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TMI Blog2012 (1) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... iled an appeal before the Appellate Commissioner on 25-03- 2002. The Appellate Commissioner by an order dated 12-02-2004 dismissed the appeal filed by the partnership firm on the ground that the admitted tax was not paid as required u/s 249(4) of the Income-tax Act. The assessee firm has not filed any further appeal before this Tribunal. Therefore, the appellate order passed by the Appellate Commissioner becomes final. Thereafter, one of the partners of the firm filed an appeal before the Appellate Commissioner. According to the ld.DR, once the assessee firm filed the appeal before the Appellate Commissioner and the Appellate Commissioner dismissed the appeal there cannot be any further appeal by the partners independently. Therefore, accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the firm is not maintainable. 6. Coming to the merit of the appeal, the ld.counsel for the assessee submitted that once the advance-tax was paid before the date of search as required under the Incometax Act, the income relatable to that advance-tax, amounts to disclosure, therefore, to that extent there cannot be any undisclosed income. Eventhough the assessing officer computed the undisclosed income at ₹ 34,26,260 the Commissioner of Income-tax(A) directed the assessing officer to take the undisclosed income at ₹ 13,78,490. Referring to the order of the Commissioner of Income-tax(A), the ld.counsel for the assessee submitted that the Commissioner of Income-tax(A) found that the assessee has paid advance-tax before the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Commissioner became final as no further appellate proceedings was taken by the firm. After that, one of the partners, Shri P Sreenivasan has filed another appeal before the Appellate Commissioner on 01-06-2005 after the dismissal of the appeal filed by the firm. During the pendency of that appeal, it appears, that the property of the partner was attached by the revenue for recovery of the tax due. The partner, Shri P Sreenivasan filed a writ petition challenging the recovery proceedings before the High Court. The High Court by an order dated 23-08-2005 in W.P(C) No.13544 of 2005 directed the Appellate Commissioner to dispose of the appeal within six weeks from the date of production of the copy of the judgment. The sale of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Commissioner after the disposal of the appeal of the partnership firm and the Writ Petition was also filed before the High Court after disposal of the appeal of the firm by the Appellate Commissioner. In spite of that the High Court directed the appellate Commissioner to dispose of the appeal within six weeks after hearing both the parties. Therefore, it is too late for the department now to contend before this Tribunal that the appeal filed by the independent partner is not maintainable. This Tribunal is of the opinion that the direction of the High Court is binding not only on the department but also on the Appellate Commissioner. Therefore, we do not find any merit in the contention of the ld.DR that the appeal filed by the indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the department before the date of search by filing regular return of income cannot be treated as undisclosed income. Therefore, we do not find any infirmity in the order of the Commissioner of Incometax( A). Accordingly the same is confirmed. 11. Now coming to the penalty appeal, Ms. Vijayaprabha, the ld.DR submitted that though the Commissioner of Income-tax(A) deleted the addition to the extent of ₹ 17,69,930 on the ground that the assessee had paid advance-tax and filed return of income before the search, the balance amount of ₹ 13,78,490 was confirmed by the Commissioner of Income-tax(A) as undisclosed income. So to that extent, according to the ld.DR, the penalty is attracted. According to the ld.DR mens rea is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner (Appeals) in the course of any proceedings under this Chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC: Provided that no order imposing penalty shall be made in respect of a person if (i) Such person has furnished a return under clause (a) of section 158BC; (ii) The tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable. (iii) Evidence of tax paid is fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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