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TMI Blog2012 (11) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the assessee’s ledger the name of the donee had not been entered when the survey was conducted on 06.10.1983 in the assessee’s premises. The survey of the assessee’s premises under Section 133A took place on 06.10.1983, two months prior to the date of filing the revised return. The survey itself was a result or as a follow up action to the searches and other inquiries conducted earlier. The proceeds of the donation cheque had already been taken out of the bank account which itself had been closed on 13.08.1982. In the light of these facts, the contention that the revised return was filed voluntarily is untenable. Reverse the order of the Tribunal and hold that the penalty under Section 271(1)(c) was rightly imposed - against the assessee. - ITA 1696/2006 - - - Dated:- 5-11-2012 - S. RAVINDRA BHAT MR. R.V. EASWAR JJ. Appellant: Ms. Suruchi Aggarwal, Sr. Standing Counsel. Respondent: Mr. S. K. Aggarwal, Advocate. R.V. EASWAR, J.: On 07.03.2007, the following substantial question of law was framed under Section 260A of the Income Tax Act, 1961 ( Act , for short): Whether the Income Tax Appellate Tribunal was correct in law in deleting the penalty impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company to ordinary crossing ( Co. ). This act, according to the assessing officer, showed the involvement of the assessee in the making of bogus donations with a view to reducing the taxable income. He accordingly disallowed the claim in the assessment order passed on 30.09.1982. The disallowance was accepted by the assessee. 4. Penalty proceedings for concealment of income were initiated under Section 271(1)(c) of the Act. The assessee s explanation was called for and after examining the same, the assessing officer came to the conclusion that the assessee concealed its income as well as furnished inaccurate particulars thereof, by making a bogus claim of deduction under Section 35CCA in the original return filed on 28.06.1983. He accordingly imposed the maximum penalty of Rs.13,00,000/-, being 200% of the tax sought to be evaded. 5. Aggrieved by the levy of penalty the assessee successfully appealed to CIT (Appeals), whose order was taken in appeal by the Revenue before the Tribunal in ITA No.1564/Del/2002, which, by the impugned order dated 30.08.2005 confirmed the cancellation of the penalty. 6. The Revenue is aggrieved by the order of the Tribunal and has pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s account payee only was changed and it was converted into an ordinary crossing ( Co. ). A fictitious account in the name of donee trust was opened in State Bank of Patiala, Delhi Branch in which the cheque was deposited. The proceeds were credited on 09.07.1982 to the fictitious account. The cheque had been handed over to Prem Prakash, one of the persons in the Board of Directors, who handed over the cheque to Vipin Mehra. Within a week s time, the assessee received a receipt in the Dak. 7. Simultaneously with the opening of the bogus account in the name of the trust, another account was opened in the same bank in the name of one C. L. Swamy in his capacity as the Secretary of trust by making a cash deposit of Rs.1,000/-. His signature was attested by one Mr. P. P. Verma, a school teacher at New Delhi. His wife was the proprietor of a firm by name M/s. Pushpam Investment Company in whose name an account had been opened on 12.06.1982 in State Bank of Patiala, Delhi. Investigation made by the income tax authorities revealed that this account was opened at the instance of Prem Prakash c/o. M/s. Usha International Ltd. Inquiries were made with the donee trust and they reveal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lockers and part of it was invested in bearer bonds, etc. It was also noticed that no proceedings or action was taken by the assessee company against Vipin Mehra despite the attempt to show that the assessee was also victimised. A search of Mehra s residence was again made on 26.11.1983, but no bearer bonds were found in his possession. 11. The assessing officer further noticed that the assessee had not made any donations of such magnitude in the past and that there was undue haste in obtaining the approval of the Board of Directors; the approval was granted in an extra ordinary general body meeting of the shareholders held on 26.03.1982 to make an additional donation up to Rs.35,00,000/- over and above the limit of Rs.5,00,000/-. It would appear that the board authorised the director, Charat Ram to make the donation. Apparently, the assessing officer was trying to drive home the point that it was unusual for a company to convene an extra ordinary general body meeting to obtain an authorisation for making donation. 