9911796707
TMI Blog1998 (5) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as "the Act"). Pursuant to a scheme, the second appellant, firm, made an application on February 12, 1965, stating that they would place before the Income-tax Officer a true statement of their financial affairs and transactions and they were prepared to file a statement of the affairs as on March 31, 1965. The statement of affairs filed on May 20, 1965, disclosed an income of about Rs. 28,00,000 as the total accretion to its wealth over the eight years up to March 31, 1965. Ultimately, after some negotiations between the Department officials and the appellants, the appellants agreed to be assessed at Rs. 66,56,000 subject to the usual allowance for depreciation, etc., spread over eight assessment years 1958-59 to 1965-66. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on April 18, 1969, by the Commissioner pursuant to a letter received by him on April 14, 1969, making a further report on the matter. He set out the various details thereto as to how the matter had been dealt with by the various authorities and the manner in which the appellants would be entitled to the benefit under the provisions referred to earlier. The Central Board of Direct Taxes has to approve any action of the Commissioner to waive or reduce penalty in cases when the same is above Rs. 50,000. Hence, in this case reference was made by the Commissioner of Income-tax to the Board for approval of his action to reduce the penalty but the Board refused to reduce the penalty as suggested by the former. A writ petition was preferred before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned senior counsel, submitted that section 271(1) of the Act enables the Assessing Officer to impose penalty in three different sets of circumstances and in the present case, we are concerned with the exercise of power under clause (c) thereof which states that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. The provisions of section 271(4A) enable the Commissioner in his discretion to reduce or waive the amount of minimum penalty imposable under the provisions in cases falling under clause (e) of sub-section (1) also. Therefore, he submitted that merely because the case of an assessee attracted penalty under section 271(1)(c) of the Act that would not take away the discretion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all or not on the basis that in the circumstances of the case there was no deliberate concealment of income or furnishing of any inaccurate particulars of its income and, therefore, the Department had not discharged its burden. The Tribunal proceeded to hold that the Inspecting Assistant Commissioner had based his findings of concealment on the sole consideration that the assessee had itself returned and assessed the higher figures of income than those admitted in its returns originally. The Tribunal noticed that the argument addressed by learned counsel for the appellants that in such a case there was no concealment of income was very plausible, but in the circumstances of the case the concealment or furnishing of inaccurate particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ented really the income earned by the assessee during the aforesaid period. It was also noticed by the Tribunal that there was a confession made by the assessee voluntarily and earnestly that it had not returned the full income earned by it in those years and had come forward with a disclosure of its escaped income. The disclosure might not have revealed the full extent of the assessee's concealment as the assessee was also disclosing its activities over a period of time and expecting that the escaped income would be distributed over a period of ten years and would be avoiding penal actions and possibilities of investigations and searches with a further expectation of some concession in regard to payment of tax. The Tribunal concluded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Department could initiate any action in respect of the concealed income. The levy of penalty under section 271(1)(c) by itself will not be a circumstance to take him out of the purview of section 271(4A) of the Act. However, learned counsel for the Department submitted that in the present case the records disclose that the concealed income had not been disclosed voluntarily or in good faith prior to the initiation of the proceedings by the Department. If this contention is examined with reference to the findings recorded by the Tribunal to which we have made detailed reference, it becomes clear that the same cannot be accepted without further scrutiny of the matter. Whether such scrutiny had been made by the Board in this case is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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