TMI Blog2002 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... tions were conducted on the land which was shown to have been taken on lease. After these enquiries, assessee was again summoned under section 131 and required to produce whatever evidence regarding agricultural income. No further evidence was submitted. However, a revised return was filed on 29-3-1993 in which agricultural income of Rs. 1,71,550 was offered as income from business. Assessing Officer observed that so called agricultural income was offered for taxation only after detailed enquiries were made, therefore, penalty proceedings under section 171(1)(c) were initiated. 2. During penalty proceedings, assessee submitted that person who had given land on lease was unwilling to appear before the Assessing Officer and assessee had in fact taken the land on lease and cultivated the same. This agricultural income was offered by him for taxation to avoid litigation and a petition under section 273A was filed with CIT which was pending. Assessing Officer did not find these submissions convincing and imposed a penalty of Rs. 90,000. 3. Before Commissioner (Appeals), it was contended that penalty cannot be imposed under the provisions of the Act for surrendered amount unless conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court to pass any decree and such defect cannot be cured even by the consent of parties". Thus, according to him, as assessment order itself was nullity the penalty proceedings are also bad in law. He further submitted that assessee had filed revised return with a condition that no penalty should be imposed and AO therefore could not initiate penalty proceedings if the income has been determined on the basis of revised return. In this connection, he also referred to section 23 of Evidence Act. He also contended that burden to prove that there was concealment was on the revenue. In this regard, he relied on CIT v. Dharam Chand L. Shah [1993] 204 ITR 462 (Bom.), CIT v. Ganesh Prasad Badriprasad Co. [1998] 231 ITR 951 (MP.), CIT v. P.M. Shah [1993] 203 ITR 792 (Bom.). He also referred to the decision of Hon'ble M.P. High Court in case of CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 wherein it has been held that when the return is revised to buy peace, then no penalty can be imposed. He also referred to the decision of Hon'ble Delhi High Court in CIT v. Agrawal Pipe Co. [1999] 240 ITR 880 where deletion of penalty was field to be justified even when assessee had shown its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to in penalty proceedings. He then referred to decision of Hon'ble Supreme Court in G.C Agrawal's case in which assessee had filed revised returns showing much larger income but was not able to establish that there was some inadvertent mistake or omission in original return. In the absence of inadvertent mistake, imposition of penalty was confirmed. Similar view was taken by Hon'ble M.P. High Court in Sulemanji Ganibhai v. CIT [1980] 121 ITR 373. He contended that right to file revised return has been given in the Act to cover up the bona fide mistakes which is not a case of assessee. Assessee had filed revised return only after detailed enquiry by the assessee was completely cornered and the same cannot be called revised return. In this regard, he relied on Hakam Singh v. CIT [1980] 124 ITR 228 (All.). He then referred to page 1 of assessment order which only refers to return filed on 31-5-1991 which was original return and notice is under sections 143(2) and 142(1) where issued against this return, thus, revised return was never acted upon by the deptt. In any case, only one figure of income has been taken from revised return and some more additions were made even to that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e because AO was prima facie satisfied that penalty proceedings should be initiated. In view of the decision of Hon'ble Supreme Court in D.N. Manasvi's case, there was no need for holding separate proceedings before issue of penalty notice. He also submitted that ratio of Suresh Chandra Mittal's case cannot be applied because in that case revised return was accepted without doing anything. In any case, this judgment was based on the decision of Sir Shadi Lal Sugar Gen. Mills Ltd.'s case, which has been specifically over ruled by Hon'ble Supreme Court in K.P. Madhusudhanan's case. 6. In the rejoinder, Ld. AR submitted that in any case while computing the income, figure of revised return was taken which means revised return was acted upon by AO which was non est in law, therefore, assessment order itself is without jurisdiction. He also submitted that statement of Chogalal as well as Shri Laxmi Narayan was recorded behind the back of assessee, therefore, same cannot be made basis for assessment as well as penal proceedings. In this regard, he relied on Kishanchand Chellaram v. CIT [1980] 125 ITR 713 (SC). He referred to page 15 of the compilation filed by Deptt. which is copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected to in penalty proceedings. As far as burden of proof is concerned, in Dharam chand L. Shah's case and other cases it was held that where explanation to section 271(1)(c) was not invoked, then burden to prove the concealment lies with the revenue but once the Explanation has been specifically invoked, then not only the burden is shifted on the assessee but lie is also to prove that he had not concealed particulars of his income or furnished inaccurate particulars thereof. After the latest decision of Hon'ble Supreme Court in case of K.P. Madhusudhanan where it has been held that Explanation is part of the section and there is no need to invoke the section separately, the earlier decisions are of no help to the assessee. In the instant case, AO had made detailed enquiries and when assessee showed his inability to produce the lessor of so-called agricultural land which was shown to have been taken on lease only then AO made other enquiries and from the statements of Patwari as well as statements of Chogalal and Laxminarayan, it was clearly found that some of the land shown to have been leased out to assessee never belonged to these people and in fact was Govt. land. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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