9911796707
TMI Blog2014 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 4) The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 2.Assessee,an individual engaged in the business of Real Estate Consultancy and Broking,filed his Return of Income on 30.10.2006,declaring an income of Rs. 12,31,330/-.AO finalised the assessment u/s.143(3) of the Act,on 26.02.2007,determining the total income at Rs. 28,60,628 /-. A Survey action u/s.133A of the Act was conducted at the business premises of the assessee on 14/11/2006 and certain Registers,Books and Loose Papers were impounded.He admitted in the statement,recorded on oath,that he had accepted Brokerage/commission in cash, that where-ever the Customers had not insisted on receipts for payments no receipts was issued, that such income had not been accounted for as income in the books of account.He estimated such income at Rs. 75 lakhs and declared the same as undisclosed income for A.Y.2006-07over and above the income declared in the original Return filed.Accordingly,he revised his return of income on 20/11/2006 declaring total income at Rs. 87,31,330/-. 2.a.During the course of assessment proceedings,the AO verified the impounded books/ docum - ents.He foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared additional income and cash receipts that were not recorded in the books of accounts and impounded during the course of survey action,that declaration came in the revised return subsequent to the findings made in survey and not in the original return filed by the assessee. Finally,he levied a minimum penalty of Rs. 9.65 lakhs u/s. 271(1)(c) of the Act. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA).After considering the assessment order,penalty order and the order of the Tribunal in quantum proceedings,submissions made by the assessee,FAA held that the amount declared by the assessee i.e. Rs. 75 lakhs as undisclosed income for the AY 2006-07 was much more than the discrepancies found by the AO,that declaration made by the assessee was accepted by the department.Relying upon the order of Bhagat & Co. 101 TTJ 553,FAA deleted the penalty levied by the AO. 4.Before us,Departmental Representative (DR)stated that the assessee had filed the revised return after the department had found the concealment of income by him,that the admission by the assessee was not a voluntary act,that the FAA had not taken in to consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs,even if it takes the case out from the purview of non-disclosure. d.Though the term inaccurate particulars is not defined,yet the words inaccurate particulars signify an act or omission on the part of the assessee.Such an act can be either for the purpose of concealment of income or furnishing inaccurate particulars.Hon'ble Rajasthan High Court has,in the case of Yashwant Singh (212ITR207),held that the word inaccurate particulars have also to be interpreted to mean the action of an assessee as a result of gross or wilful neglect on his part, that there may be a case where the additions have been made purely on estimate without going into the details of the expenditure incurred,that in such a case,penalty cannot be levied on the figures which are merely based on guesswork or estimate,that in a case where a detailed enquiry is made and the assessee is confronted with the evidence and has not been in a position to rebut the factual position on the basis of which the additions have been made,the decision stands on a different footing. e.The applicability of section 271(1)(c) of the Act does not depend on the consent or otherwise of the assessee.(124ITR376). 5.b.As a proposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings the onus on the department is discharged.In that situation the assessee is put to proof and it is open to the assessee to prove in the penalty proceedings that the admission made by him during the course of assessment proceedings was wrongly or illegally made or was incorrect.He can lead evidence during penalty proceedings to show that he had not concealed any income or furnished inaccurate particulars thereof. If he fails to prove this, the income-tax department would be justified in levying penalty on him u/s.271(1) (c) of the Act.(92ITR513). The Hon'ble Bombay High Court had an occasion to deal with the issue of filing of revised return and levy of concealment penalty under the Indian Income tax Act,1922 in two cases namely Vadilal Ichhackand(32ITR569)and Jaybhai Girdharbhai(32ITR677).In the first case the Hon'ble Court held that the assessee's contumacy in deliberately having omitted to file an original return disclosing the correct and accurate particulars cannot be got rid of by merely filing a revised return and that penalty would be attracted despite the fact that the original return has been subsequently corrected by a revised return.In the case of Jaybhai(su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .In disposing of the said appeal the Tribunal observed that whether an assessee had concealed income or not was a matter of fact and one needed not go into the gamut of cases which were decided on the facts of the respective cases,that the filing of the second return (sic-revised)spoke loudly about the conduct of the assessee which could not be said to be anything else than mala fide (sic-dishonest) and filing of another return did not obliterate the fact of the earlier mala fide(sic-dishonest) return and that the assessee had furnished wrong particulars of the stock with a view to suppress the income and, therefore, was liable to