9911796707
TMI Blog2003 (6) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer found that in the computation of the total income furnished alongwith the return the assessee had shown a sale of 56,000 shares of a company called Nilamber Holdings Ltd. from which after the indexing the assessee had shown a long-term capital gain of Rs. 20,18,600. The return so filed by the assessee disclosed that these capital gains were invested by the assessee in a residential property. According to the assessee as these gains were invested in the residential property, the same were exempted under section 54F of the Income-tax Act. The Assessing Officer sought various details pertaining to the share transaction from the assessee. The inquiries so conducted by the Assessing Officer on the information disclosed in the return filed depicted that the purchases of these shares of Nilamber f foldings Ltd. were made from one Maheshwari Sons having their office at 1748/55, Naiwala, Karol Bagh, New Delhi, while the sales were made to a party viz., Madhu Jain & Co., Room No. 13 BD Chamber, 10/54, DB Gupta Road, Karol Bagh, New Delhi. The Assessing Officer conducted further inquiries and found that the said Madhu Jain & Co. was operating through the premises belonging to one Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,30,000 was declared as income from sources. Along with the return challan of payment of tax was also furnished. 5. The Assessing Officer accepted the revised return filed by the assessee and computed the income of the assessee at Rs. 22,59,930. While finalizing the assessment, the Assessing Officer initiated penalty under section 271(1)(c) of the Income-tax Act by issuance of a notice to show-cause on 4th Sept., 1997, which was duly replied to vide assessee's letter dated 12th Sept., 1997. Though the copy of the reply filed by the assessee has neither been filed by the appellant nor by the Revenue, but the order of the Assessing Officer reveals that the reply filed by the assessee proceeded in the direction that as the assessment has been computed at an amount of Rs. 22,59,930 and as the Assessing Officer had accepted the withdrawal of claim under section 54F as well as claim for long-term capital gain and as the Assessing Officer added back the amount of total income assessed under section 143(1)(a) i.e., Rs. 2,94,920 to the income disclosed in the revised return the penalty proceedings in these circumstances have wrongly been invoked. 6. The explanation furnished by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has violated the provisions of section 271(1)(c) of the Income-tax Act. The learned Departmental Representative contended that in this case the assessee has not only violated the provisions of the substantive section, but also his case does not fall within the Explanation 1 of section 271(1)(c). The learned Departmental Representative contended that the assessee is guilty of having furnished inaccurate particulars of income as mentioned in section 271(1)(c). That apart, the explanation of the assessee that he has disclosed the material is also not correct. The learned Departmental Representative would contend that to draw the benefit of having filed a revised return it is incumbent on the assessee to show that the revised return was filed because there was a bona fide omission which led to discovery of wrong statement. The learned Departmental Representative would contend that though the filing of revised return is no bar, but the onus that some fact has been discovered in the original return which was wrong is on the assessee. The learned Departmental Representative contended that these ingredients are missing and the revised return was filed to cover up the lacunae and to jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative the assessee felt that there is no savior and it was in these circumstances the assessee filed a revised return disclosing the amount claimed by him as income from long-term capital gain and on which income he claimed exemption under section 54F. The learned Departmental Representative contended that if this is not a case in which penalty under section 271(1)(c) is to be confirmed then there cannot be any other better case than this. 9. In support of her contention the learned Departmental Representative relied upon the judgments of the Apex Court in K.P. Madhusudhanan v. CIT [2001] 251 TTR 99. At the threshold while referring to this judgment the learned Departmental Representative contended that the CIT(A) has relied upon the judgment in the case of Sir Shadilal Sugar & General Mills Ltd. v. CIT[1987] 168 ITR 705 (SC) is not a good law as per the decision in K.P. Madhusudhanan's case. 10. The learned Departmental Representative drawing strength from the judgment referred to above submitted that the ratio of these judgments is that the onus that there is no concealment and that the assessee has not furnished inaccurate particulars of the income is on the assessee and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concealed his income or the particulars of income. The case of the learned authorized representative was that the assessee had disclosed in the original return filed the sale and purchase of shares of Nilamber Holdings Ltd. It was contended that the capital gain after indexing was shown in the original return filed. That apart, the learned authorized representative contented that the amount so earned by way of long-term capital gain was shown to have been invested in the property and exemption was claimed. It was submitted that the assessee having disclosed the entire particulars of his income in the original