TMI Blog1992 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... gregating to Rs. 3,02,727. The assessee challenged the additions before the C.I.T. (Appeals) and the C.I.T. (Appeals) allowed the assessee relief of Rs. 43,924 on the trading addition only. The assessee challenged the order of the C.I.T. (Appeals) both on account of trading addition partly sustained as well as the addition on account of unexplained cash credit, before the Income-tax Appellate Tribunal. During the pendency of the appeal with the Tribunal the Government had announced the Amnesty Scheme. The assessee has in the statement of facts as filed before the C.I.T. (Appeals) had stated that the partners had decided to take shelter of the Amnesty Scheme. The authorised representative of the assessee met the I.T.O., B-Ward,Faridabadand also approached the C.I.T., Rohtak discussed the matter with them on26-3-1987. Pursuant to the discussion they had with these two officers the assessee-firm deposited on28-3-1987the entire tax payable by the firm as also its partners aggregating to Rs. 1,80,880. This tax so paid by it was based on the re-assessment figure concluded by the Assessing Officer, not considering the relief already allowed by the C.I.T. (Appeals). Based on this the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above rejected the contention of the assessee that the revised return was filed under the Amnesty Scheme on the understanding that no penalty proceedings would be initiated. The Assessing Officer then considered the two additions. On the addition of profit on suppressed sales of Rs. 78,924 he observed that though the CIT (Appeals) had allowed the relief, the assessee having chosen to file higher Income disregarding the relief so provided by the CIT (Appeals), that too in the return filed under the Amnesty Scheme, clearly showed that the assessee had concealed the particulars of income. On the addition of unexplained cash credit it contained the amounts standing to the credit of the following 6 persons and the amounts mentioned against them : Credit balance Credit balances "Name as per cash books as per books of seized by the sales a/c seized by tax authorities the IT Deptt. Rs. Rs. --------------------------------------------------------------------------------------------------------------------------------------------------- 1. Sh. Naresh Kumar 1,03,000 6,000 2. Sh. Suresh Kumar 1,33,560/92 3,600 3. Sh. Kishan Chand 31,720 Nil 4. Sh. Jag Raj 21,000 18,545-53 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraphs (ix) and (x) as under : " (ix) The very fact that the assessee filed a revised return declaring the income already assessed at Rs. 4,09,370 in itself shows that the assessee was within itself aware of the fact that the income suppressed belong to it and he has no explanation for having suppressed the said income. Although the assessee has contended that the books on the basis of which the additions have been made to its income in the reassessment proceedings did not belong to it but this does not seem to be true because it is highly improbable that 6 persons who had credit balances in the books of the assessee also had credit balances in the books seized by the Sales Tax Authorities and contended by the assessee as not belonging to it. For instance, Shri Naresh Kumar had credit balance of Rs. 8,745 in the books seized by the Sales Tax Department and had a debit balance of Rs. 8,745 in the books of the assessee. (x) I have deliberated on the case laws relied upon by the assessee. None of the case would apply in the case of the assessee as the facts are not similar and identical. As already stated, the revised return filed by the assessee cannot be regarded as a voluntar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer had prima facie belief, it would mean that there had been no concealment detected. He submitted that question No. 28 was with reference to an addition which was decided in appeal and whether the assessee could make a declaration and agree to pay tax thereon. The answer was that the assessee could do so but it must withdraw the appeal and make the declaration before the Administrative Commissioner. In such a case lenient view was taken though such a declaration cannot be taken as entirely voluntary. He submitted that the search was made by the sales-tax department based on which the re-assessment was initiated by the Revenue. He submitted that no doubt he had made additions on account of unexplained cash credit but the assessee had filed sufficient evidence from all those cash creditors who were 8 in number, each holding 15 to 20 acres of agricultural land and they had provided the necessary confirmations/affidavits in this regard. He submitted that the assessee had not moved any petition under section 273A. At this point he made reference to the order of the Chief Judicial Magistrate. He submitted that the Chief Judicial Magistrate had held that the prosecution is unfounded and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion was that the same cannot be assessed as income from undisclosed sources of the individual member. Shri Agarwal, the Counsel for the assessee, pointed out that the judgment of the Punjab and Haryana High Court has been cited by him with reference to the fact that the addition on account of unexplained cash credit was made not based on the fact that there were appearing as credits in the books of account. The real fact is that no such credit was found in the books of account and, therefore, section 68 could not have been invoked at all. Shri Agarwal submitted that Shri Ganshyam Dass had very categorically stated that the transactions which were found in the documents seized by the Sales Tax authorities were belonging to him and not to the firm, which was rejected by the department and addition made in the hands of the assessee. He also placed reliance on the decision of the Allahabad High Court in Ashok Kumar Rustogi v. CIT [1991] 100 CTR (All.) 204. Shri Agarwal submitted that the Revenue had presumed that merely because the assessee had been classified to have business outside its books, it must be that the assessee must have made investment outside the books also. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. The assessee on its part had requested for cancellation of the penalty basing on the Board's Circular No. 451 issued on17-2-1986. The Board's Circular No. 451 by which the Amnesty Scheme was extended under the Income-tax Act was also effective till31-3-1987. Since the Amnesty Scheme was floated by the department of revenue with a view to collect more revenue, it issued various Circulars from time to time, from the inception of the issuance of the Amnesty Scheme. In Circular No. 441 one question that was raised was whether an old assessee who has been regularly filing returns, whether would be eligible for the benefit of the Circulars if he chose to file a return of income which has escaped assessment for an earlier assessment year, whether the assessment is completed or pending. The answer was that the Circulars apply to old assessee as well. Question No. 4 was that the Income-tax Circulars are not very clear whether the immunity from penalty and prosecution is guaranteed to the assessee unlike the Circular in respect of Wealth-tax which appears to be clear on this point. The answer to this question was that the immunity from penalty and prosecution applies in all cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of their address as well as their credibility to have advanced moneys by establishing that they own agricultural land which is sufficiently large enough for providing money between Rs. 13,500 and Rs. 40,000. It has not been established that these creditors do not exist and that all the confirmations as well affidavits provided by the assessee are false. In other words, it has not been established that these are, in fact, concealed income of the assessee. Therefore, even on merits penalty could not have been levied at all. The question that came up for consideration was whether the assessee could still file a revised return while it was in appeal. This was clarified in the Circular that it could do so provided it withdraws the appeal. Therefore, there being no bar for the assessee to resort to the Amnesty Scheme, the assessee could still file the revised return. The clarification issued also provides that the assessee could still file a return in respect of an assessment which had already been completed and which is not pending. We may observe here that merely because the assessee has chosen to file a revised return under the Amnesty Scheme it does not automatically go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the trading account was partially deleted by the CIT (Appeals). Cash creditors were confirmed, which the assessee had appealed to the Tribunal. These were proceedings in the quantum. In the penalty proceedings, was any effort made to establish concealment ? The answer to this question is clearly 'no'. There are several judicial pronouncements which have clearly held that the materials that have been collected during the course of assessment and the assessment order itself could no doubt be prima facie evidence but would not be sufficient to establish that there was concealment. It is in this connection that we have referred to the observations made by the Assessing Officer of the revised return filed under the Amnesty Scheme. The Amnesty Scheme return no doubt was filed after having discussion with the concerned authorities. The return under the Amnesty Scheme also contained an income which was partly deleted by the CIT (Appeals), in other words, the income that was returned under the Amnesty Scheme was larger than the income that remained after the order of the CIT (Appeals). The assessee had made reference to the decision of the Supreme Court in Sir Shadi Lal Sugar Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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