9911796707
TMI Blog2003 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ady found material to show that there has been concealment, that would mean the Department has detected the concealment . . .', the Tribunal is right in the light of the material seized in holding 'according to the answer given to question No. 19 of the Central Board of Direct Taxes Circular No. 451, the Assessing Officer had only prima facie belief about the concealment and the concealment had not been detected categorically prior to the filing of the return by the assessee on April 23, 1986' and is not the finding wrong, inconsistent and militating against the circular ? 3. Whether, on the facts and in the circumstances of the case and in view of the knowledge/awareness of the Officer as to the contents of the materials seized including the contents of a slip of paper marked '11' containing details of the adjustments made in the accounts to understate the income while filing the returns, the Tribunal is right in law and fact in holding that concealment had not been detected and accordingly cancelling the penalty? 4. Whether, on the facts and in the circumstances of the case and in the light of the findings noted at the beginning of the penalty order that documents were seized, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 271(1)(c) of the Act stating that concealment of income was found during the course of the assessment proceedings. Rejecting the objections filed by the assessee, the Assessing Officer passed an order imposing penalty under section 271(1)(c) of the Act on June 26,1995. In appeal by the assessee, the Commissioner of Income-tax (Appeals)-II, had allowed the appeal cancelling the penalty. This was confirmed by the Tribunal in appeal filed by the Department. Sri P. K. R. Menon, senior Central Government standing counsel for taxes appearing for the appellant, submits that the Officer imposing penalty had entered a clear finding in paragraph 7 of the penalty order that the assessee had concealed the particulars of its income and such concealment was detected by the Department during the course of search and seizure operations, conducted on April 9, 1986, and therefore, the revised return filed on April 23,1986, cannot be treated as a voluntary return, so as to entitle it to the benefit of the "amnesty scheme". Senior counsel submits that in order to avail of the benefit of the amnesty scheme, the return must be a voluntary return submitted prior to detection by the Department. Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Officer imposing penalty had entered a categoric finding that concealment was detected by the Department during the course of search and seizure operations, both the appellate authorities were not justified in cancelling the penalty. Senior counsel alternatively submitted that the order of the Tribunal has to be set aside, and the matter remitted to the Tribunal for consideration of all the matters. Learned counsel appearing for the respondent-assessee, on the other hand, submitted that though a search at the business premises of the firm and its partners was made on April 9, 1986, and certain documents were seized, neither the Officer conducting the search nor the Assessing Officer had processed the seized material at any point of time earlier to the filing of the revised return on April 23, 1986, and, therefore, it cannot be said that the Department had detected concealment of income earlier to the filing of the revised return dated April 23, 1986. Counsel submits that the assessee had filed the revised return for the purpose of availing of the benefit of the amnesty scheme declared by the Central Board of Direct Taxes in its various circulars including Circular No. 451, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on October 30, 1987, on a total income of Rs. 2,00,900, that is by making an addition of Rs. 2,250 to the income returned in the revised return. From the penalty order (annexure A), it has been stated that the Assessing Officer, in the course of the assessment proceedings had found concealment, and therefore, he had issued a notice under section 274 read with section 271(1)(c) of the Act for imposition of penalty. The Officer had referred to slip No. 11 seized in the search and observed that there is clear evidence that the assessee had concealed the income to the extent of Rs. 1,65,500 while filing the original return and that this concealment was detected by the Department during the course of search operations on April 9, 1986. It is in this background that the Officer in the penalty order has stated that the contention of the assessee that the revised return is not one filed under the amnesty scheme. It is on that basis, the Officer had entered a further finding that the assessee had concealed the particulars of its income and such concealment was detected by the Department during the course of search and seizure operations. The first appellate authority, it is seen, had obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Assessing Officer had only prima facie belief about the concealment. But that would not mean that the concealment had been detected. It is in the above circumstances, the Tribunal had entered a finding that the Department had not detected concealment prior to the filing of the revised return, and therefore, the assessee is entitled to the benefit of the amnesty scheme. As already noted, the contention of senior counsel appearing for the applicant is that the Tribunal had only noted the observation made in paragraph 1 of the penalty order, and had omitted to consider the categoric finding rendered in paragraph 7 of the penalty order which is to the effect that the concealment was detected by the Department in the course of the search, which is prior to the filing of the revised return. It is in those circumstances senior counsel submits that the matter has to go before the Tribunal for fresh consideration. We were also having an impression at the first blush that the matter required to be considered by the Tribunal afresh. However, after perusing the judgments of this court mentioned above, we feel that the conclusion reached by the Tribunal has to be sustained, though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctum of search ; but if the raiding party had detected some concealment, then the position would have been different. We are fortified this view by question No. 30 and answer thereto, which are reproduced below: 'Question No. 30. - Whether an assessee could make a declaration in respect of assets or income which is not the subject-matter of seizure? Answer.-Yes, if it has not been already found out in the course of the search.' It is patent from question No. 30 and the answer thereto that it is not the search alone which will exclude the assessee from the benefit of the amnesty scheme, but the actual detection of assets or income sought to be declared under the amnesty scheme, could deprive an assessee of the benefit of the scheme. The amnesty scheme has been introduced for the benefit of the taxpayers as well as for the benefit of the Revenue. The provisions of the scheme should be construed keeping in view its purpose and the context. Rigid and pedantic interpretation of the scheme has to be avoided. Keeping in view the interpretative principle and the answer to question No. 30 as contained in the scheme itself, we are of the considered view that the scheme cannot be constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 147 was issued on January 13, 1987, for these two years. We feel that the additional amounts offered under these two revised returns filed on September 30,1986, are entitled to immunity under the amnesty scheme under Circular No. 453, dated 4th April, 1986." It was further observed as follows: "But we make it clear that the income assessed over and above the income originally assessed and returned on September 30, 1986, is concealed income on which penalty is payable under section 271(1)(c) of the Income-tax Act. It is a fact that the assessee has not made true and full disclosure even for these two years also. However, we feel that at least to the extent of income voluntarily disclosed by the assessee, the assessee should get immunity from penalty. Therefore, penalty for 1981-82 and 1982-83 has to be recomputed after excluding from the concealed income originally fixed, the income additionally offered by the assessee vide its revised returns filed on September 30, 1986." From the aforesaid position, it is evident that this court has taken a view that if a revised return offering a higher amount is filed after the search and seizure, but prior to the issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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