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TMI Blog2017 (5) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... re that in this case the assessee filed its return of income on 29.11.2004 declaring total income of Rs. 1,14,06,493/-. In this case assessment was completed u/s. 143(3) of the I.T. Act, 1961 vide order dated 10.11.2006 determining total income at Rs. 1,81,04,864/- by making various additions /disallowances. Against the assessment order, the assessee filed an appeal before the Ld. CIT(A) who vide his order dated 14.9.2007 partly allowed the appeal, against which no further appeal was filed before the ITAT. Thereafter, AO levied penalty of Rs. 19,00,000/- u/s. 271(1)(c) of the I.T. Act in respect of the following addition/ disallowances amounting to Rs. 62,11,255/- vide his order dated 30.1.2009. 3. Aggrieved with the aforesaid penalty order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 31.5.2011 has deleted the penalty in dispute allowed the appeal of the assessee. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. 5. Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal. He stated that voluntary disclosures does not release assesee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is not acceptable on account of the following reasons: (a) Surrender in closing stock of Rs. 60,58,065 made by the assessee company vide its letter dated 8.8.2006 tantamount to filing of a revised return, which is not permissible as the due date of filing the same u/s 139(5) i.e. 31.3.2006 has already elapsed. The assessee is well aware of this fact and that is why instead of filing a revised return, it has filed a revised computation of income. The provisions of the I.T. Act do not extend any credibility to a computation of income if it is not accompanied by the Income-tax return in the prescribed proforma. Accordingly, no cognizance shall be taken of the revised computation of income filed by the assessee company"............................................................................. ............................................................................. Thus, no cognizance shall be taken of the revised computation of income filed by the assessee company. The facts remains that the assessee company has deliberately understated its closing stock by an amount of Rs. 60,58,065, which was surrendered by it only after prior detection made by the undersigned. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only the income regarding which the Department has incriminating material, but has also disclosed the income with regard to which no incriminating material was seized by the Department, the disclosure of the income with regard to which the Department has no incriminating material, is liable to be treated as voluntary. For example, if an assessee is having five accounts and the Department has incriminating material with regard to one of those accounts only, the disclosure of income relating to four accounts with regard to which the Department has no incriminating material, is voluntary, because it was made without any constraint or compulsion, even though the disclosure of the income relating to the Juhi Investment Co. Pvt. Ltd. account regarding which the Department has incriminating material, is liable to be treated as non-voluntary. ' Dictionary: 42. Black's Law Dictionary (Seventh Edition) defines 'voluntarily' as intentionally or without coercion. It shall be appropriate to reproduce meaning of "voluntarily" and 'voluntary' as given in Black's Law Dictionary, which is as under: Voluntarily, adv. Intentionally; without coercion. Voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble ITAT, Delhi Bench in the case of Prem Chand Garg (supra) Addl. CIT v. Prem Chand Garg (2009) 31 SOT 97 (Delhi)(TM)/ (2009) 123 TTJ (Del)(TM) and that of the Hon'ble Punjab and Haryana High Court in the case of CIT v. Balbir Singh (2008) 304 ITR 125/ (2007) 164 Taxman 65 (Punj. & Har.). Therefore, such levy of penalty in respect of the addition of Rs. 60,58,065/- on account of suppression in closing stock is deleted. 4.4 With regard to the other four additions, I have considered the written submission on behalf of the appellant, the findings of the Assessing Officer and the facts on record. There is no dispute to the wellsettled legal proposition that the penalty proceedings are distinct and different from assessment proceedings. Findings in the assessment proceedings are not conclusive. The entire material available should be considered afresh by the Assessing Officer before imposing penalty uls 271(1)(c) of the Act. The Explanation to section 271(1)(c) provides a rule of evidence raising a rebuttable presumption in certain circumstances. No substantive right is created or annulled thereby. The substantive law relating to levy of the penalty is preserved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Ajaib Singh & Co. [2002] 253 ITR 630 have observed that merely because of certain expenses claimed by the assessee are disallowed by an authority, it cannot mean that particulars furnished by the assessee were wrong. It was held that mere disallowance of expenses per se cannot mean that assessee has furnished inaccurate particulars of its income. It is repeatedly held by the Courts that the