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2009 (5) TMI 130 - AT - Income TaxLevy of Penalty u/s 271(1)(c) - Concealment of Income Or Furnishing Inaccurate Particulars of Income in the returns - search and seizure operation - issued notice u/s 153A - Gifts received in the previous years - surrendered for taxation - Gifts from NRI persons - Difference of opinion between the two members - Third member Order - CIT(A) deleted the imposed penalty - Assessee explained that he had filed copies of gift deed and other related papers and also offered additional incomes for taxation before any inquiry or commencement of any investigation - The offer was voluntary and without any prior detection by the revenue. HELD THAT:- Order AM - We are also of the view that the theory of gift is not probable in this case for the reason that, - (i) no one has stood up to own up the making the gift, (ii) the beneficiary, being the assessee, disowned the theory by sudden surrender of the amounts for taxation. Therefore, we are of the view that the conduct of the assessee was not bonafide when the returns were filed without in any manner disclosing the factum of the gifts even after search and seizure operation. The decision in the case of K.C. Builders [2004 (1) TMI 7 - SUPREME COURT] is thus not applicable to the facts of the case. Therefore, we are of the view that the assessee furnished inaccurate particulars of the income in the returns, making himself liable for the penalties. In the result, appeals filed by the Revenue are allowed. Order JM - Merely because an assessee had agreed to the assessment that cannot bring in automatic levy of penalty. If the assessee offers an explanation as in the present case, revenue authorities are expected to consider the acceptability of explanation and thereupon to judicially arrive at the conclusion of concealment of facts and figures. In the penalty proceedings if the explanation is found acceptable, notwithstanding addition was made by treating the amount as income from undisclosed source but penalty may not be levied. Contrary to this if the explanation is vague or futile or remained unsupported then certainly it is open for the revenue to impose the penalty however, otherwise not. Resultantly the findings of Learned CIT(A) are hereby affirmed and the grounds of the Revenue are dismissed - Both the appeals of the Revenue are hereby dismissed. Order Third Member - The Full Bench decision of the Supreme court in Dharmendra [2008 (9) TMI 52 - SUPREME COURT] there is no requirement of mens rea to be established and it is only a civil liability and therefore K.C. Builders [2004 (1) TMI 7 - SUPREME COURT] decision of the Supreme Court holding that the word "concealment" inherently involves the mental condition of the assessee with regard to the default may not be a good law. However, that does not mean that the provision contained in Explanation 1 are given a complete go bye and are not applicable. The surrender of the amount after receipt of the questionnaire cannot lead to an inference that it was not voluntary in absence of any material on record suggesting it to be bogus or untrue or the income the assessee before such surrender. The correct and accurate disclosure may be by filing the revised return or by furnishing the particulars of such income before the detection by the AO. The mere fact that the assessee had not revised returns or that the offer was by letter to avoid harassment to the assessee and the donors who were non-resident persons, it cannot convert an offer to tax as concealment of income. Therefore, in my opinion the assessee has not furnished inaccurate particulars of the income in the returns before detection by the Revenue. Therefore, mere omission of the surrendered income from the return of an item of receipt does neither amount to concealment nor furnishing of inaccurate particulars of income unless and until there is some evidence to show exist or some circumstances found from which it can be gathered that the omission was attributable to an intention or a desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. Apart from the surrender there was nothing more on record to hold the assessee guilty of offering the said amount on detection of the concealment. Even in assessment order there is nothing of that sort. There was no specific provocation or an apprehension of detection prevailing at the time when the offer was made and in the absence of any such imminent fear from the side of the revenue, if the assessee came forward and paid the tax thereon by adding the same in the returned income, it has to be taken as a voluntary offer to tax. On the face of the evidence in the shape of confirmation letters, bank accounts, passport etc. in the hands of the assessee, it might be valid gift that would have convinced a reasonably minded person, specially a person exercising a judicial function. The accepted position of law is that merely because an assessee had agreed to the assessment that cannot bring in automatic levy of penalty. The facts and circumstances and the merits of the case and the cogent evidences placed on record are such as to exonerate the assessee from concealment penalty. The CIT(A) in my opinion is right in deleting the penalty, his order is affirmed and the appeals of the Revenue are dismissed.
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