TMI Blog1993 (4) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently corrected at Rs. 92,377 in the course of assessment proceedings. The ITO completed the assessment under s. 143(3) on 8th Sept., 1978. The ITO, after computing the taxable income, inter alia, observed as under: "Charge interest under s. 139(8). Issue notice under s. 274 r/w s. 271(1)(a) for default under s. 139." In the assessment order there was no mention about the initiation of penalty proceedings under s. 271(1)(c), nor there was any direction for issue of a notice under that section. The ITO for the first time issued a show cause notice under ss. 274/271 on 12th March, 1981 requiring the assessee to show cause as to why penalty should not be levied for concealing the particulars of income or furnishing inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested that the penalty proceedings should be dropped. The quantum appeal was decided by the CIT(A) vide order dt. 23rd Feb., 1980 in which addition of Rs. 3,20,000 was deleted. The income was assessed, after giving appeal effect of the CIT(A)'s order, at Rs. 65,760 as against the income originally determined at Rs. 3,85,755. 3. The ITO levied penalty under s. 271(1)(c) amounting to Rs. 92,377 equivalent to the alleged amount of income concealed. The CIT(A) held that any satisfaction recorded by the ITO in the order sheet but not communicated to the assessee will not justify levy of penalty. The penalty proceedings in the present case were not validly initiated. On merits also he held that revised return was filed voluntarily by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars of her income in the original return submitted by her. The mere fact that the income was voluntarily disclosed by her in the revised return will not absolve her from the responsibility of filing an incorrect original return concealing the particulars of income therein. He placed reliance on judgments reported as Garden Silk Wvg. Factory vs. CIT (1988) 70 CTR (Guj) 137 : (1988) 172 ITR 575 (Guj) and G.C. Agarwal vs. CIT (1991) 95 CTR (SC) 257 : (1990) 186 ITR 571 (SC). Pursuant to a query from the Bench as to whether any investigation or enquiry was conducted by the Revenue prior to furnishing of the revised return which was likely to discover the said income from undisclosed sources, the learned Sr. Departmental Representative was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been issued during the course of assessment proceedings. Satisfaction, in the very nature of things, precedes the issue of notice and it would not be correct to equate the satisfaction of the ITO with the actual issue of notice. In view of aforesaid finding given by the Hon'ble Supreme Court, the initiation of the penalty proceedings in the present case according to the Department cannot be treated as invalid. There is no quarrel about this principle. The legal principles have to be applied after ascertaining the similarity of the facts. In the case of D.M. Manasvi, relevant facts as summarised by the Hon'ble Supreme Court appearing at page 561 are as under: "In the present case, we find that the ITO, while making the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or furnishing of inaccurate particulars in the assessment order. The non-mention about the initiation of penalty under s. 271(1)(c) in the assessment order is a strong circumstance which supports the assessee's contention that the proceedings had not been properly initiated in accordance with the provisions of law. The other vital fact which is relevant in this regard is that the show cause notice, for the first time, had been issued after a gap of more than 2-1/2 years on 12th March, 1981 when the penalty proceedings were going to be barred by limitation of time in the month of March, 1981. The absence of any mention about the recording of such a satisfaction relating to concealment of income or furnishing of inaccurate particulars of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the statement of accounts by the assessee. The assessee submitted a revised return on 11th March, 1974 (i.e. after issue of letter dt. 4th Feb., 1974 by the ITO) declaring a total income of Rs. 1,58,917 the difference being an amount of Rs. 57,000 which was debited twice. On these facts the Hon'ble High Court held that levy of penalty under s. 271(1)(c) was not valid as the assessee had disclosed such income voluntarily in the revised income. In view of the aforesaid judgment and in view of the elaborate reasons given in the order of the learned CIT(A) we confirm the findings on merits also. In view of aforesaid discussions, there is no justification in interfering with the order of the CIT(A). 7. In the result, the appeal is dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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