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TMI Blog2011 (6) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... ted them as non-est and proceeded to act on the original return filed on 31.10.98. In the revised return, assessee withdrew the excess amount of expenditure debited to the Profit Loss Account amounting to ₹ 3,90,52,618/-. In the assessment proceedings, assessee submitted the said excess claims of expenditure were made in the Profit Loss Account based on some random data with regard to a couple of head of expenditure i.e. (i) Sugar Cane Price and (ii) H T Contractors comprising of 12 items. A.O. compared the said claims with the printed Annual Reports and found the claims made in P L Account filed in the return of income did not tally with the printed account report figures. Relevant details as per the said documents are as under : S.No Head of Expenditure Amt shown in Original return Amt as per Annual Report Difference 1. Cane price Rs.14,04,82,080/- Rs.12,51,26,531/- Rs.1,53,55,549/- 2. H T Contractors Rs.5,39,73,298/- Rs.3,02,77,229/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 and 29/12/2000 to eliminate these discrepancies. The addition travelled to the CIT(A) wherein CIT(A) dismissed the relavant grounds as infructuous in view of the assessee s revision of the claims by way of the invalidly revised returns. Said issues wer not subject matter in the appeal before the Tribunal vide IT No. 708/PN/2005 dt. 16.12.2005. Thus, the quantum appeal attained finality. However, the AO initiated the penalty proceedings u/s 171(1)(c) of the Act on this addition of ₹ 3,90,51,618/- as per the procedures relevant for the penalty proceedings. During the proceedings, it is submitted that the said discrepancy has two segments, (i) on account of sugar cane price and (ii) on account of H T contractors. The later one has number of sub items running in to nearly 12 items and these are listed in page 1 of the paper book. 4. As far as excess claim relating to the sugar cane price is concerned, the assessee has adopted cane price at random at the rate of ₹ 700/- per M.T. and the same was claimed in the return of income amounting to ₹ 14,04,82,080/-. This figure was belatedly and invalidly revised and kept at ₹ 12,51,26,531/- and the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,36,64,066/-). 5. Aggrieved with the above levy of penalty, assessee filed the appeal before the CIT(A). Assessee submitted before him that the cane purchase price payable to members and non-members was provided at ₹ 745/- per M.T. and other payments was provided at ₹ 755/- per M.T. against the price order of the Directorate of Sugar Federation at ₹ 648/- per M.T. and ₹ 850/- per M.T. respectively. Assessee relied on the voluntary nature of the revised returns filed before the A.O. He argued that assessee is free from any guilt as he has already intimated the actual price before the Revenue both by way of printed Annual Accounts as well as the revised returns. CIT(A) considered the above submissions and concurred with the A.O on the issue that the returns which are filed beyond time have to be treated as non-est, therefore, they are never filed in the eye of law. Further, CIT(A) discussed the provisions of Sec. 139(5) and mentioned that the revision made in the revised returns are outside the scope of omission or wrong statements . He also reasoned the failure to revise the return validly under the provisions of Section 139(5) of the Act immediately on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is held that the excess amount claimed by the appellant on account cane price and Harvesting Transport contractors amounting to ₹ 1,53,55,549/- and ₹ 2,36,96,069/- was at best in nature of contingent liability. By claiming this liability to the extent of ₹ 3,90,51,618/- in the return of income filed u/s. 139 which is at best in the nature of contingent liability as accrued liability, the appellant has furnished inaccurate particulars of income in the return filed u/s. 139(1) of the Income tax Act, 1961 and, therefore, action u/s. 271(1)(c ) was clearly attracted. 5.4 The appellant has placed reliance on the case of K.C. Builders decided by Hon. Supreme Court and reported in 265 ITR 562 in support of its contention that mensrea of deliberateness is required for the act of concealment of income. In this regard, it may be mentioned that the case of the appellant is clearly distinguishable on facts from those in the case of K.C. Builders in as much as it is held that in case of the appellant Explanation 1 to Section 271(1)(c ) of the Income tax Act, 1961 was clearly attracted because the appellant has failed to rebut the presumption of concealment as containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, emphasizing on the voluntary act of revising the return by the assessee for withdrawing the excess expenditure claims, Ld. Counsel argued that the said act indicates the intention of the assessee in disclosure of the facts to the Department. The disclosure of information in the printed Annual Account also substantiates the voluntary disclosure of information. Referring to the audit reports, the Counsel read out the notes in conveying the assessee s intention to revise the claims of sugar cane price in the returns on receipt of the orders of the Government in this regard. Further, the Ld. Counsel relied on various decisions to mention that this is not a fit case for levy of penalty. 7. On the other hand, Ld. D.R. for the Revenue mentioned that the return of income is the starting point for determining the concealment. In this case, assessee made a wrong claim in the return by making an excessive deduction of expenditure on account of Cane price, Khodki charges and Cane Development expenses. So far as the Cane purchase price is concerned, the Sugar Commissioner s order dated 3rd March 1999 is available, but the assessee chose not to revise return till December 2000 i.e. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied u/s. 271(1)(c ) of the Act. On the other hand, the case of the Revenue is that the note in the audit report appended to the original return of income/loss covers only the claims relating to sugar cane price and not H T Expenses -12 other items; the ther is no reasonable cause for the delay in revising the return relating to sugar cane price for the period later to March 1999 etc. Revenue is of the opinion that the assessee has no reason to file the revised return after lapse of 22 months commencing from 3rd March 1999, the date of the letter of the Sugar Commissioner. Further, . there is no information as to what made the assessee to revise the claim on account of Khodki Development expenses and Cane Development expenses. The explanation of the assessee does not meet the requirements, therefore, the levy of penalty u/s. 271(1)(c ) is justified in this case. 9. We have considered the above divergence of views of the parties on the issue. Regarding the admittance of the additional evidences to support the reasons for claim of excess expenditure, we find that the documents relates to the reasons that led to the claim of excess expenditure relating to H T expenditure and 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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