9911796707
TMI Blog1984 (2) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... on 25-10-1978. Among the papers seized during the search was a diary in which were noted sales to various parties to the extent of Rs. 1,52,027.82. The assessment was completed on a total income of Rs. 2,59,315. As a result of the appeal filed before the learned AAC, the determined income came down to Rs. 2,19,350 which was also confirmed by the Tribunal in appeal. Penalty proceedings were initiated by the ITO under section 271(1)(c) and a penalty of Rs. 1,04,000 was levied after considering the reply of the assessee to the show-cause notice. The ITO took the view that the assessee had offered no explanation about the concealment made in the original return. He also held that it could not be said that the return was revised on account of any bona fide inadvertence or omission in the original return. According to the ITO, it was only when the search and seizure operation was conducted and the ITO found that the assessee had done considerable business outside the books and had called upon the assessee by order sheet entry dated 7-8-1979 to explain the nature of the entries in certain seized papers that the assessee was forced to file a revised return. He held that the assessee had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax authorities. Referring to the order sheet entries and the letters dated 28-9-1979 and 31-10-1979 of the assessee, he submitted that there could not be a stronger case for the department for imposing the penalty under section 271(1)(c). According to him, no explanation was submitted by the assessee and, therefore, concealment of income was duly established in terms of Explanation 1(A) to section 271(1)(c). Alternatively, he submitted that even if it were to be taken that the assessee had offered an explanation, it was not bona fide but false and, therefore, the assessee was not entitled to claim the benefit of the proviso to the said Explanation 1 to section 271(1)(c) as applicable for the assessment years in question. Reliance was also placed by him on the following decisions--Amjad Ali Nazir Ali v. CIT [1977] 110 ITR 419 (All.), Addl. CIT v. Radhey Shyam [1980] 123 ITR 125 (All.), Vishwakarma Industries v. CIT [1982] 135 ITR 652 (Punj. Har.) (FB) and Addl. CIT v. Lakshmi Industries Cold. Storage Co. [1983] 32 CTR 195 (All.). 6. We have considered the rival submissions as also the decisions referred to above. It is clear from a reading of the aforesaid decisions that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the litigation as it is not possible for the assessee to furnish documentary evidence enabling the assessee to work out the correct profit of the said sales or the nature and source or the quantum of the said investment therein. As discussed verbally the surrender has been made only for the reason of this inability of the assessee to produce documentary evidence in support of his contentions in regard to the said sales of Rs. 1,52,027.82 paise but without admitting that the said sales of Rs. 1,52,027.82 paise is or could be the assessable income of the assessee for the relevant previous year or that the assessee has concealed the particulars of his income to the extent of said amount of Rs. 1,52,027.82 paise so surrendered by filing the revised return of income, as discussed. b. That without prejudice to the above, it is further submitted that all explanations to this regard as explained verbally or as may be further given by the assessee will be in this background. In view of the abovesaid facts it is very humbly submitted that this assessment may very kindly be completed as per the said revised return in this background. Thanking you, Yours faithfully, for M/s Biland Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased should have been disclosed by the assessee. It is in these circumstances, since the entire circumstances of the investment, purchase and sales outside the accounts were kept undisclosed by the assessee, that the entire amount of Rs. 1,52,027.82 was assessed. In our view, the facts establish that the details and facts were kept back by the assessee deliberately. 7. In terms of Explanation 1 to section 271(1)(c), as applicable for the assessment year 1978-79 in question, the assessee had given an explanation to which reference has been made by us above and the assessee had also filed its reply dated 12-2-1982 to the show-cause notice and, therefore, it is not possible to take the view that the assessee had failed to offer an explanation. Therefore, in terms of the proviso to Explanation 1(B) to section 271(1)(c), the only question which remains to be considered is whether with reference to the rejection of the assessee's explanation it could be said that it was bona fide and that all the facts relating to the same and material to the computation of its total income had been disclosed by it. As already seen above, it is not possible to take the view that the assessee's exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was served on the assessee on 17-5-1977 demanding Rs. 5,373 as advance tax. On the basis of the assessment completed by the ITO, the advance tax payable by the assessee worked out to Rs. 55,472. Since the advance tax payable by the assessee exceeded the amount of advance tax demanded under section 210 by more than 33 1/3 per cent of the latter amount. The assessee was liable to furnish the estimate of current income and to pay the advance tax under section 212(3A) of the Act. In view of the assessee's failure, penalty proceedings were initiated against the assessee under section 273(c) In reply to the show-cause notice, the assessee stated that the demand of Rs. 5,373 had been paid in three quarterly instalments of Rs. 1,791. It was claimed that the advance tax demanded was in conformity with the assessee's past records and that since it could not foresee the abnormal increase in its income, no revised estimate was filed nor advance tax was paid. However, the ITO did not accept the assessee's explanation. He observed that the search and seizure operation had resulted in the discovery and seizure of a number of documents on the basis of which the revised return was filed. He wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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