TMI Blog2014 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... intention to avoid payment of tax - there is a distinction between furnishing of wrong particulars and making a wrong calculation on the basis of the particulars furnished and a mistaken calculation is distinct from concealment. There existed an intent to prevent relevant facts from becoming known - The assessee does have a duty to verify the particulars furnished by him are accurate - If all the circumstances and developments till the assessment is completed are taken into consideration, their collective effect show that the revised return was filed only after the evidences for filing inaccurate particulars were detected - the AO had held that commission/brokerage income of ₹ 39.12 lakhs were not offered for taxation for the year under consideration - the assessee not disclosed a part of his income, while filing his return and it was only after the survey that he revised the return - an intention of concealment of true particulars of income or deliberate furnishing of inaccurate particulars by the assessee was established by the AO - the AO had not accepted any conditional admission, rather his order is based on facts relevant for the year – thus, the order of the FAA is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to ₹ 39,12,752/-,during the year under appeal.He required the assessee to furnish details of total receipts credited to P L A/c.of ₹ 61,68,023/-.After considering the submission -ns of the assessee,the AO held that the assessee had not disclosed the cash receipts of ₹ 30,12, 752/- in the original return filed on 30/10/2006,that the assessee had concealed particulars of his income and furnished inaccurate particulars of such income.He initiated penalty proceedings u/s. 271(1)(c) of the Act.In response to the penalty notice assessee filed an explanation vide letter dated 17.11. 2007 and stated that disclosure of ₹ 75 lakhs made for the AY- 2006-07 was made to cover deficiency for all the years prior to the date of survey,that while examining the details for the AY 2006-07, the AO could only find deficiency of ₹ 13.12 lakhs as against ₹ 75 lakhs disclosed by the assessee,that no unaccounted assets were detected during the course of survey, that assessee declared higher income on the clear understanding that no penalty would be charged. After considering the submission of the assessee, AO held that assessment for the AY 2006-07 was based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orised Representative(AR)supported the order of the FAA.He relied upon the matters of SAS Pharmaceuticals (335ITR259) and Reliance Petroproducts Pvt. Ltd.(322ITR158) 5.We have heard the rival submissions and perused the material before us.Undisputed facts of the case are that the assessee had filed revised return after a survey was conducted at the business premises of the assessee,that he admitted an additional income of ₹ 75 lakhs,that the AO held that the assessee had not disclosed the cash receipts of ₹ 30,12,752/- in the original return,that he levied penalty of ₹ 9.65 lakhs u/s.271(1)(c)of the Act,that the FAA had deleted the penalty. He was of the opinion that declaration made by the assessee was more than the discrepancies found during the survey. 5.1.Before proceeding further,we would like to consider the general principles, propounded by the Hon ble Courts,with regard to concealment penalty and issue of filing of revised returns and levy of such penalty in light of some of the cases wherein this issue has been deliberated upon.Some of the principles can be summarised as under: a.In order to justify the levy of concealment penalty two factors mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be correct that where a revised return as contemplated u/s. 139(5)of the Act is submitted before the assessment is made after an assessee discoveres some omission or some wrong statement in the original return,a penalty proceeding for concealment of the particulars of income or furnishing inaccurate particulars of such income as contemplated u/s. 271(1)(c) of the Act may not be attracted.But,for that purpose,the revised return itself must be within the correct ambit and scope of section 139(5). In the matter of Sulemanji Ganibhai, Hon ble M P High Court (121ITR373)has explained the above principle in following manner: The duty to disclose particulars of his income arises at the time when the assessee furnishes the return under s. 139(1) and if the assessee in filing his return conceals the particulars of his income or furnishes inaccurate particulars he incurs the penalty under s. 271(1)(c). The provision dealing with revised return in s. 139(5) says that if any person having furnished a return discovers any omission or wrong statement therein, he may furnish a revised return at any time before the assessment is made. A revised return can be filed only when the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra)the Hon ble Court held that the actual result of the assessment has nothing whatever to do with an attempt made by the assessee to conceal particulars of his income in his original return in which he deliberately furnished inaccurate particulars of his income and that the fact that the income had not escaped assessment as a result of the concealment made in the original return is of no consequence for imposing penalty u/s.28(1)(c) of Indian Income Tax Act,1922.The Hon ble Madras High Court in Sivagaminatha Moopanar Sons (52ITR591)held that if the assessee,at the time of submitting the original return,intended to conceal a part of his