12. Taking into consideration the cumulative effect of the aforesaid facts, the assessing officer came to the conclusion that the assessee concealed its income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the facts narrated in the penalty order. The key persons involved have also been found to be common in all such cases. These persons are Vipin Mehra and Prem Prakash. It has also been found that though the donation was made by a cheque which was crossed account payee only , the special crossing was later changed to a simple crossing i.e. Co. . The change was made under the signatures of R. K. Wadhwan, Manager (Accounts) of the assessee company and K. P. Pillai, Senior Advisor to the assessee company. The proceeds of the cheque were collected by the State Bank of Patiala, Delhi on 09.07.1992 and credited to the account opened in the name of one C. L. Swamy on 07.07.1982. C. L. Swamy was described as the Secretary of the donee trust and his signature was attested by P. P. Verma in the account opening form. P. P. Verma was a school teacher in New Delhi. His wife Pushpa Verma was the proprietor of M/s. Pushpam investment company which had opened an account in the same bank on 12.06.1982. The investigation revealed that the account of Pushpam Investment Company had been opened at the instance of Prem Prakash c/o. M/s. Usha International Ltd. The income tax authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad described himself as Prem Prakash c/o. M/s. Usha International Ltd., which is the assessee. 15. It is also significant to note that the cash book did not contain the name of the donee, though an entry had been made regarding the donation. Even in the donation account appearing in the assessee s ledger the name of the donee had not been entered when the survey was conducted on 06.10.1983 in the assessee s premises. However, the voucher No.408 prepared in support of the donation contained the name of the trust. The survey authorities impounded the cash book. 16. The further contention of the learned counsel for the assessee that the revised return withdrawing the claim for deduction under Section 35CCA was filed on 05.12.1983 voluntarily and without any prompting or provocation from the income tax department is not acceptable. The survey of the assessee s premises under Section 133A took place on 06.10.1983, two months prior to the date of filing the revised return. The survey itself was a result or as a follow up action to the searches and other inquiries conducted earlier. The cash book of the assessee was impounded during the survey for reasons stated in the preceding parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which would throw doubts on the bonafide of the assessee. 18. The other judgment relied upon on behalf of the assessee before us is that of a learned Single Judge of this Court in Sarvaria v. CWT, (1986) 158 ITR 803. There it was held that merely because there was a survey of agricultural properties showing that the assessee also owned agricultural lands, he could not be said to be under a constraint to make full disclosure of his net wealth. It was observed that the survey report cannot be equated with seizure of books of accounts of assessee or a search of his premises. It was also observed that if a return was filed before issue of a notice of inquiry and if the authorities had not detected any concealment in the return earlier filed, the revised return should be considered to be voluntary for the purpose of invoking the powers of waiver exercisable by CWT under Section 18(2A) of the Wealth Tax Act, 1957. We have to understand and appreciate this judgment in the light of the facts therein. The Court was concerned with Section 18(2A) of the Wealth Tax Act which granted the power to the CWT to waive penalty imposable for delay in filing the wealth tax returns. This Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout reference to the conduct of the assessee subsequent to the filing of the original return and that all the facts and circumstances commencing with the filing of the original return and ending with the assessment may be taken as relevant for considering the liability of the assessee for penalty. 20. In the judgment by a Division Bench of this Court in CIT v. S.A.S. Pharmaceuticals, (2011) 335 ITR 259 the factual position was different. A survey was carried out at the business premises and godown of the assessee on 06.01.2003 during which certain discrepancies in cash, stock and renovation details were found. The assessee surrendered an amount of Rs.88.14 lakhs during the survey on account of the discrepancies. However, at the time of the survey, the assessee was not under any obligation to file the return of income for the year ended 31.03.2003 as he still had time to do so. In the return filed for the assessment year 2003-04, relevant to the year ended on 31.03.2003, the assessee included the surrendered amount and filed a return of income declaring Rs.87.71 lakhs. The assessment was made including the surrendered amount obviously on the basis of return filed. Penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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