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TMI Blog2006 (5) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... and on the true and correct interpretation of the provisions of law, the Tribunal was justified in upholding the levy of penalty whereas there is a difference between the initiation of the enquiry proceedings and detection of the income by the Department? 3. That, whether under the facts and circumstances of the case and on the true and correct interpretation of the provisions of law, the Tribunal was justified in upholding the levy of penalty treating the return filed as non est though the revised return filed having been accepted during the penalty proceedings." At the time of hearing, question No. 1 was sought to be substituted and question No. 4 was sought to be added to the following effect: "1. That, whether under the facts and circumstances of the case and on the true and correct interpretation of the provisions of law, the Tribunal was justified in upholding the levy of penalty whereby the revised return having been filed voluntarily and the surrender being made without initiation of the enquiry before the detection of any undisclosed income. 4. That, whether under the facts and circumstances of the case, the finding of the Tribunal is perverse in mentioning that Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1989) 178 ITR 643(P&H); CIT vs. J.K.A. Subramania Chettiar 1978 CTR (Mad) 35: (1977) 110 ITR 602(Mad); Amjad Ali Nazir Ali vs. CIT 1976 CTR (All) 217: (1977) 110 ITR 419(All); Addl. CIT vs. Radhey Shyam (1979) 9 CTR (All) 171: (1980) 123 ITR 125(All) and Mahavir Metal Works vs. CIT (1973) 92 ITR 513(P&H) were held to be applicable. It was held that the assessees furnished inaccurate particulars of income. Penalty equal to 100 per cent of the tax was levied. On appeal, the CIT(A) upheld the order. The explanation that agricultural operations were being managed through one Mr. Palla of village Khurza was found not to be acceptable. The order of the CIT(A) has been affirmed by the Tribunal. In paras 17 to 23, the Tribunal held as under: "17. As per settled law, the question of concealment of income or furnishing of inaccurate particulars of income for purposes of s. 271(1)(c) of the IT Act is to be determined with reference to the original return. Even if income is surrendered in the revised return, the assessee still have to explain why the income was not shown and why inaccurate particulars of income were furnished in the original return. In case of bona fide error or a case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); CIT vs. Haji P. Mohammad (1981) 23 CTR (Ker) 39: (1981) 132 ITR 623(Ker); Kumar Jagadish Chandra Sinha vs. CIT (1982) 26 CTR (Cal) 323: (1982) 137 ITR 722(Cal); Nav Nirman Co. vs. CIT (1984) 43 CTR (MP) 302: (1984) 148 ITR 703(MP); Union Engineering Co. vs. CIT (1980) 14 CTR (Ker) 146: (1980) 122 ITR 719(Ker); Addl. CIT vs. Radhey Shyam (1979) 9 CTR (All) 171: (1980) 123 ITR 125(All); Badshah Prasad vs. CIT (1981) 127 ITR 601(Pat); CIT vs. P.T. Antony & Sons (1984) 42 CTR (Ker) 86: (1985) 151 ITR 34(Ker). 19. It is evident from above that the question of filing of revised return or claim of surrender/disclosure of income before its detection is immaterial for purpose of s. 271(1)(c) where default is intentional in the first return. As explained by their Lordships of Madras High Court in the case of CIT vs. J.K.A. Subramania Chettiar (supra) 'surrender before detection' is relevant for purposes of waiver or reduction of penalty under s. 271(4A) (now 273A) of IT Act or various voluntary disclosure schemes issued by the Government from time to time enabling the assessee to disclose income which they earlier did not disclose in the return. The benefit of scheme is granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be proved by the Revenue. 21. The learned counsel for the assessee, however, contended that surrender made in the revised return was subject to certain conditions. There is no provision to make a conditional surrender. At any rate, the assessee having admitted so-called agricultural income as part of total income, the Revenue had nothing further to prove. The Revenue could rely upon assessee's admission. But this admission like other admissions could be proved to be erroneous and not reliable. But except assertion and arguments, nothing has been done by the assessee. Further, it was open to the assessee to establish that the amount surrendered was in fact, agricultural income and rightly shown in the original return notwithstanding the surrender. But no material is available on record to prove any assertion or claims of the assessee. The findings of learned CIT(A) on any of the facts found by her have not been shown to be erroneous. Her decision not to admit additional evidence sought to be filed before her has not been challenged before me. No material whatsoever has been placed before me to show that the assessee had income from agriculture as shown in the original retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and once assessing authority had failed to take any objection in the matter, the declaration of income made by the assessee in his revised returns and his explanation that he had done so to buy peace with the Department and to come out of vexed litigation could be treated as bona fide in the facts and circumstances of the case. Therefore, the Tribunal was justified in cancelling the penalty levied by the AO and affirmed by the CIT(A) in the facts and circumstances of the case. This reference is accordingly answered in the affirmative holding that the Tribunal was justified in doing so.' 23.2 From the above, it clearly emerges as under : (i) The Tribunal as a finding of fact found that the AO did not consider explanation of the assessee, not recorded any finding of its acceptability or otherwise. (ii) That Expln. 1 to s. 271(1)(c) was not attracted and the Revenue failed to prove that there was concealment of income. (iii) That surrender was made by the assessee in good faith and to buy peace with the Department and to come out of vexed litigation." 4. The above discussion by the Tribunal clearly shows that it was not a case of bona fide voluntary disclosure but only t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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