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TMI Blog1996 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... e of those books marked as "14(b)", contained entries showing receipts of various amounts by the assessee from persons who were allowed to park their tourist buses within the compound of the assessee's lodge during the relevant previous year, the total aggregating to Rs. 36,015. Another book marked as "No. 7" contained entries said to be relating to the expenditure incurred by the assessee. A statement was recorded by the Assistant Director of Inspection from the assessee on the same day. It was stated by the assessee then that certain bus owners, viz., Selvi Sri Ram and N. P., used to park their buses in the compound of his lodge, that he had collected rent from them for so parking their buses, that he used to get Rs. 600 per month gross and that he had recorded such receipts in the account books marked as "14(b)". He further stated that he had not disclosed such income in the income-tax returns filed by him earlier. For the assessment year 1972-73, a notice was issued to the assessee by the Income-tax Officer under section 139(2) on February 21, 1973, requiring him to file his return of income. The assessee filed the return on February 28, 1973, disclosing income of Rs. 27,000 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income as Rs. 1,05,003. The Income-tax Officer recomputed the total receipts from the lodge as Rs. 78,867. He disallowed Rs. 8,400 out of Rs. 11,667 claimed by the assessee as salary paid for the staff. He also disallowed Rs. 6,000 out of Rs. 7,000 claimed as salary paid to the manager. The Income-tax Officer also included Rs. 36,015 as income received by the assessee by way of parking charges. The Income-tax Officer also initiated action for levy of penalty for alleged concealment of income under section 271(1)(c) of the Income-tax Act, 1961. On appeal, the Appellate Assistant Commissioner held that deduction of ten per cent. of the gross receipt could be allowed for expenditure and determined the same as Rs. 32,414. Thereupon, the assessee preferred an appeal contending that the inclusion of Rs. 32,414 as bus parking charges under the head "Other sources" was not correct. The Tribunal, by its order dated November 26, 1977, held that the assessee had received charges for parking buses in his compound. The Tribunal further held that the assessee would have incurred an expenditure of about Rs. 8,000 to Rs. 9,000 by way of payment of brokerage for earning that income. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the return filed on February 13, 1975, and that the assessee had filed the return on March 6, 1975, only because the Income-tax Officer asked for details regarding the rent from the properties. While so, the Tribunal pointed out that the assessee had not voluntarily disclosed the above income even before any enquiry was made by the Income-tax Officer. The Tribunal, therefore, found that the assessee had omitted to disclose the same amounting to Rs. 18,375 by way of amenities charges. In the matter of parking charges, the Tribunal noticed that such receipts had been noted in the book marked as "14(b)" and the assessee had admitted having received such charges when examined on August 22, 1972, and yet had not disclosed the same in the return filed by him. The Tribunal pointed out that the omission to show the income by way of car parking charges in the first return could be explained by the fact that the books were not made available to the assessee and the omission in the second return may have been due to some inadvertence, for the details of the source of income was already in the knowledge of the Department and such receipt of income had also been admitted by the assessee muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three items. On the other hand, learned standing counsel for the Department, while supporting the order passed by the Tribunal submitted that for the purpose of levying penalty under section 271(1)(c) of the Act, the officer concerned should find out the concealment of income with reference to the original return by taking into consideration the statement or return filed by the assessee. Concealment could be established with the original return on the basis of the particulars furnished in the revised return. The Tribunal gave a categorical finding that the assessee concealed its income with regard to the three sources. According to learned standing counsel for the Department, the decision in CIT v. S. S. K. G. Arthanariswamy Chettiar [1982] 136 ITR 145 (Mad), is an authority for the proposition that the concealment with reference to which the penalty could be imposed was the concealment of the income in the return originally filed by the assessee which was prior to April 1, 1968. The law that was applicable prior to April 1, 1968, alone can be applied. It was, therefore, submitted that the order passed by the Tribunal in confirming the penalties under section 