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TMI Blog2015 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, a search and seizure operation was also conducted in case of assessee. In pursuance to search and seizure operation, notices u/s 153A of the Act were issued to assessee calling upon him to furnish his return of income for AYs 2005-06 to 2009-10. In response to the said notice, assessee filed his return of income for the impugned assessment year on 20/12/2010 declaring total income of Rs. 1,14,840 which was also the income declared in the original return filed on 02/01/2006. During the assessment proceeding, AO on the basis of information available with him found that assessee has moved an application before Settlement Commission wherein it has been stated that while working as Manager with JB Group of Institutions, he acted as consultant in getting students for being admitted and in the process he has collected excess fee over the prescribed amount without the knowledge of management. Therefore, he offered to disclose the excess fees collected by him as his income and paid taxes thereon. In accordance with the offer made by assessee in the application filed before the Settlement Commission, assessee not only computed undisclosed income of Rs. 8,18,63,700 for AYs 2005-06 to 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from him u/s 132(4), but, it was also declared in the application filed before the Settlement Commission and taxes were also paid. It was submitted, assessment order was also passed solely on the basis of the declaration made by assessee before the Settlement Commission. Therefore, there cannot be any concealment of income or misrepresentation of facts by assessee. It was further submitted, AO has not found any income that was not known to the department. In support of his contention, assessee relied on certain judicial precedents. Ld. CIT(A) after considering the submissions of assessee in the context of facts and materials on record, noted that though assessee in the application made before the Settlement Commission had offered additional income of Rs. 8,18,63,700 for the AYs 2005-06 to 2009-10 and also paid taxes on them, however, the Settlement Commission rejected application on the ground that unaccounted income disclosed in the application filed by assessee was not true and did not pertain to him. She further noted that in case of M/s JB Educational Society and M/s Joginapally BR Educational Society appeals were filed before ITAT challenging similar additions made. In course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an affidavit of Shri R. Kondal Rao filed wherein it is stated that Sri R. Kondal Rao has admitted excess fees collected as his additional income before the Settlement Commission. On the basis of the declaration made by Sri R. Kondal Rao in the affidavit, Tribunal deleted the addition made at the hands of educational institutions since already the amount has been assessed at the hands of Sri R. Kondal Rao. Ld. AR submitted, in the aforesaid facts and circumstances, it cannot be said that assessee has concealed his income considering the fact that the departmental authorities themselves were not sure at whose hands income is to be assessed. Ld. AR referring to the decision of ITAT Hyderabad in case of Sun Infra Vs. ACIT, 30 ITR (Trib) 451 submitted, when assessee from initial stage of search and seizure operation proceeding has consistently offered the additional income and there is no other material before AO to either prove concealment of income or furnishing of inaccurate particulars of income, rather, on the basis of the declaration made by assessee, assessments have been completed, imposition of penalty is not justified. 6. Ld. DR, on the other hand, submitted before us, asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of unaccounted capitation fees in cash. In fact, Shri Vamsidhar Rao admitted this position and offered an undisclosed income of Rs. 7.5 crores for taxation on this account. This was on 10/09/2009 (Answer to Q. No. 45 of the Statement of Shri J. Vamsidhar Rao.) This declaration was later on confirmed not only by Shri J.Bhaskar Rao who is the main person of the group but also by his other son Shri J.K. Rao. The offer of disclosure of such income has been reiterated a number of times by Shri J. Bhaskar Rao and his sons. ii) We also find that Shri K. Ashok Mehta Reddy, Shri Purnachandra Rao Pusti and Shri Ganji Meghnath have categorically stated in their statements that they were merely negotiating on behalf of Shri Bhaskar Rao and whatever unaccounted capitation fees was received in cash was handed over to Shri Bhaskar Rao. They have further admitted that even the quantum of unaccounted capitation fees was fixed in consultation with Shri J. Bhaskar Rao. We have noted that, at different points of time both during and after the search, Shri Bhaskar Rao, Shri Vamsidhar Rao and Shri J.K. Rao have confirmed the correctness not only of their own statements but also those given by S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m these facts, it is clear that departmental authorities themselves were not sure as to at whose hands income is to be assessed or whether the income actually belongs to assessee. Further even though, assessee offered additional income before the Settlement Commission, but, the Settlement Commission on appreciation of evidences available before it refused to accept assessees claim that additional income is pertaining to assessee. Therefore, when the departmental authorities are themselves not sure about the real owner of income and in fact when there is conflict of opinion between the Settlement Commission and A.O. on the ownership of income, assessee cannot be proceeded for imposition of penalty u/s 271(1)(c) only because he has come forward to offer such income or it has been assessed in his hands for whatever may be the reason. 9. Though, it may be a fact that in course of hearing of appeal in case of educational institutions before ITAT, an affidavit was filed by Sri R. Kondal Rao, present assessee, wherein it is stated that excess/capitation fees collected was not handed over to the management and it is his income but on scrutiny of the said affidavit, as has been extracted i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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