return the case of the assessee was that by no stretch of imagination can it be said that the assessee is guilty of having furnished inaccurate particulars of his income. It was in this background he suggested that if later on the heads of income have been changed it would not be a case of concealment of income or furnishing inaccurate particulars of the income because income is not only to be taxed but taxed under a right head. The submission of the learned authorized representative was that the income has to be assessed under the heads and merely because the heads of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded above pointed against the bona fides of the assessee as is evident from the fact that the existence of the persons from whom shares were purchased and sold were not found and the existence of the company's whereabouts had become doubtful. To find the truth and get first hand information, the Assessing Officer issued summons to the assessee under section 131, the purpose for which the Assessing Officer issued summons under section 131 of the Income-tax Act. Summons were served, representative appeared before the Assessing Officer. The authorised representative sought time for the appearance of the assessee before the Assessing Officer for recording of the statement pursuant to summons under section 131 of the Income-tax Act which was granted. On the next date, before the Assessing Officer the assessee did not appear again, but sent his representative who informed the Assessing Officer that the assessee has withdrawn the claim of long-term capital gain as well as the claim of exemption under section 54F and has disclosed the entire income i.e., the sale price of shares minus the investment as income from other sources. On this statement the assessment was framed and the said amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the affairs of claim in the original return which assessee knew he would not be in a position to substantiate, he filed a revised return. We, therefore, say that filing of the revised return was not a voluntary act or to put it differently was not bona fide filed by the assessee, but it was intentionally done to cover up the lacunae or the defaults committed in the original return. We may further observe that it is worth noting here that in the original return the assessee had shown income as capital gain on sale of shares. But in the revised return he declared the income under the head 'income from other sources' without explaining the reasons and the source. This was done because the extensive enquiries and investigations made by Assessing Officer as mentioned above had revealed that the parties were not available and the transactions were not genuine and provable. The assessee had falsely shown the income under capital gains so that he could claim exemption under section 54F and get away without paying any tax thereon while having advantage of explaining investment in property. The clever method adopted by the assessee to hoodwink was dangerous and had to be viewed serious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed after the Inspector of Income-tax discovered the concealed income would not save the assessee from the agony of provisions of section 27l(1)(c) of the IT Act. Another judgment on which we may refer to and relied upon by the learned Departmental Representative in the case of G.C. Agarwal wherein the Apex Court confirmed the view of the Guwahati High Court holding that if the assessee fails to discharge the burden cast upon him that the omission in the original return was bona fide the penalty under section 271(1)(c) of the IT Act would be imposed. 18. The learned authorized representative for the assessee has relied upon the judgment of the Delhi High Court in the case of S. Sucha Singh Anand's case which was also a case of filing a revised return. The jurisdiction of the High Court held that there is no bar to an assessee filing a revised return under section 139(5) of the IT Act provided the assessee discovers any omission or wrong statement therein, but it has been held that if there is a deliberate omission of misstatement it will be the very first return which will be relevant for the purpose of imposition of penalty. 19. We may refer to the observations of Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(c) of the IT Act which was deleted by the Tribunal on the ground that the Assessing Officer had not taken any steps to pursue the original return to institute any inquiry to find out if those returns were true or false at the time assessee making voluntary disclosure and filing revised return. The matter travelled to the High Court and the High Court upheld the order of the Tribunal with the following observations: "The pertinent inquiry under section 271(1)(c) is not whether the return was true or false, but whether the assessee, in the course of any assessment proceedings had concealed particulars of his income. As, in the instant case, the ITO had not initiated any inquiry for assessment on the basis of original returns and the assessment proceedings were only on the basis of revised returns and in the said assessment proceedings the attempt of both the assessee and the Department was to estimate the assessee's profit from the sale of licence the Tribunal was right in its view that there was no concealment by the assessee justifying the levy of penalty." 22. A perusal of the said judgment reveals that if no steps have been taken by the Assessing Officer to investigate into t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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