TMI Blog2009 (7) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... . Held that- in this situation it cannot be said that assessee had defaulted in payment of installment of advance tax, as the amount of Rs. 10 lakhs was offered by way of income for the first time as per the assessee’s letter, thus the addition of income under section 234A and 234B in the case of the assessee was not necessary and not justified. - 596 of 2004 - - - Dated:- 8-7-2009 - D. V. SHYLENDRA KUMAR AND ARAVIND KUMAR JJ. A. Shankar for the appellant. M.V. Seshachala for the respondent JUDGMENT The judgment of the court was delivered by 1. D.V. SHYLENDRA KUMAR J.- Appeal by an assessee, an individual, in respect of the assessment year 1998-99, who though had initially filed return claiming a loss of Rs.1,17,480, on scrutiny by the Assessing Officer in respect of the particulars of the returns and later on the assessee volunteered to offer an additional income of Ps.10 lakhs, had been assessed and on such premise had been asked to bear a tax liability of Rs.2,23,856 on a net income of Rs.8,29,520 with the addition of a sum of Rs.13,426 as interest under section 234A of the Income-tax Act, 1961 (for short, "the Act") and a further sum of Rs. 92,877 towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, as claimed by the assessee, before the banks such as State Bank of India, Karnataka State Finance Corporation, State Bank of Mysore, TGMC Dank, Tumkur, etc., and further that the assessee had not reflected the trading activities in sale of rice, for which purpose, it appears, the assessee had been purchasing considerable quantities of rice from a dealer at Manvi, etc. 6. In this context, the assessee had been issued with notices under sections 142(1) and 143(2) of the Act. At the time of assessment and during the course of personal appearance of the assessee before the Assessing Officer on February 28, 2000, which was the third date of hearing and had been preceded by two earlier hearings on December 27, 1999, and January 17, 2000, before the Assessing Officer, the assessee gave a letter stating that he is offering a further income of Rs.10 lakhs , mainly to buy peace with the Department and to avoid further scrutiny and the probing that the Department wanted to conduct and this offer was accepted at its face value by the Assessing Officer, who concluded the assessment on such premise and determined the tax liability of the assessee, after allowing the set off of Rs.1,70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the assessee cannot be permitted to resile from his offer of an additional sum of Rs.10 lakhs to the income of the assessee and, therefore, upheld the orders of the lower authorities and dismissed the appeal. It is assailing such orders, the present appeal is filed. 10. The submission of Sri A. Shankar, learned counsel for the appellant assessee is that a mere admission by the asses before the Assessing Officer is not sufficient to fasten a tax liability under the Act, it should be a determination in terms of the provisions of the Act. It is submitted that the Assessing Officer is duty bound to determine the actual tax liability based on the available material and in accordance with law; that a mere offer by the assessee is no substitute for quantification of the tax liability of the assessee; that while the assessment order suffers from such error, it is also submitted that the assessee, who had been virtually coerced into offer an additional income of Rs.10 lakh over and above what is stated in the return by him and in fact no opportunity was given to retract before the Assessing Officer, as the assessment order was passed immediately on the heels of giving the letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-Revenue, submits that the assessee's case has been treated as scrutiny case and it was during the scrutiny, many facts came to the notice of the Assessing Officer, which were otherwise not made known. The submission is that the discrepancies with regard to the statement made by the assessee before the banks and as indicated in the return, were made known to the assessee and the assessee was also called upon to explain as to the reason for such discrepancies, with regard to the investment made and such other aspects; that when this was being examined by the Assessing Officer during the hearing and the personal appearance of the assessee and his representative, the assessee voluntarily came forward to offer an additional income of Rs.10 laths with a request to drop further probe and he may be provided protection from prosecution, penalties, etc. 14. It is submitted that in such a situation, the Assessing Officer had acted on the offer made by the assessee, stopped further probe and concluded the assessment, on the basis of the voluntary disclosure made by the asses see and, therefore, the assessment order cannot be characterised as bad in law and or not supportive; th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icularly to avoid further probe into his actual income from his business and from the activities of running of the rice mill and also from the activity of trading in rice and to avoid further probe and scrutiny into the investment made for setting up the industry, etc. As to whether the precise tax liability would have crystallised in the amount now determined by the Assessing Officer is speculative and it could have been either less or more, when the assessee on his own, in the wake of his need for avoiding further probe and scrutiny, offered this amount, it can be reasonably inferred that the assessee is obviously striking a balance to avoid a bigger liability or harsher consequences. 19. Be that as it may, when the assessee had voluntarily offered the amount by way of income, there was nothing further for the authority to do when the authority is accepting it at its face value. It is for this reason we find the authorities relied upon by learned counsel for the appellant do not advance the case of the appellant in the present circumstance and reject the sub missions on behalf of the appellant. 20. In so far as the levy of interest is concerned, while it is a statutorily ..... X X X X Extracts X X X X X X X X Extracts X X X X
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