penalty on the ground of concealment of particulars or non-disclosure of full particulars can be levied only when in the accounts/ return an item has been suppressed dishonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income, it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Further, conscious concealment is necessary. Even if some dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Allahabad High Court in the case reported in (1998) 230 ITR 855 : Bhairav Lal Verma v. Union of India [l998] 230 ITR 855, while interpreting the word voluntarily given in Section 273(A) of the Act held that voluntarily means out of free will without any compulsion. When the assessee concealed the incriminating material with regard to income so disclosed cannot be held to be voluntary. It shall be appropriate to reproduce the relevant portion from the judgment of Bhairav Lal Verma [1988J 230 ITR 855 (All) as under (page 862): 'The position thus settled is that the word "voluntarily" in section 273A of the Act means out of free will without any compulsion. Disclosure of concealed income after the Department has seized the incriminating material with regard to the income so disclosed, cannot be voluntary disclosure, because it was made under the constraint of exposure to adverse action by the Department. But it cannot be held as a principle of law that the disclosure of income made after the search/raid cannot be voluntary. It is a question which has to be decided by the Department in each case on the basis of the material on the record. If on record there is incriminatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a person obtained a passport acted on his own volition and knew the nature of his act and did not act in performance of a legal duty, nor due to coercion or fraud or misrepresentation or mistake he has acted voluntarily. 'Abdul Salam v. Union of India, AIR 1969 All. 223 at 228. [Citizenship Rules (1956) R. 30]" 7.3 From the said decision it is thus clear that voluntarily means out of free will without any compulsion. It is also observed therein that when the assessee concealed incriminating material with regard to the income disclosed by the assessee, disclosure cannot held to be voluntarily. Disclosure of income after the department has collected incriminating material with regard to the income so disclosed, cannot be voluntary disclosure, because it was made under the constraint of exposure to adverse action by the Department. In the present case, the AO has not collected any incriminating material against the assessee with regard to the closing stock of shares of Apollo Tyres valuing Rs. 60,58,065/- . The disclosure was made by the assessee through revised computation of income vide letter dated 8/8/06 and not under the constraint of exposure to adverse action by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding. For this proposition Ld. CIT(A) rightly relied upon the judgment of Hon'ble Kerala High Court in the case of CIT Vs. Pawan Kumar Dalmia [1987] 168 ITR 1 and the judgment of the Hon'ble Allahabad High Court in the case of Banaras Texturium Vs. CIT [1988] 169 ITR 782 and also the judgments of the Hon'ble Delhi High Court in the case of CIT V s. Chetandan Lachhmandas [1995] 214 ITR 726 and CIT v. lK. Synthetics Ltd. [1996] 219 ITR 267 (Delhi). 7.5 We further find that it is trite law that merely because an addition has been made in the assessment order and confirmed in appeal, levy of penalty is not automatic. In National Textiles Vs. CIT [2001] 249 ITR 125 the Gujarat High Court held that it is not enough for the purpose of penalty that the amount has been assessed as income, the circumstances must show that there was animus i.e. conscious concealment or act of furnishing inaccurate particulars on the part of the assessee. In the present case, the assessee's conduct and the explanation offered by it shows that there was no conscious or intentional act of assessee to conceal or furnish inaccurate particulars of income. 7.6 In view of the above, we are of the consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the inference that the assessee has concealed income or filed inaccurate particulars of income. Mere disallowance or not accepting the claim of the assessee will not be sufficient. In view of the above and taking into consideration the fact that the assessee had disclosed all material facts, it is held that there is no case of concealment or furnishing of inaccurate particulars of its income in respect of the disallowances. In view of above, we note that the case law relied upon by Ld. DR in the case of Mak Data (P) Ltd. vs. CIT-II (Sura) is relating to voluntary disclosure and hence, distinguished to the facts and circumstances of the present case. In view of the above, we are of the considered opinion that Ld. CIT(A) has rightly held that the AO was not justified in levying penalty u/s. 271(1)(c) in respect of the said disallowances. Accordingly, the same was rightly cancelled, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) in deleting the penalty in dispute and reject the ground raised by the assessee.
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 26/05/2017. X X X X Extracts X X X X X X X X Extracts X X X X
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