TMI Blog1994 (11) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... these: 3. The assessee was subjected to search both at its residential and business premises by the Income-tax Department on 3-12-1984, during the course of which pawned articles covering an investment at Rs. 2.32,175 were seized. 4. A petition under section 273A(iv) read with Explanation 2 was filed by the assessee before the Commissioner of income-tax on 18-12-1984 in which a claim was made that the articles in question belonged to Puran Prakash Gupta (HUF) of Unnao. In this petition it was, inter alia, claimed that the pawning business was started during early part of 1976 which flourished fast and grew well resulting in the assets of Rs. 2,22,000. That the HUF never maintained accounts. It, however, offered the whole of Rs. 2,22,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re me. 10. The learned Dy. CIT (Appeals) basically accepted the assessee's plea that there was no discrepancy or difference in the income returned by the assessee and assessed by the department and that being so no penalty was exigible on them. 11. The learned Senior D.R. strenuously contended before me that the learned Dy. CIT (Appeals) had clearly fallen into a legal error by holding that there was no concealment on the part of the assessee. This, it was submitted, was fallacious inasmuch as the concealment was not only detected by the department during the raid but was also admitted and accepted by the assessee unequivocally as was manifest from their petition under section 273A referred to supra. The returns which were, thus, flied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was submitted that by virtue of this Explanation, the assessee having made a full and true disclosure of the income to the Commissioner of income-tax within fifteen days of the seizure got exonerated as such disclosure would be deemed to have been made by the assessee prior to the detection of the concealment of particulars of income etc. by the department. 14. In support of their stand while the department placed reliance on a decision of the Jurisdictional High Court in the case of Banaras Chemical Factory v. CIT [1977] 108 ITR 96 (All.); the learned counsel for the assessee referred to a decision of the Apex Court in the case of Bo Mohan v. CIT [1979] 120 ITR 1 (SC). 15. I have taken into consideration the relevant facts as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the income returned by the assessee and the one which was assessed by the department, no penalty was imposable. 17. Clearly a case of concealment is made out and penalty imposable, the fact of a full and true disclosure made by the assessee only relevant for the purposes of the quantum of penalty. 18. A voluntary disclosure saves an assessee if it relates to his income, but not the concealed income. Such a disclosure does not exonerate or sets an assessee free or pardon him from the charge of concealment and its consequences if it relates to his concealed income. This view finds support from the ratio of the Hon'ble Allahabad High Court's decision in the case of Banaras Chemical Factory relied on by the department. 19. In so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p the other aspect of the matter, which although not raised by the assessee earlier, yet the same being a purely legal ground is allowed to be taken up. 22. Explanation 2 appended to section 273A of the Act which remained in force between 1-10-1984 till 24-5-1985 when it was omitted provided that in the event of a person making a full and true disclosure of his income to the Commissioner of income-tax within fifteen days of seizure shall be deemed to have made such disclosure voluntarily and in good faith as made prior to its detection by the Income-tax Officer. 23. It is noteworthy that this Explanation is appended to section 273A and is also qualifying by its very language which provides 'such person shall, for the purpose of clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnish correct particulars of his income or a concealment of the particulars of such income are contained in clause (c) of sub-section (1) of section 271, which is a part of section 271, which is the main provision for the imposition of several types of penalties on an assessee. No doubt, the Legislature added Explanation 2 only in section 273A of the Act and restricted its use only for the purposes of clause (b) of sub-section (1) of section 273A, yet there is no reason as to why a correct interpretative process should not extend the benefit of such a provision to clause (c) of sub-section (1) of section 271 of the Act. If before a Commissioner, an administrative authority, a legal fiction could treat a disclosure though made after the seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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