9911796707
TMI Blog1996 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... of F.D.R./IVP and not shown as income in the books. Rs. 1,50,000 in the form of investment in jewellery account. Rs. 1,25,000 in the form of house investment account. I am surrendering this amount of Rs. 9,25,000 in the form of undisclosed and unaccounted income of investment and am willing to pay tax thereon voluntarily. I am making this surrender with the understanding that I would get absolved of the liability to pay interest, penalty and prosecution in respect of this income. 4. Reference may thereafter be made to the order rendered by the learned IAC (Assessment), Range-I, Kanpur, under sub-section (5) of section 132 of the Act, copy available at pages 4 to 14 of the paper-book which in its body at para 8 specifically accepts the good faith of the assessee in the following manner : " 8. At the time of search, the assessee has made a disclosure of his income, hitherto undisclosed, in good faith in order to get immunity from penalty. The statement of the assessee Shri Gyan Chand Bhatia recorded under section 132(4) on 11-8-1987, disclosed the following income : (i) In respect of F.D. Rs, Indira Vikas Patra Value which are not in the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. 7. However, penalty proceedings were initiated under clause (c) of sub-section (1) of section 271 of the Act, by the Assessing Officer who in his brief order levied penalty of Rs. 5,00,000 in the following manner :--- " Notice under section 271(1)(c) read with section 274 was issued on 18-3-1991 in response to this notice the assessee has replied that in light of disclosure under section 132(4) penalty should not be levied. The claim of assessee is acceptable only to the extent of assets described above which total up to Rs. 4,3 1,000. Regarding remaining amount of Rs. 4,94,000 there is no corresponding assets. Assessee has not paid taxes on the amount disclosed which is one of the condition before assessee is not treated to be assessee in default. Due to non-payment of taxes, the case of assessee goes beyond the purview of exemption as per Explanation 5 to section 271(1)(c). Accordingly, penalty under section 271(1)(c) is being levied as under : (a) Income deemed to be concealed Rs. 9,25,000 (b) Tax thereon Rs. (c) Minimum penalty leviable Rs. (d) Maximum penalty leviable Rs. Therefore, an amount of Rs. 5,00,000 is levied as penalty under section 271(1)(c). Iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosure. The sum of Rs. 9,25,000 was, therefore, concealed by the appellant. The conduct of not disclosing the sum of Rs. 9,25,000 in the return of income obliterates the disclosure made at the time of search. In effect the appellant by filing such return of income has retracted from the disclosure at the time of search. In such a situation it does not behave the appellant to make a plea that the surrender was made with the understanding that no penalty would be levied. In fact, the appellant based on the foregoing conduct, lost the benefit which might have been available in terms of section 271(1)(c). The assessment whereby a sum of Rs. 9,25,000 was added to the income of the appellant has not been contested in further appeal. This amount so added to the total income of the appellant is deemed to represent the income in respect of which particulars have been concealed in view of the fact that the explanation offered has not been substantiated. The explanation offered was in the letter of the appellant dated 14-3-1991. In that letter it had been stated that Rs. 9,25,000 covers the closing balances of loans and credits which he was not in a position to get verified. Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to say of a direct or indirect manner, not even remotely or distinctly on which the department eventually assessed him, the assessee could not be levied with the charge of non-disclosure or even half-hearted disclosure of tax relating to the concealed income of Rs. 9,25,000 much less held guilty of concealment itself. 13. Opposing the learned D.R. placing reliance on the view taken by the learned CIT (Appeals), contended that the penalty was imposable and prayed that the appeal be dismissed. 14. We have gone through the entire gamut of evidence and material to which our attention was invited and have taken into consideration the submissions made by either side. 15. Facts of the case as have emerged out perhaps do not admit of any quarrel or dispute. The assessee made surrender of Rs. 9,25,000 composed by various items as indicated in his statement recorded under sub-section (4) of section 132 of the Act and thereafter in various communications, three of which have been referred to above by us, namely, dated 12-2-1991, 14-3-1991 and 15-4-1991, copies available at pages 20-27 of the paper-book reiterated again and again the factum of disclosure of Rs. 9,25,000 by him on 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer in imposing a penalty. On the same subject, reliance was placed on a decision of High Court of Gauhati in the case of Padmaram Bharali v. CIT [1977] 110 ITR 54, wherein on the facts and in the circumstances of the case it was held that the penalty having been initiated by the Assessing Officer for concealment of particulars, the Appellate Tribunal could not uphold it on the ground that the assessee would be deemed to have concealed the particulars of income or to have furnished inaccurate particulars of such income. While we are, therefore, largely with the assessee that the basis of the imposition of penalty could not have been changed by the learned CIT (Appeals) in whose opinion, the Assessing Officer was not correct in saying that the assessee had not paid the taxes and who imposed the penalty on different count, namely, that the assessee had not disclosed the amount of Rs. 9,25,000 we would not hesitate in allowing this appeal even on the count on which the penalty was imposed by the learned CIT (Appeals). Our reasons, for saying so are these : 16. In the first instance, the assessee clearly stated in his statement under section 132(4) on the day of search its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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