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TMI Blog2006 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... ke compliance by March 5, 1986. The said show cause notice has been reproduced in verbatim in the assessment order dated March 31, 1986, the show-cause notice was also relating to the squared up cash credits, which were listed in tabular form in the said assessment order. Such squared up cash credits were detailed in the show cause notice. After the service of the notice to show cause, the assessee filed a revised return on March 7, 1986, declaring the total income to the tune of Rs. 2,27,824, which included a sum of Rs. 1 lakh in addition to the earlier income. Before the Assessing Officer, the benefit of amnesty scheme was also claimed to avoid the liability of penalty proceedings under section 271(1)(c) of the Income-tax Act ("the Act" for short). The Assessing Officer accepted the revised return and assessed the present assessee for the sum of Rs. 2,27,824/-, but, opened penalty proceedings under section 271(1)(c) of the Act. The assessee, vide its reply dated November 4, 1986, stated that the firm had filed the return for the accounting years 1983-84 to 1985-86 in terms of the circulars of the Central Board of Direct Taxes ("the CBDT") and, therefore, he was entitled to immun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry clear as to whether the immunity from penalty and prosecution is guaranteed to the assessee unlike the circular in respect of wealth-tax which appears to be clear on this point? Answer.- The immunity from penalty and prosecution applies in all cases whether of income-tax or of wealth-tax where the assessee admits the truth and pays taxes properly. Question No. 19.-Kindly clarify the expression 'before detection by the Department'? Answer.-If the Income-tax Officer has already found material to show that there has been concealment, that would mean the Department has detected the concealment. If the Income-tax Officer only had prima facie belief, that would not mean concealment has been detected. 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." Reply to question No. 4 simply said that the immunity from penalty and prosecution applies in all cases whether of income-tax or of wealth-tax where the assessee admits the truth and pays the taxes properly. Question No. 19 and its answer by the Central Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86, was served upon the assessee, he came out of his slumber, started acting honest and submitted the revised return. It is not the case of the assessee either before the Assessing Officer or before the Tribunal that much before service of the show-cause notice, honesty prevailed upon him and to the call of good conscience, he filed the revised return. The revised return, in fact, was a reaction to the notice issued by the Assessing Officer on February 24, 1986. 8. At this stage, we will be failing in our duty if we do not refer to yet another argument of Mr. Divetia. He submits that the notice to show cause was in relation to the sum of Rs. 1,64,500/-, but, without any further explanation from the assessee, the Assessing Officer relied upon the revised return and added the sum of Rs. 1 lakh only. He submits that if that be so, it must be held that nothing was detected before the final order was made. 9. The submission of learned counsel for the assessee runs contrary to the answer to question No. 19, the argument virtually violates the true spirit of the said circular. The circular said that "before detection by the Department", which would simply mean that if the Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r' or 'to discover or determine the existence, presence or fact'. In the instant case, certain documents and papers were seized. They might or might not reveal concealment. Even the seizure could not lead to a prima facie belief as to concealment as the contents, purport and the implications of the documents were yet to be gone into. Therefore, at the point of time the return under the amnesty scheme was filed, the Assessing Officer admittedly had no idea as to whether the seized papers would reveal any concealment. The mere fact that the petitioner appellant's case was awaiting a probe with reference to his past records as well as extrinsic sources could not lead to his ouster from the scope of the scheme." The Learned counsel for the assessee vehemently argued that nothing was detected in the present matter, therefore, and as the revised return was relied upon by the Assessing Officer, no penalty proceedings could be initiated. 12. The facts of the said case were totally different. The law laid down by the judgment is in reference to the facts. Stray sentences cannot be read out of context. In the said matter, before any action could be taken by the Department on the material o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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