be penalised and thus the AO was justified in levying the minimum penalty in view of the subsequent conduct of the assessee filing another return and paying the due tax.The Hon'ble Court relied upon the case of Suresh Chandra Mittal (251ITR9). Before the Hon'ble Court it was argued on behalf of the assessee,that the assessee was entitled to file a revised return in terms of section 139(5) of the Act at any time as prescribed therein and having filed the same and the AO having accepted the same there was no room to levy any penalty.Dismissing the appeal,Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sarangan, learned counsel for the assessee, urged that the assessee agreed to the assessment and thereby the Revenue had the benefit of non-contest of the order by way of appeal, etc., and, there-fore, penalty should not have been levied. We are constrained to reject the assessee's contention. We are pained to note that the Appellate Tribunal completely ignored the assessment order which was not based on any concession by the assessee.Concealment of income in the return filed by the assessee is a glaring fact, in the instant case. It is not possible to infer any agreement by the Revenue, either in clear terms or by necessary implication, to act on the basis of the assessee's letter. The assessee has to thank himself that the Income-tax Officer levied the minimum penalty only.(emphasis by us)" Now we would like to discuss the matter of Popular Lunghi Co.delivered by the Hon'ble High Court of Madras(238ITR229).In that matter subsequent to the completion of assessments for the assessment years 1967-68,1968-69 and 1969-70, there was a survey operation of the business premises of the assessee u/s.133A of the Act.The reports and documents found during the course of survey accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money-lending business in the original returns, and it was only after the voluntary disclosure petition and in pursuance of the notice u/s.147(a) of the Act, that the assessee filed its returns and in the returns so filed it had disclosed the income from money lending business. Therefore, the decision rendered for the subsequent assessment years would not apply. (ii) That the assessee had readily agreed to the inclusion of the amount as its income and when the assessee itself had admitted that it had not disclosed the income in the original returns and not accounted for the same in the regular books of account maintained by it, no further evidence would be necessary to show that the amount disclosed in the reassessment proceedings was its income and it represented its concealed income. The Tribunal had also overlooked that the AO had invoked the Explanation to section 271(1)(c) of the Act, and the assessee had not discharged the burden cast on the assessee by the Explanation u/s.271(1)(c) of the Act.Therefore, the Tribunal was wrong in cancelling the penalty." 5.d.An analysis of above discussion lead us to the following general principles: i.)Section 139(5)and section 271(1)(c)o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or wrong statement in the original return,then in such a case,penalty for concealment of particulars of income or for furnishing inaccurate particulars of such income,as contemplated u/s.271(1)(c),cannot be imposed." (294ITR105) v).Levy of penalty for concealment of income is justified in a case where a bogus claim for depreciation on non-existing assets is made and later on claim is withdrawn in the revised after a search is carried out in the case of the assessee.(300 ITR 342). 6.Coming to the facts of the case before us,it is found that the assessee had filed the revised return only after the survey action,therefore,it cannot be held that it was a voluntary return.It is not the case of the assessee that there were bonafide mistakes in the original return filed by him that were intended to be rectified by the revised return.During the course of survey,it was noticed by the Department that the assessee had accepted Brokerage/ commission in cash, and whereever the Customers had not insisted on receipts for payments no receipts was issued, that such income had not been accounted for as income in the books of account.When the assessee was confronted with these findings,he filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material found during the survey conducted at his business premises. As far as matter of SAS Pharmaceuticals(supra)is concerned it that case return was not due and the assessee had offered the additional income for that year when he had filed the return.In the case under consideration,original return had already been filed.In the case of Reliance Petro products (supra),Hon'ble Apex Court had held that no information given in return found to be incorrect, that for that reason penalty could not be levied u/s.271(1)(c)of the Act.In the case before us,facts are totally different.The assessee not disclosed a part of his income,while filing his return and it was only after the survey that he revised the return.In short ,if the entirety of circumstances is taken into consideration and the conduct of the assessee from the inception to the conclusion of the assessment proceedings is viewed,it can safely be said that an intention of concealment of true particulars of income or deliberate furnishing of inaccurate particulars by the assessee was established by the AO.In this matter the AO had not accepted any conditional admission,rather his order is based on facts relevant for ..... 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