TMI Blog2009 (1) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome have been disclosed by the assessee. The bona fide explanation of the assessee has not found false. Under the circumstances, we are of the considered view that neither the assessee has concealed its particulars of income nor has furnished such inaccurate particulars of income nor Explanation to section 271(1)( c ) is applicable. We, therefore, find that this is not a fit case for levy of penalty u/s 271(1)( c ). Accordingly, the penalty levied by the AO u/s 271(1)(c) and confirmed by the CIT(A) is hereby deleted. In the result, the appeal of the assessee is allowed. - A.L. GEHLOT AND SMT. ASHA VIJAYARAGHAVAN, JJ. Santosh Parab for the Appellant. K. Ravi Kiran for the Respondent. ORDER A.L. Gehlot, Accountant Member. - This appeal filed by the assessee is directed against the order of CIT(A)-XXVI, Mumbai, passed on 26-10-2007 for the assessment year 2003-04. 2. The ground raised by the assessee is pertaining to confirmation of penalty of Rs. 15,65,918 by the CIT(A), levied by the Assessing Officer under section 271(1)( c ). 3. The Assessing Officer completed the assessment after disallowing certain expenses debited to P L A/c incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cealment, the expression in clause ( c ) is has concealed the particulars of his income and not has concealed his income . The expressions "has concealed the particulars of income" and "has furnished inaccurate particulars of income" have not been defined either in section 271(1)( c ) or elsewhere in the Act. One thing is certain that these two circumstances are not identical in detail although they may lead to the same effect, namely, keeping off a certain portion of income. The former is direct and the latter may be indirect in its execution. 4.2 The word "conceal" is derived from the Latin concelare which implies con+celare to hide. Webster in his New International Dictionary equates its meaning "to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery of; to withhold knowledge of". The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. There is strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The penalty under that provision is a civil liability. Wilful concealment is not an esse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act . The forms are, accordingly, prescribed by the rules framed under the Act. Section 140 lays down as to by whom such return can be signed and verified. 4.4 Rule 12 of the Rules framed under the Act prescribe the forms in which the return of income is required to be furnished. The return is required to be verified in the manner indicated in the form. By such verification the assessee declared to the best of his knowledge and belief that the inform-ation given in the return and the annexure and statements accompanying it was correct and complete and that the amount of total income and other particulars shown therein were truly stated and related to the previous year relevant to the assessment year in question. It was also to be stated therein on solemn declaration that no other income accrued or arose or was received by the assessee and that there was no other income including income of any other person in respect of which the assessee was chargeable to tax under the Act. It will also be noted from the contents of the prescribed forms of the return of income that the assessee is required to give various particulars of income under different heads. For example, in the Form No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete and that the amount of total income and other particulars shown were truly stated and related to the previous year relevant to the assessment year. A statement was also required to be made that no other income accrued or arose to or was received by the assessee. It will, thus, be seen that the form of return of income included a variety of particulars to be disclosed and the particulars of income to be disclosed can be seen against the items which related to disclosure of income besides particulars other than those which related to the income of the assessee, such as his name, address, status, etc. The forms of returns are obviously prepared in the context of the duty of a person to disclose his income from various sources under various heads of income as statutorily provided and his duty to disclose his total income in the return. The extent of his total income will determine the total income-tax liability of a person. Total income is defined in section 2(45) and it means the total amount of income computed in the manner laid down in the Act. Thus, for arriving at the total income, the income derived from all sources is to be considered as provided by section 5, when it is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sess the total income without requiring the presence of the assessee or production by him of any evidence that the return is correct and complete, as laid down in section 143(1). Where, however, the ITO was not satisfied without the presence of the assessee or production of evidence that the return is correct and complete , he was required to issue notice enabling the assessee to produce evidence on which he may rely in support of the return. The total income is, in such cases of regular assessment assessed after hearing the evidence adduced and considering all materials gathered by the ITO as provided in section 143(3). It, therefore, follows that in the assessment proceedings under section 143(2)(3), the ITO can find out whether the return of income was correct and complete. If he holds that the return of income was not correct or that it was not complete in respect of the particulars of income which were required to be stated in the return, he will reach the correct figure of total income and determine the sum payable by the assessee or refundable on the basis of such assessment. If the income chargeable to tax has escaped assessment for any assessment year, by reason of omis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished by the assessee. Under these circumstance if test of sweet dish is some different than the dish prepared by the assessee, it cannot said the assessee has concealed the particulars of his dish/income or has furnished inaccurate particulars of such dish/income. If the assessee prepared Namkin, Salt dish where sweet dish was required and furnished salt to Assessing Officer instead of sugar, in these circumstances that case is certainly a case of concealed the particulars of his dish/income or has furnished inaccurate particulars of such dish/income. 4.7 There cannot be a straight-jacket formula for detection of these defaults of concealment or of furnishing inaccurate particulars of income and indeed concealment of particulars of income and inaccurate particulars of income may at times overlap. It depends upon the facts of the each case. In the assessment proceedings the ITO while ascertaining the total income chargeable to tax would be in a position to detect the specific or definite particulars of income concealed or of which false particulars are furnished. Where in the constituents of income returned, such specific or definite particulars of income are detected as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceedings to be wholly distinct and independent of each other. In essence, the Explanation is a rule of evidence. Presumptions which are rebutting table in nature are available to be drawn. The initial burden of discharging the onus of rebuttal is on the assessee. The rationale behind this view is that the basic facts are within the special knowledge of the assessee. Section 106 of the Indian Evidence Act, 1872, gives statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on the Assessing Officer as to whether he can invoke the Explanation or not. Explanation 1 comes into operation when, in respect of any facts material to the computation of total income of any person, there is failure to offer an explanation or an explanation is offered which is found to be false by the Assessing Officer or the first appellate authority, or an explanation is offered which is not substantiated. In such a case, the amount added or disallowed in computing the total income is deemed to represent the income in respect of which particulars have been concealed. As per the provision of Explanation 1, the onus to establish that the explanation offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, we find that the Assessing Officer while making assessment has been calculated the income as per law on the basis of particulars of income furnished by the assessee. When the assessee furnished the relevant particulars of income, the Assessing Officer is duty bound to calculate the correct income. If the Assessing Officer discharge his duty in calculation of such income on the basis of particulars filed by the assessee, under that circumstances it cannot be held that the assessee has furnished inaccurate particulars of his income or has concealed the particulars of income. The assessee has furnished necessary explanation though not before the Assessing Officer but before the CIT(A) that the additions made are highly debatable legally. The assessee has substantiated its explanation filed before the CIT(A) and has proved that such explanation is bona fide and that all the facts relating to computation of total income have been disclosed by the assessee. The bona fide explanation of the assessee has not found false. Under the circumstances, we are of the considered view that neither the assessee has concealed its particulars of income nor has furnished such inaccurate particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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