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TMI Blog2023 (12) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn and further, the second return filed by the appellant is not a voluntary one, as rightly held by the ITAT. Therefore, this court does not find any reason to interfere with the order passed by the ITAT. Accordingly, all these Tax Case Appeals are dismissed and the substantial questions of law are answered against the appellant and in favour of the revenue. - Hon'ble Mr. Justice R. Mahadevan And Hon'ble Mr. Justice Mohammed Shaffiq For the Appellant : Mr.S.Sridhar For the Respondent : Mr.T.Ravikumar Standing Counsel COMMON JUDGMENT R. MAHADEVAN, J. The appellant / assessee has come forward with these three Tax Case Appeals against the common order dated 18.03.2011 passed by the Income Tax Appellate Tribunal, Chennai, in ITA Nos.942-944/Chny/2010 relating to the Assessment Years 2003-04, 2004-05 and 2005-06 respectively. 2. According to the appellant, he is a Doctor / Urologist and is assessed to tax on the file of the respondent in PAN AACPD0956E in the status of individual. For the assessment year 2003-2004, the appellant filed his return of income on 27.11.2003 admitting a total income of Rs. 7,93,747/- and it was processed under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 139(5) of the Act and that, such returns were not voluntarily filed rather the same were filed only after detection of concealment of income during the course of the survey conducted in the hospital. 5. Aggrieved by the orders imposing penalty on him, the appellant filed appeals before the Commissioner of Income-tax (Appeals)-VI, Chennai. By orders dated 26.02.2010, the CIT(A) deleted the penalty levied under Section 271(1)(c) of the Act, relying on the decision of the Hon'ble Supreme Court in CIT v. Suresh Chandra Mittal [(2001) 251 ITR 9 (SC)], wherein it was held that regularisation of the invalid revised return on the issuance of notice under Section 148 of the Act should be taken into consideration in the context of levy of penalty under Section 271(1)(c) of the Act. 6. Challenging the orders passed by the CIT(A), the Revenue preferred appeals before the Income Tax Appellate Tribunal (in short, 'the ITAT'), which, after hearing both sides and on consideration of the case laws, restored the levy of penalty by the assessing officer under Section 271(1)(c) of the Act and accordingly, set aside the orders passed by the CIT(A), by the common order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals were admitted on the following substantial questions of law: '(i)Whether the Appellate Tribunal was right in law in taking contradicting views with respect to levy of penalty under section 271(1)(c) of the Act when the materials rellied on by the Revenue originates from the survey operations conducted in the hands of Apollo Hospitals Ltd some time during February, 2006 and in consequences to that the Appellant / Assessee has filed revised returns of income on 15.03.2006 even prior to the issuance of the summmons under section 131 of the Act to the assessee (7/7/2006) and much before the issue of notice under section 148 of the Act (19.03.2008) for reopening the assessment? (ii)Whether the Appellate Tribunal was right in law in sustaining the levy of penalty under section 271(1)(c) of the Act by ignoring the fact that the issuance of notice in terms of section 148 of the Act by the Department was intended only to regularise the voluntary revised returns filed though belatedly and thereby to assess the additional income offered by the Appellant / Assessee?' 12. It is the main contention of the learned counsel for the appellant that the appellant file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant cases that it is not a case of omission or wrong statement, but a case of concealment and false statement and in fact, no explanation has been made by the assessee on his failure to disclose his entire professional income in the first instance. 14. In this connection, it may be relevant to refer to the following decisions of the various High Courts, in which, it was categorically held that the revised return filed, after search operation is an after-thought and the same cannot be treated as omission or wrong statement. (i) CIT v. Dr.A.Mohd.Abdul Khadir [260 ITR 650 Mds] 7. There can be no doubt whatsoever on the facts admitted by the assessee himself that the assessee had concealed his income for these assessment years. It was his own case before the CIT that the assessee had put up a valuable construction out of his own monies and that he had failed to report his true income for those years. He had himself estimated the amount of the income, which he had concealed, and had offered the amount so concealed for taxation. It was his hope that by that act of his, the CIT would be persuaded to exonerate him from the levy of penalty. The admission so made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nders the assessee's argument insubstantial in the totality of circumstances. (iii) Khandelwal steel Tube Traders v. ITO [304 CTR 500 Mds] 24. It was argued that merely by filing a revised return and offering additional income will not by itself be a ground to levy penalty. This is a broad legal principle, but has to be applied by taking note of the facts of each case. The assessee has to satisfy the test that he has a satisfactory explanation regarding such income offered in the revised return. The explanation as to why there was an omission or wrong statement in the original return must be due to bona fide inadvertence or bona fide mistake on the part of the assessee. Even if the assessee agreed to the addition with a condition that penalty could not be imposed, the Department is not precluded from initiating penalty proceedings. In the instant case on facts, it was found that there was no such assurance. 25. Reading of the order passed by the CIT (A) as confirmed by the Tribunal would dearly show that the materials, which were recovered during the search proceedings reveal concealment of income and the assessee agreed for the additions and it would be too la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion constituted the income and not otherwise. 8. Assessee has only stated that he had surrendered the additional sum of Rs. 40,74,000/- with a view to avoid7litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the explanation 1 to Section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the Appellant-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 had to be absolved from penalty. (vi) Harvey Heart Hospitals Ltd v. ACIT [226 DTR 418(Mad)] 10.1. The 1st submission of the appellant that mere rejection of claim of deduction towards expenditure would not warrant penalty, fails to see that the assessing officer as well as the Tribunal found as a matter of fact that no business activity was carried on by the appellant during the relevant assessment years and fixed assets were sold. Thus the claim of research and development during the relevant assessment year was itself found to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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