994-95 and 1995-96 and the Assessing Officer treated the income of these three years as income of block period. The Tribunal found that the assessee's income from interest, salary and rent was reflected in the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any year subsequent thereto within two years from the end of the Assessment Year concerned; (iii) no notice should have been issued to him u/s 142(1) or section 148 of the Act till the expiry of the two year period, and (iv) the concerned officer is satisfied that in respect of such Assessment Year, such person had taxable income. In such cases, Explanation 3 provides that such person shall be deemed to have concealed the particulars of his income within the meaning of clause (c) of section 271(1) of the Act for such Assessment Year. In such an eventuality, even if the person concerned files a return after the expiry of the period of two years in pursuance of a notice u/s 148 of the Act, the deeming provisions of Explanation 3 shall still have application. The conditions for the applicability of Explanation 3 to section 271(1) are cumulative and each of the conditions has to be established for the purpose of invoking the provision." Thus it is clear that after introduction of Explanation 3 to section 18(1)(c) w.e.f. April 1, 1976 amended from time to time failure to file returns under WT Act would amount to concealment of wealth. 11. However, there were three conditions incorp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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