TMI Blog2003 (7) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... osed as income in the original ret urn. 3. The assessee filed a revised return on 22-4-1996 alongwith a note reading as under: "The original return of income was filed on 31-10-1995--R.No. 3781, declaring total income of Rs. 48,250. During the Financial year, I have received Rs. 1,00,000 by DD dated 29-7-1994 from Prakash B. Shah of Pune. The said DD was received through a financial broker. It was conveyed that the confirmation and supporting evidence will be supplied in due course but till date I have not received any such supporting evidence for the amount so accepted. In absence of the above. I am unable to substantiate the genuineness of the transaction and identity of the persons, i.e. payer. Under the circumstances, in order to buy peace of mind and to avoid protracted litigation the same is offered as income, hence this revised return of income is filed. The same is filed in anticipation that penalty proceedings under section 271(1)(c) will not be initiated nor any harsh or coercive action will be taken against me. I have paid the taxes in full together with interest chargeable thereon." 4. The Assessing Officer after providing adequate and reasonable opportunity to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also stated that the said demand draft was received through a Financial Broker and it was conveyed by the above person that the confirmation and supporting evidences will be supplied in due course. 5. From the above, it is clear that the assessee has given false particulars regarding the receipt of such demand draft by her and is not in a position to show the exact source of receipt of the above amount of so called gift. It is also clear that the assessee had filed the revised return of income for this year showing additional income of Rs. 1,00,000 only after detection of income by the Department and not suo mota filed such return of income declaring unaccounted income. The assessee has not shown this unaccounted income regarding the demand draft credited in her bank account No. 184 with the Mehsana Urban Co-op. Bank Ltd. in the original return of income, and only now it is shown due to compulsion to declare the same. So it can be said that the assessee had furnished inaccurate particulars of her income with deliberate intention to conceal the income at initial stage and thereafter she had revised her return of income only after detection of above concealed income by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se even as per the decision in the case of Hindustan Steel Limited v. State of Orissa. Similarly, the ratio of Hon'ble Supreme Court in the case of Sir Shadilal Sugar General Mills Ltd. v. CIT [1987] 64 ITR 705 is also not applicable to the facts of the case of the appellant as there is admission of unaccounted income. The mens rea is proved by the conduct of the assessee by way of obtaining bogus foreign gift and by not showing the correct income in the original return filed. I therefore hold that the assessee did not file revised return by showing additional income of Rs. 1,00,000 suo moto and to purchase peace of mind and to avoid protracted long drawn process with the department, but for the reasons that the concealment was already detected by the department and the assessee had no other way, but to pay the tax on the concealed income. The assessee furnished inaccurate particulars of her income with deliberate intention to conceal the income at initial stage and therefore, the return was revised only after detection of the above concealed income. I, therefore, hold that the Assessing Officer was justified in levying penalty in the case under section 271(1)(c) of the Act." 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the revised return has also accepted the fact that she is unable to substantiate the genuineness of the transaction and the identity of the person i.e. the payer. A draft obtained from a person who is not even known to the assessee and showing the same as gift received from some NRI clearly proves beyond doubt the conscious and deliberate act on the part of the assessee to convert her black money as white money through the device of bogus NRI gift. The filing of a revised return will not expiate contumacious conduct on the part of the assessee of not disclosing her true income in the original return of income. 10. After the officers of the Income-tax Department detected the racket of persons engaged in arranging such NRI gifts the assessee had no choice but had to offer such amount as her income liable to tax. Once the assessee has conceded that the demand draft of Rs. 1,00,000 received from Shri Prakash B. Shah and shown as a NRI gift in her capital account is a bogus gift and she docs not even know the payer, there is nothing left for the department to prove that the assessee has deliberately concealed her income through such dirty device. 11. It may also be relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and when investigation started about bogus gifts and assessees were confronted with the material available with investigation wing of the department, they came forward to disclose the amounts of gifts of Rs. 2,00,000 in each case along with Rs. 20,000 being expenditure incurred for arranging of the gift by filing respective revised returns in each of these cases. Now, it is to be seen whether the additional income disclosed in the revised returns which was not disclosed in the original returns could be a ground for not imposing the penalty or would it amount to concealment for levy of penalty. Filing of the revised return by the assessee does not in itself either establishes her bona fide nor does it necessary imply that assessee has concealed the income. The circumstances in which the revised return is filed would really matter. The revised return came to be filed by the assessee under the circumstances and in the background that cannot be divorced from the question of bona fide of the assessee. The returns in these cases were filed after investigation about genuineness of the gift was undertaken by the department by including amount of gifts as well as amount spent for arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penal consequences. The mere fact that investigation by the department is a foot, though nothing tangible had come into the possession of the department at any particular point of time, may induce a dishonest assessee to submit a revised return. Such an exercise will not absolve him of the consequences flowing from an act which on his part had already been completed, namely, the concealment of income or the particulars thereof. To the same effect in the judgment of the Kerala High Court in Indian Cloth Depot v. CIT [1988] 173 ITR 330 wherein the plea of the assessee that the revised returns were voluntary which could not be made a basis for levy of penalty was rejected by the Inspecting Asstt. Commissioner, the Tribunal and even the High Court on reference. Yet in another case, similar view has been taken by the Karnataka High Court in the case of CIT v. Sudharshan Silks and Sarees [2003] 253 ITR 145. The head note of the said decision is reproduced hereunder:-- Penalty--Concealment of income--search and seizure operations showing that assessee had concealed its income--revised returns filed showing greater income--mere filing of revised returns not sufficient--no evidence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench, in which one of us (Accountant Member) was a party, for assessment year 1992-93 inSou Chandrakala C. Surpure v. ITO [IT Appeal Nos. 524 to 529 (Pune) of 2002] gave the following findings in paras 6 7 of its order dated 7th March, 2003:-- "6. The aforesaid chart given by the ld. counsel clearly indicates that the returns of income were filed after the date of issue of notice under section 148 of the Act to all of them. In any case, such revised returns were filed after 'NRI Scam' was detected by the officers of the department. It is also an admitted fact that the amount in question was not disclosed by the assessee as income liable to tax in the original return of income. The mention of such gifts in part IV of the return instead of supporting the assessees' contention goes against them as by mentioning false facts relating to receipt of foreign remittance/foreign gifts in party IV of the original returns these assessees had made a conscious and deliberate attempt to doss the officers of the Income-tax department. It is necessary to disclose true and full facts in the return of income so as to obviate levy of penalty under section 271(1)(c) of the Act Instead of mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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