TMI Blog2015 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty order, AO has in clear terms mentioned that imposition of penalty is for concealment of income and not furnishing of inaccurate particulars of income, but, ld. CIT(A) has observed that assessee has furnished inaccurate particulars of income. From the aforesaid facts, it is clear that the departmental authorities are not sure as to which limb of the penalty provision is attracted. Therefore, considering the totality of facts and circumstances and keeping in view, the observations made by Settlement Commission, we are of the opinion that since no conclusive finding or material has been brought on record to prove either concealment of income or furnishing of inaccurate particulars of income, imposition of penalty in the facts and circumstances of the present case is not justified. As far as the decisions relied upon by learned D.R. are concerned, though we fully agree with the principles laid down therein, however, they cannot be applied uniformly to all cases divorced from the facts on the basis of which such principle are decided. After careful analysis of the decisions, we are of the view that they will not apply to the facts of the present case. In aforesaid view of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisclosed income of ₹ 8,18,63,700 for AYs 2005-06 to 2009-10 but also paid taxes thereon amounting to ₹ 4,39,59,547. The details of income offered and taxes paid as mentioned in the application filed before the Settlement Commission for different assessment years are as under: A.Y. Income returned Income offered before the ITSC Revised total income 2004-05 1,16,276 0 0 2005-06 1,14,840 44,36,000 45,50,840 2006-07 1,16,890 2,87,60,000 2,88,76,890 2007-08 98,700 93,00,000 93,98,700 2008-09 2,07,500 2,59,32,500 2,61,40,000 2009-10 3,02,250 1,34,35,200 1,37,37,450 Total 9,56,456 8,18,63,700 8,27,03,880 3. On the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context of facts and materials on record, noted that though assessee in the application made before the Settlement Commission had offered additional income of ₹ 8,18,63,700 for the AYs 2005-06 to 2009-10 and also paid taxes on them, however, the Settlement Commission rejected application on the ground that unaccounted income disclosed in the application filed by assessee was not true and did not pertain to him. She further noted that in case of M/s JB Educational Society and M/s Joginapally BR Educational Society appeals were filed before ITAT challenging similar additions made. In course of hearing before ITAT, a sworn affidavit of Shri R. Kondal Rao, present assessee, was filed wherein he stated that the excess fees/capitation fees collected by him is his own income, which he collected without approval of the management and without revealing it to the management. She further noted that on the basis of the affidavit filed, the Tribunal held that since the excess fees/capitation fees has been admitted as undisclosed income by Shri R. Kondal Rao, no addition of the said amount can be made at the hands of the institution/society. On the basis of the observation made by ITAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not sure at whose hands income is to be assessed. Ld. AR referring to the decision of ITAT Hyderabad in case of Sun Infra Vs. ACIT, 30 ITR (Trib) 451 submitted, when assessee from initial stage of search and seizure operation proceeding has consistently offered the additional income and there is no other material before AO to either prove concealment of income or furnishing of inaccurate particulars of income, rather, on the basis of the declaration made by assessee, assessments have been completed, imposition of penalty is not justified. 6. Ld. DR, on the other hand, submitted before us, assessee even though declared additional income in application filed before the Settlement Commission, but, he nevertheless failed to offer the said additional income in the returns filed for AYs 2005-06 to 2009-10 in response to notice u/s 153A of the Act. Therefore, assessee having not made any voluntary disclosure of additional income and on the contrary having failed to disclose the income even though he has earned such income, the provisions of section 271(1)(c) are clearly attracted. He further submitted, since there is no voluntary disclosure by assessee, explanation 1 and 5A of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, Shri Purnachandra Rao Pusti and Shri Ganji Meghnath have categorically stated in their statements that they were merely negotiating on behalf of Shri Bhaskar Rao and whatever unaccounted capitation fees was received in cash was handed over to Shri Bhaskar Rao. They have further admitted that even the quantum of unaccounted capitation fees was fixed in consultation with Shri J. Bhaskar Rao. We have noted that, at different points of time both during and after the search, Shri Bhaskar Rao, Shri Vamsidhar Rao and Shri J.K. Rao have confirmed the correctness not only of their own statements but also those given by Shri Purnachandra Rao Pusti, Shri K. Ashok Mehta Reddy and Shri Ganji Meghnath. These statements are not retracted by any one. In addition, J. Bhaskar Rao declined to cross-examine these persons when such an opportunity was given to them. iii) The statements of the applicant recorded during the search or later nowhere indicate that it was he who finalized/collected/utilized the unaccounted cash receipts. iv) We do not find any merit in the contention of the ld. AR that the applicant had embezzled the funds which have been received by way of unaccounted capitation fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion between the Settlement Commission and A.O. on the ownership of income, assessee cannot be proceeded for imposition of penalty u/s 271(1)(c) only because he has come forward to offer such income or it has been assessed in his hands for whatever may be the reason. 9. Though, it may be a fact that in course of hearing of appeal in case of educational institutions before ITAT, an affidavit was filed by Sri R. Kondal Rao, present assessee, wherein it is stated that excess/capitation fees collected was not handed over to the management and it is his income but on scrutiny of the said affidavit, as has been extracted in the order passed by Tribunal in ITA No. 29/Hyd/2013 and others dated 28/10/2013, it is very much clear that statements made in the affidavits are almost identical to the facts mentioned in the application filed before the Settlement Commission by assessee. No doubt, similar addition made in the hands of educational institutions were deleted by the tribunal on the basis of the affidavit filed by the assessee Sri R. Kondal Rao. However, the conclusion drawn by the Tribunal is not because of any positive evidence on record to conclusively prove the fact that the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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