income, or deliberately gave false particulars at that time, and the mere fact that he subsequently rectified the omission by giving full particulars,would not avoid the applicability of s 28(1)(c)of the 1922 Act. 5.c.Filing of revised returns,admission of additional income and justification of levy of concealment penalty is such cases has been the subject matter of many a cases.We would like to consider a few important such matters.First of them is the matter of Jyoti Laxman Konkar, delivered by the Hon ble Bombay High Court(292ITR163).In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing the appeal,Hon ble Court held as under: In our view,the Assessing Officer as well as the Income-tax Appellate Tribunal having come to the conclusion that the assessee had filed the initial return dishonestly with a view to conceal the income and the revised return was filed out of compulsion, i.e., after having found that the assessee had concealed the income and filed a false return with a view to avoid tax liability,in our view, no substantial question/s of law arises in this case either in the manner formulated on behalf of the assessee in the memorandum of appeal or otherwise ..Whether there is concealment of income or not has to be decided with reference to the facts of a given case and the fact-finding authorities under the Act having come to the conclusion that in the facts of the case, the assessee had concealed the income initially with a view to avoid the payment of tax, we are of the view that no substantial question of law is involved in this case requiring the admission of the appeal. Consequently, the same is hereby dismissed. Next matter we would like to consider is of K.P.Sampath Reddy(197ITR232),delivered by the Hon ble Karnataka High Court.In that ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts found during the course of survey according to the Department,revealed that the assessee was carrying on a money lending business outside its books of account and the income from the said source was not disclosed in the original returns filed by the assessee for the said three assessment years. The assessee contended that the materials found during the survey did not reveal any such income from money lending business.However, the assessee approached the Commissioner with a settlement petition, stating that it was carrying on money lending business for the past three years and had not maintained any books of account for the money lending business and that the transactions were not accounted for in the regular books of account in respect of the money lending business carried on by it. The assessee thereafter requested the Commissioner to direct the AO to settle the assessment suitably not only for the three assessment years under consideration but also for subsequent assessment years, namely, 1970-71, 1971-72, 1972-73 and 1973-74.Since the assessments for the first three years were already completed, the AO reopened the assessments for the three assessment years 1967-68, 1968-69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: i.)Section 139(5)and section 271(1)(c)of the Act meet two different situations.The first proceeds on the basis of the omission or wrong statement which had crept into the original return being inadvertent and unintentional,whereas section 271(1)(c) proceeds on the basis of the concealment being deliberate and the furnishing of inaccurate particulars being wilful and intentional.In other words,where a revised return is filed,the crux of the matter is that if after examining the return and the accounts of the assessee in the course of the assessment proceedings,the AO discovers an omission or wrong statement made by the assessee and, thereafter, a revised return is filed, then the assessee cannot be absolved of the liability for imposition of penalty u/s.271(1)(c), but if the assessee himself voluntarily files a revised return before the order of assessment is made, after he has himself discovered an omission or wrong statement in the original return,then in such a case,penalty for concealment of particulars of income or for furnishing inaccurate particulars of such income,as contemplated u/s.271(1)(c),cannot be imposed.151.333 ii).If the survey proceedings show stocks great ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was confronted with these findings,he filed a revised return of income.In our opinion,filing of such a return,cannot be termed voluntary filing of return.We also find that the rebuttal of the assessee is neither relevant materials and not cogent.After considering the relevancy and sufficiency of the materials we hold that that the omission or wrong statement by the assessee in the original return was not due to any bona fide or inadvertent mistake on his part. AO had not only arrived at the conclusion that the explanation filed by the assessee was not bona fide,but he also held,as a fact,that the assessee had not disclosed all the facts which were material for the computation of its income.In the case under consideration there is proper application of mind on part of the AO and there is recording of an opinion on his part that a case for initiation of penalty proceedings was made as there was furnishingof incorrect particulars by the assessee,with an intention to avoid payment of tax.We are aware that there is a distinction between furnishing of wrong particulars and making a wrong calculation on the basis of the particulars furnished and a mistaken calculation is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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