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TMI Blog2014 (2) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... come disclosed by the assessee itself, is fallacious - Merely because the disclosure of additional undisclosed income was made by the assessee prior to any notice from the Assessing Officer would not lead to a presumption that the Assessing Officer could not have detected the concealed income. Second proviso to Section 158BC is mandatory and the provision under Section 158BFA is also mandatory subject to the conditions mentioned - thus, the intention of the assessee is immaterial Relying upon Chairman, SEBI Vs. Shriram Mutual Fund and Anr. [2006 (5) TMI 191 - SUPREME COURT OF INDIA] - An assessee is not entitled to file revised return, once the return under Section 158BC is filed - The provisions under Section 158BFA is also mandatory and therefore, irrespective of the intention of the assessee, the undisclosed income disclosed by the assessee after filing the return under Section 158BC, would attract penalty - The plea of non-supply of documents is not available to the assessee for filing a revised return though, such a plea may be available to the assessee for challenging the final order on the ground of violation of the principles of natural justice thus, the matter remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to defraud the Revenue. Lastly, it was contended that since there was no willful concealment on the part of the assessee nor any inaccurate particular has been furnished and since, the penalty proceeding under Section 158BFA of the Act and the penal proceeding under Section 271(1)(c) of the Act are separate and exclusive proceedings, no penalty could have been imposed on the assessee on the additional disclosure made by the assessee on 16.08.1999. The Assessing Officer assessed the undisclosed income of the assessee at Rs. 1,83,76,129/and after deducting the undisclosed income of Rs. 1,17,00,000/disclosed by the assessee, worked out the net concealed income at Rs. 66,76,129/vide assessment order dated 14.09.1999. A notice under Section 158BFA of the Act was issued to the assessee for compliance by 22.09.1999 and accordingly, the assessee filed its reply to notice under Section 158BFA. The Assessing Officer did not accept the assessee s contention and explanation and accordingly, the Assessing Officer imposed penalty under Section 158BFA of the Act amounting to Rs. 40,05,677/. 4. The assessee preferred Appeal before the CIT (Appeals) reiterating its stand taken before the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee filed a disclosure petition on 15.12.1998, disclosing an income of Rs. 117.00 lacs and a detailed disclosure petition was filed on 22.02.1999. In these circumstances, without waiting for photocopies of the documents, the block return was filed on 01.03.1999. Again, the assessee moved a petition on 30.07.1999 for allowing xerox copies of such materials and thereafter, the assessee voluntarily disclosed an additional undisclosed income of Rs. 58,20,815/through affidavit dated 16.08.1999. The disclosure was made prior to any notice of date of hearing as, the first notice under Section 143(2) of the Act was issued on 24.08.1999. It was further submitted on behalf of the assessee that there was no malafide intention on the part of the assessee to defraud the Revenue. The assessee had offered for adjustment of the tax out of seized assets and the income which was finally assessed do not include any addition on the income returned and disclosed through affidavit filed by the assessee and therefore, the Assessing Officer was not justified in imposing penalty. 7. The learned Tribunal held that there is no material on record to show that the assessee was provided photocopies of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on 01.03.1999 was itself belated, the plea taken by the assessee for not disclosing the concealed income fully on the ground of nonsupply of photocopy of the seized documents was not believable, has been interfered by the appellate forum on an erroneous presumption that there is no material on record to show that the assessee was provided photocopies of the entire seized material before filing of the return for the block period. 9. Per contra, Mr. B. Poddar, the learned Senior counsel appearing for the respondentassessee submitted that in view of the fact that the copies of the documents and Hard Disc were not provided to the assessee, the revised return filed by the assessee disclosing on its own an additional undisclosed income of Rs.58,20,815/cannot be subjected to penalty. The learned Senior counsel submitted that this is not a case in which the assessee has filed additional return reducing its income rather, it is a case where the assessee has filed the return disclosing additional undisclosed income on its own and therefore, no penalty could have been imposed by the Assessing Officer. The learned Senior counsel for the respondentassessee has relied on following judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... block period shall not include the income assessed in any regular assessment as income of such block period; (c) the income assessed in this Chapter shall not be included in the regular assessment of any previous year included in the block period. Second proviso to Section 158BC Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return. Section 158BFCertain interests and penalties not to be levied or imposed No interest under the provisions of section 234A, 234B or 234C or penalty under the provisions of clause (c) of subsection (1) of section 271 or section 271A or section 271B shall be levied or imposed upon the assessee in respect of the undisclosed income determined in the block assessment. First proviso to Section 158 BFA(2) Provided that no order imposing penalty shall be made in respect of a person if ( i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable; (iii) evidence of tax paid is furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer would not lead to a presumption that the Assessing Officer could not have detected the concealed income. The provision under Section 158BB clearly says that, undisclosed income would be computed on the basis of evidence found, as a result of search or requisition of books of accounts or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence . 14. The additional affidavit filed by the assessee would be a material and information available to the Assessing Officer and therefore, the affidavit filed by the assessee can form the basis of information based on which the undisclosed income of the assessee would be calculated. Since the affidavit dated 16.08.1999 was filed after the filing of the return on 01.03.1999, the Assessing Officer has rightly treated the undisclosed income disclosed by the assessee through affidavit dated 16.08.1999, as concealed income. In this view of the matter, the contention raised on behalf of the respondentassessee that, since a revised return on higher side was filed on its own, no penalty can be imposed on the additional amount disclosed in the revised return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing which requires that mens rea must be proved before penalty can be imposed under these provisions. Hence once the contravention is established then the penalty is to follow. 17. In Union of India and Ors. Vs. Dharamendra Textile Processors and Ors. , reported in (2008) 13 SCC 369, the issue which was referred before the Hon'ble Supreme Court was, whether Section 11AC of the Central Excise Act, 1944 imposing mandatory penalty on persons who evaded payment of tax should be read to contain mensrea as an essential ingredient. Approving the decision in Chairman, SEBI Vs. Shriram Mutual Fund (supra), the Hon'ble Supreme Court has held that willful concealment is not an essential ingredient for attracting civil liability. In view of the mandatory provision contained in second proviso to Section 158BC, the plea of bona fide intention taken by the assessee is of no consequence. 18. The learned Senior counsel for the respondentassessee further contended that though second proviso to Section 158BC provides that the assessee is not entitled to file a revised return, there is no provision in the Act which provides for imposition of penalty on filing of additional/revised return. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the purpose of assessment and therefore, penalty in such cases would not be attracted is erroneous. The substantial question of law, whether in view of second proviso to Section 158BC of the Act, the income disclosed by the assessee in the form of revised return would be liable for penalty or not , is answered in favour of the Revenue. 21. In view of the aforesaid discussion, we hold that an assessee is not entitled to file revised return, once the return under Section 158BC is filed. The provisions under Section 158BFA is also mandatory and therefore, irrespective of the intention of the assessee, the undisclosed income disclosed by the assessee after filing the return under Section 158BC, would attract penalty. The plea of nonsupply of documents is not available to the assessee for filing a revised return though, such a plea may be available to the assessee for challenging the final order on the ground of violation of the principles of natural justice. 22. In the light of our observation, that the second proviso to Section 158BC(ii) is mandatory and that the assessee is not entitled to file a revised return, the matter has to be remitted back to the CIT (Appeals) for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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