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TMI Blog1993 (9) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... e operation continued for three days up to January 25, 1985. A large number of books of account and documents were seized by the income-tax authorities. Section 271 of the Income-tax Act, 1961 (for short, "the Act"), provides for levy of penalty for concealment of income, etc. Sub-clause (c) of sub-section (1) of section 271 of the Act provides that, if the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner' (Appeals), in the course of any proceedings under this Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such Income, he may direct that such person shall pay by way of penalty in addition to any tax payable by him, a sum which shall not exceed two times the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income. In this section, instead of "Assessing Officer", the words "Income-tax Officer" and in place of the words "Deputy Commissioner (Appeals)", the words "Appellate Assistant Commissioner" were in existence at the time when the search and seizure operation took place in regard to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 139, voluntarily and in good faith made full and true disclosure of his income ; (b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; (c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed, and also has, in all the cases referred to in clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year. Explanation.-For the purposes of this sub-section, a person shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by the Commissioner except with the previous approval of the Board. (5) Every order made under this section shall be final and shall not be called into question by any court or any other authority." The abovesaid section provides that the Commissioner may, in his discretion, whether on his own motion or otherwise reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271 of the Act, if he is satisfied that such person has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income or of the inaccuracy of the particulars furnished in respect of such income, voluntarily and in good faith made full and true disclosure of such particulars. This would be clear on reading of section 273A(1)(i), (ii), (iii)(b) of the Act. Clause (b) of sub-section (2) of the above section provides that, if the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 13, 1987, declined to accord its approval. The approval was declined as the Board was of the view that the disclosure made by the assessee for the assessment years under consideration was neither true nor full and as such the assessee was not entitled to the benefit, of Explanation 2 to section 273A of the Act. The Board, in its letter dated November 13, 1987, specifically wrote that the income finally assessed in the relevant assessment years exceeds the income disclosed within 15 days of the search by a substantial margin and the assessed income also exceeds the income disclosed in the revised return filed more than one year after the search, and as such it was not a true and full disclosure of the assessee's income. After this order was passed by the Board, a review application was filed by the assessee which was also dismissed by the Board and the petitioner/respondent was communicated the said decision by letter of the Commissioner of Income-tax, Patiala, dated April 25/26, 1990, The petitioner challenged the orders dated November 13, 1987, annexure P-8, and dated April 25/26, 1990, annexure P-11, by means of the writ petition which had been allowed by the learned single j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual assessment made, then, a person could not be said to have made a true and full disclosure of his income. If the making of a full and true disclosure of the income depends upon the figures supplied by the assessee and the figure actually assessed by the Income-tax Department, in our opinion, the very purpose of Explanation 2 to section 273A of the Act would be defeated and there would be no case where an assessee could take the benefit of this Explanation, The words "voluntarily and in good faith" in this Explanation are also significant. If the entire benefit under the Explanation was to be dependent on the figures given by the assessee, the question of good faith would not have arisen. This has to be given some meaning. This is indicative of the fact that, even if the figures given by the assessee do not tally at the time of the final assessment, he cannot be denied the benefit of the Explanation. In our opinion, consequently, the full and true disclosure of the income in a case where the books of account and other documents have been seized by the income tax authorities under section 132 of the Act, would be available to a person who places all the books of account and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as the case may be, the same may kindly be given effect to in this application keeping in view the bona fides of the petitioner. In this case, it is significant to note that the Inspecting Assistant Commissioner, in his report to the Commissioner of Income-tax, K.Patiala, recommended the case for waiver of penalty and stated in paragraphs Nos. 6 and 7 of the report as follows : "6. From time to time, during the course of assessment proceedings, the Income-tax Officer made detailed investigations which involved enquiries from banks, various authorities like Steel Authority of India and Controller of Exports and Imports and the parties with whom the assessee had business transactions. The assessee extended full help in the matter of enquiries. His attitude was never negative. He did not try to fabricate evidence or to hamper the process of investigation. The intention of the assessee after the search was to make a complete disclosure of his income. As such, as and when the Income-tax Officer detected any discrepancy or inaccuracy, the assessee immediately agreed to surrender the same. The assessment proceedings require his personal presence daily for almost two months. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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