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TMI Blog2018 (5) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... was levied at the minimum 100% of the tax sought to be evaded. There is nothing on record to suggest that the assessee agreed to the addition of such income to cutshort the litigation in view of the fact that in any case, even after making the additions, there would be no tax liability in the hands of the assessee. Even if we were to accept the assessee's contention that such surrender was to avoid protraction of the litigation and which is often times referred to as “to buy peace” as held by the Supreme Court in case of Mak Data P. Ltd (2013 (11) TMI 14 - SUPREME COURT), this would not necessarily avoid initiation of penalty proceedings. - Decided against assessee. - R/Tax Appeal NO. 298 of 2018 - - - Dated:- 3-4-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : Mr Chintan Dave For Hlp Associates LLP(9263) For The Respondent : Mr Manish Bhatt Senior Counsel With Mrs Mauna M Bhatt(174) ORAL UDGMENT ( PER : HONOURABLE MR. USTICE AKIL KURESHI) 1. The assessee is in appeal against the udgment of the Income Tax Appellate Tribunal raising the following questions for our consideration : ( A) Whether in the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed tax liability came to be nil as per the order of assessment dated 5.12.2011. Nevertheless, since the assessee had concealed the income and the particulars thereof, the Assessing Officer ordered initiation of penalty proceedings. Apparently because the order of assessment did not give rise to any fresh tax demand from the assessee, he did not carry this order in appeal. He however, opposed the penalty proceedings contending that against the surrendered income of 19,55,500/, the assessee had established derivative loss of ₹ 23.13 lacs which eventually resulted into nil tax liability. Merely because the assessee agreed to surrender the additions, penalty could not be levied. The Assessing Officer however re ected all the contentions of the assessee. He observed that if the return of the assessee was not taken in scrutiny, cash deposits of the assessee would not have been brought on record. He did not accept the assessee's contention that he had voluntarily surrendered the peak credit of 19,55,500/. Had the cash deposits not been detected, the assessee in any case would not have agreed to surrender such income. He therefore, passed an order dated 29.6.2012 levying minim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee carried the matter in further appeal before the Tribunal. The Tribunal by the impugned udgment dismissed the appeal, upon which, the present appeal has been filed. 6. Learned counsel for the appellant mainly contended that : i) The assessee had surrendered the income voluntarily. That itself would not give rise to the penalty proceedings. ii) Even after making addition of the undisclosed income, there was no fresh tax liability as compared to the returned income. In such a case penalty in any case, would not be levied. Reference in this regard was made on the udgment of Supreme Court in case of oint Commissioner of Incometax v. Classic Industries Ltd. reported in (2017) 393 ITR 20(SC). 7. On other other hand, learned Counsel Shri Manish Bhatt for the department opposed the appeal contending that it is incorrect to state that the assessee had surrendered the income. Only when the return was taken in scrutiny and it was found that the assessee had undisclosed bank accounts in which cash deposits were made, that the assessee came out with the peak credit theory. The assessee has not offered any explanation or disclosed the source of such cash deposits either i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s referred to as to buy peace as held by the Supreme Court in case of Mak Data P. Ltd (supra), this would not necessarily avoid initiation of penalty proceedings. In the said case, it was held and observed that voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he has to be absolved from penalty. The assessee cannot explain away his conduct by suggesting voluntary disclosure , to buy peace , to avoid litigation or for amicable settlement . 10. The assessee's other contention that in any case since the order of assessment did not give rise to tax demand, penalty cannot be imposed is against the udgment of Supreme Court in case of Gold Coin Health Food P. Ltd. (supra). The said udgment was rendered by three udge Bench of the Supreme Court on a reference made to it doubting the correctness of the udgment in case of Virtual Soft Systems Ltd. v. Commissioner of Incometax reported in (2007) 289 ITR 83(SC), in which it was held that penalty under section 271(1)(c) of the Act cannot be levied, if returned income is loss. In focus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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