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TMI Blog2015 (4) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of the word "direction" as contemplated even in the amended provisions of law. The direction should be clear and without any ambiguity. A direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and discretion of the Income-tax Officer whether or not take action, it cannot be described as a direction. It is settled law that in the absence of the existence of these conditions in the assessment order penalty proceedings could not be proceeded with. The proceedings which are initiated contrary to the said legal position are liable to be set aside. Therefore, the appellate Authority was justified in setting aside the order imposing penalty. Accordingly, the substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned amendment and therefore, it is a bona fide mistake and not a case of deliberately furnishing of inaccurate particulars and submitted that the penalty proceedings should be dropped. Similarly, in respect of compensation also, it was contended that it was a bona fide mistake. However, the Assessing Authority did not accept the explanation and held that it is a case of deliberately suppressing of income and furnishing of inaccurate particulars and therefore, levied penalty. 3. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income Tax. The Commissioner accepted the explanation offered by the assessee and held the exercise of power by the Assessing Authority to impose penalty was not in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the explanation, has been discharged by him, the onus shifts on the Revenue to show that the amount in question constituted the income and not otherwise. 8. Assessee has only stated that he had surrendered the additional sum of ₹ 40,74,000/- with a view to avoid 7 litigation, but peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statue does not recognize those types of defences under the explanation 1 to Section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the Appellant - assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961 . 6. There cannot be any argument with regard to the aforesaid legal preposition laid down by the Apex Court. This is not a case of voluntary disclosure or payment of tax to buy peace or to avoid litigation or by amicable settlement. The assessee categorically stated his claim was based on the law which was in force in the previous year. He was not aware of change in law. He relied on his advocate who was not up to date with the law. In those circumstances, the set-off which was legal and valid for the previous year was putforth for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings are being initiated separately, and (b) penalty proceedings under section 271(1)(c) are initiated separately, do not comply with the meaning of the word direction as contemplated even in the amended provisions of law. The direction should be clear and without any ambiguity. A direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and discretion of the Income-tax Officer whether or not take action, it cannot be described as a direction. It is settled law that in the absence of the existence of these conditions in the assessment order penalty proceedings could not be proceeded with. The proceedings which are initiated contrary to the said legal position are liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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