TMI Blog2014 (6) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... hich it promptly filed and paid the tax with interest. It is not a case where the assessee did not offer any explanation nor the explanation offered by it was found to be false or not found to- be bona fide. Partially it was successful in proving its defense. Therefore, it is a case where, the assessee was not successful in establishing his defense. Therefore, there was no intention either to suppress information or to file any incorrect statement. At this juncture it is pertinent to note that in the notice issued to the assessee, the department has not made it clear what is the accusation against the assessee and it was full of blanks. In those circumstances, the Tribunal on proper consideration of the entire material on record and after taking note of the law on the point as decided by the various courts, rightly held that there is no suppression of material facts and was justified in setting aside the order passed by the First Appellate Authority as well as the Assessing Authority. - Decided in favour of the assessee - IT Appeal No. 151 of 2008 - - - Dated:- 3-6-2014 - N. Kumar AND B. Manohar, JJ. K.V. Aravind for the Appellant. A. Shankar and M. Lava, Advocates fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in these letters to show cause why the difference in creditors account should not be added as its income from undisclosed sources. The assessee sought for time because of various problems and things which required urgent attention of its creditors. The assessee had also offered to produce the creditors to prove the genuineness. It was made clear to the assessee that unless and until the assessee proves the genuineness of all these creditors to the extent of balances shown by it in its return of income along with the connected statements, the negative and adverse differences will be treated as its income of the year in addition to what is shown in the returns already filed. At this stage, the assessee engaged the services of a Chartered Accountant. After several adjournments and meetings, the assessee expressed its' inability to produce the parties or other definite and conclusive evidences to prove the transactions. It is clear from the order of the Assessing Authority that the parties had met Joint Commissioner of Income Tax, Range-I, Mangalore. As is clear from the order of the Commissioner of Income Tax (Appeals) (for short 'First Appellate Authority'), there was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed two revised returns out of his compulsion. The fact that two revised returns had to be furnished itself proves that there was guilty mind and the concealment was wilful. It is further held that the Assessing Officer had collected evidence during the course of survey regarding the genuineness of the expenses and during the course of assessment proceedings regarding genuineness of the creditors. Therefore he was of the view that initiation of penalty proceedings and the order passed by the Assessing Authority is proper and therefore declined to interfere with the said order. However, he gave a partial relief insofar as payment of interest is concerned. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. 5. The Tribunal on re-appreciation of the entire evidence on record held that the purchases have not been disputed by the Assessing Officer in his order. According to the assessee, the purchases were made on credit and subsequently the payments were made to the parties. Only with a view to buy peace from the department, since some of the creditors could not be produced before the Assessing Officer, the assessee was advised to write off the amounts in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that it is not a case of search and seizure and it is only a case of survey. No doubt, in the returns filed on 12-10-2004 the income was shown as ₹ 13,95,200/- and after survey, a revised return was filed showing the income of ₹ 30,45,200/- which is nothing but a difference in valuation of stock expenses and expenses on staff and coolies. No incriminating materials were found at the time of survey. However, to substantiate its defense, when the Assessing Authority called upon him to produce the creditors before them along with confirmation letters, the assessee was able to produce some of the creditors and also gave confirmation letters. Only in respect of six creditors who were not willing to come before the Assessing Officer and also give confirmation letters, the assessee was helpless. At that stage, negotiation took place between the assessee, Assessing Officer and his higher officers and on their advice, the assessee agreed to write off those creditors and offered it for tax. The bona fide of the assessee should be gathered from the facts that, not only he filed second revised return on 20-4-2005 showing the income of ₹ 1, 16,46,350/-, he promptly paid th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted is not automatic. Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net as opined by the Assessing Officer in the assessment. Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that the explanation offered is not bona fide, an order imposing penalty could be passed. If the explanation offered, even though not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to be computation of his total income have been disclosed by him, no penalty could be imposed. Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. The assessee should know the grounds which he has to me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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