TMI Blog2013 (11) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... usive of the amount which was surrendered later during the course of the assessment proceedings - it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year – Decided against the Assessee. - Civil Appeal No. 9772 of 2013 (Arising out of Special Leave Petition (Civil) No.18389 of 2013) - - - Dated:- 30-10-2013 - K. S. Radhakrishnan And A. K. Sikri,JJ. JUDGMENT K. S. Radhakrishnan, J. 1. Leave granted. 2. The Appellant-assessee filed his return of income for the assessment year 2004-05 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiation of penalty proceedings and prosecution. 3. The AO after verifying the details and calculations of the share application money accepted by the Company completed the assessment on 29.12.2006 and a sum of Rs.40,74,000/- was brought to tax, as income from other sources and the total income was assessed at Rs.57,56,700/-. 4. The department initiated penalty proceedings for concealment of income and not furnishing true particulars of its income under Section 271(1)(c) of the Income Tax Act. During the course of the hearing, the assessee contended that penalty proceedings are not maintainable on the ground that the AO had not recorded his satisfaction to the effect that there has been concealment of income/furnishing of inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of clause (A) of Explanation 1 is attracted. Holding so, the judgment of the Tribunal was set aside and the appeal filed by the Revenue was allowed. 6. We have heard counsel on either side. We fully concur with the view of the High Court that the Tribunal has not properly understood or appreciated the scope of Explanation 1 to Section 271(1)(c) of the Act, which reads as follows :- Explanation 1 Where in respect of any facts material to the computation of the total income of any person under this Act, -- (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) Such person offers an explanation which he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not recognize those types of defences under the explanation 1 to Section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the Appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain docum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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