TMI Blog2001 (3) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... /sales of Hotel Chandan were much higher than those estimated by the assessee. The AO assessed the total income for the asst. yr. 1987-88 at Rs. 3,02,835 and for asst. yr. 1988-89 at Rs. 4,07,630. The AO initiated penalty proceedings under s. 271(1)(c), since according to him, the assessee had not furnished correct particulars of income from his proprietary business of Hotel Chandan. In response to the show-cause notice, the assessee submitted before the AO as follows: (a) Due to non-availability of full information, the income from Hotel Chandan was estimated. After on, after taking inspection of the seized records in the custody of the Department he furnished a revised return of income declaring an enhanced income. (b) In the revised return of income the assessee declared his sales at Rs. 17 lakhs, the AO enhanced it to Rs. 18 lakhs and the CIT(A) settled at Rs. 17.5 lakhs. This addition was made on the basis of estimate and no concealment was detected by the AO. The AO was not satisfied with the explanation furnished. In the penalty order for the asst. yr. 1987-88, the AO has observed as under: "The simple fact that a diary recording his daily turnover was scrupulously m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87-88 and 1988-89 were seized on 30th Sept., 1987. Returns for the same years had not been filed till the date of search. The returns for the said years were filed subsequently in 1989 by estimating income on the basis of earlier income because of non-availability of the books and records which were seized. If the inspection was to be taken, it would have taken further time and the assessee would have faced the consequences of delayed return. Thus, the assessee had no choice but to estimate his income based on his earlier income. He submitted that the contention of the AO that the revised return with higher income was furnished only after confrontation with the diary showing the actual turnover is not true and correct. Before the case being heard, the assessee wanted to rectify the mistake, if any, and asked for the inspection of the seized material and found the impounded diary which contained some notings made about sales for few months. On this basis and to be on the safer side, the assessee had estimated the sales himself for the whole year and estimated the income. This higher sales and higher income was estimated by the assessee voluntarily in order to buy peace of mind and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant. The entire material should be considered afresh by the authorities below before imposing penalty. Even after addition of Explanation to s. 271, conscious concealment is necessary. The Explanation provides only a rule of evidence raising rebuttable presumption in certain cases. No substantive right is created or added thereof. Substantive law relating to levy of penalty is preserved. In the present case the search took place on 30th Sept., 1987 and the books of account for the asst. yrs. 1987-88 and 1988-89, were seized on the same date. When the books of account were seized, returns for the said years had not been filed till the date of seizure. Returns for the said years were filed subsequently on 30th Aug., 1989, by "estimating" income on the basis of earlier income because of non-availability of books and records which were seized by the Department. If the inspection was to be taken, it would have taken further time and the assessee would have faced the consequences of delayed returns. Thus, the assessee had no choice but to estimate his income based on his earlier income. Thereafter, the assessee got inspection of the seized books and filed revised returns with high ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The dictionary meaning of the word detect is to discover the true especially hidden or disguised character or to discover to determine the existence, presence or fact". In the instant case, certain documents and papers were seized. They might or might not reveal concealment. Even the seizure could not lend to a prima facie belief as to concealment as the contents, purport and the implications of the documents were yet to be gone into. Therefore, at the point of time the return under the Amnesty Scheme was filed, the AO admittedly had no idea as to whether the seized papers would reveal any concealment. The mere fact that the petitioner appellant s case was awaiting a probe with reference to his past records as well as extrinsic sources could not lead to his ouster from the scope of the scheme." We find that though the assessee took two years to file the returns and another year to file revised returns, but during these three years, the Revenue did not carry out any investigation in respect of the search material and, accordingly, the ratio laid down by the Calcutta High Court in the case of Anand Kumar Saraf applies here. In the case of Yeshwant B. Chigteri vs. Asstt. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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