TMI Blog2005 (8) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed the return in Form No. 2B on February 11, 2000, declaring undisclosed income at Rs. 14,00,000. Subsequently, the block assessment was completed at Rs. 23,93,610. This undisclosed income was arrived at after giving credit for the buffer declared by the assessee amounting to Rs. 1,55,257. Subsequently, penalty was imposed under section 158BFA(2). On appeal, the learned Commissioner of Income-tax (Appeals) cancelled the penalty by holding that mens rea was absent as far as the assessee is concerned. Now, the Revenue is in appeal before us. The learned Departmental Representative of the Revenue supported the penalty order, whereas, the learned Authorised Representative of the assessee supported the order of the learned Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer in para. No. 11 on pages Nos. 12 to 23 of the assessment order. Total of these three additions comes to Rs. 11,48,971 from which, the buffer of Rs. 1,55,257 is reduced and hence the net addition sustained is Rs. 9,93,614 on which, penalty is imposed by the Assessing Officer. It is also noted by the learned Commissioner of Income-tax (Appeals) on page No. 3 of his order that additions are of Rs. 6,14,302 on account of loans and interest thereon and Rs. 3,79,312 being income from other sources but in his findings in second sub-para. of para. 2.5 of his order, he has discussed about additions of loans only and there is no discussion about the second addition and it is concluded by him that the element of mens rea is not there o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the case of Deputy CIT v. V. Donyi Polo (supra) relied upon by the learned Authorised Representative of the assessee does not help the case of the assessee because the facts are different. In that case, additional income was offered by the assessee on its own volition on finding that income declared was less after the voluminous papers were examined. In the present case, additional income is not offered because of subsequent examination of voluminous papers. In fact, out of various loans, part was offered in the block return and balance was offered subsequently in two parts and hence, this judgment is not applicable in the present case. The Tribunal order in the case of Sri Chetan B. Kothari (supra) is also not applicable in the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reasons are found to be beyond the control of the assessee, then there may be a case for not levying the penalty in spite of assessed income being higher than the returned income. This will make the provision of section 158BFA(2) inoperative. In the present case, search has taken place on February 23, 1999, and the block return was filed on February 11, 2000, i.e., almost after one year of search. It is true that the affairs of an assessee are thrown out of gear due to search but the same is for a limited period and when the block return is filed after such a long gap, this theory has no relevance for failure of the assessee in making a full and true disclosure in the block return. We do not say that in all cases, where the assessed incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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