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. However, the assessee claimed Rs. 6,000 as salary paid to the manager. In this view of the matter, the Tribunal held that the assessee had concealed income of Rs. 4,800. Another item of concealment according to the Inspecting Assistant Commissioner is Rs. 18,925 being the rental omission. This relates to amenities charges. The assessee had admitted Rs. 16,164 as income from property in the return filed by him on February 13, 1975. Admittedly, he has not included therein the amount received by him as charge for amenities. In the return filed by him on March 6, 1975, he had disclosed Rs. 21,062 under the head "Property" income. In doing so, he had included Rs. 21,660 being the amenities charges. The Income-tax Officer did not accept this computation. He worked out the property income as Rs. 16,045 and Rs. 21,660 was brought to tax under the head "Other sources". On appeal, the Appellate Assistant Commissioner reduced Rs. 21,660 to Rs. 19,494. Hence, the aggregate of the income from the property comes to Rs. 35,529. The Tribunal pointed out that the Inspecting Assistant Commissioner by mistake took it as Rs. 35,089. Since the assessee had disclosed income of Rs. 16,164, he arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Rs. 600 gross per month. The Tribunal pointed out that stating as gross would be attributed to be a slip instead of stating that he was making Rs. 600 per month net. This sum of Rs. 7,200 is shown in the third return also. According to the Tribunal, the assessee having stated that he was getting income from the parking of buses and the books of total receipts having been in the hands of the Income-tax Officer, it would not have been possible for the assessee to suppress such income. Further, according to the Tribunal, the omission to show income from this source in the first return could be explained by the fact that the books were not made available to the assessee and the omission in the second return may have been due to some inadvertence for details of the source of income were already in the knowledge of the Department and have been admitted by the assessee much before the first return was filed. According to the assessee, 80 per cent. of the receipt of Rs. 36,016 was paid as brokerage. This was not substantiated by evidence, either before the Income-tax Officer or before the Appellate Assistant Commissioner or even before the Tribunal. The Tribunal, in its order dated Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original return for wealth-tax (?) was filed. For a particular year, an assessee can commit the offence only once when he furnishes incorrect particulars of his income, and that he does, by filing the original return. Even if he is asked to file a number of returns for that very year and he sticks to his original position, he will not be committing the offence again and again. The offence being concealment of income, persistence in such concealment cannot be taken as a fresh offence committed every time a return is filed that does not disclose the real income. Neither the provisions of the Act nor the decided cases authorise the imposition of penalties with reference to each of the returns for the same assessment year, or more than once for the same offence. But it is possible to recall an earlier order of penalty and pass another order imposing higher penalty, if on the later occasion the true facts ascertained show a higher amount of concealment. This position is clear by the decision reported in CIT v. S. S. K. G. Arthanariswamy Chettiar [1982] 136 ITR 145 (Mad) which was rendered on the basis of the following earlier decisions : 1. Mohammad Ibrahim Maracair (K. E. M.) v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed because of inadvertence. Therefore, when there is no concealment in the original return, penalty cannot be levied under section 271(1)(c) of the Act as per the legal pronouncement cited supra. In the present case, admittedly, in so far as the third item of the concealed income is concerned, it was based upon the third return filed by the assessee. Hence, the penalty of Rs. 20,214 is not exigible under section 271(1)(c) of the Act. In view of the abovesaid findings, since the questions framed and suggested by the Tribunal do not reflect the correct issue involved in this case, we would reframe the questions as under : " 1. Whether, on the facts and in the circumstances of the case, the levy of penalty for concealment of income under section 271(1)(c) of the Income-tax Act, 1961, is justifiable in so far as Rs. 4,800, Rs. 18,375 and Rs. 20,214 are concerned ? " The abovesaid question would be comprehensive enough to cover the subject-matters raised in both the questions referred to us by the Tribunal. In view of the abovesaid findings, we hold that the Tribunal was correct in coming to the conclusion that the penalties of Rs. 4,800 and Rs. 18,375 are leviable under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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