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TMI Blog2016 (11) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... nded under section 133A(3)(ia) of the Income-tax Act, 1961. The survey resulted into undisclosed investment in purchase of agricultural lands and other properties, which was noticed and admitted by the directors of the appellant. It was noticed on perusal of the incriminating documents found at the site office of the company located at village Mehala District Jaipur, that these included loose papers having details in respect of purchase of agricultural lands and the actual purchase consideration paid. It, inter alia, was noticed on perusal of the loose papers that the purchase consideration was recorded at a lesser value than the actual value of the transaction. During the course of survey, statements of some of the persons, namely, Nagesh Bhaskar s/o. Chet Ram, and Ram Kishore Jat s/o Ram Lal Jat were recorded. The statements of Nagesh Bhaskar and Ram Kishore Jat were provided to Sunil Bansal, director, and thereafter statements of Sunil Bansal, one of the directors of the appellant, were recorded and the statements of Sunil Bansal were confirmed by Atma Ram Gupta and Vimal Singhvi the other two directors, wherein surrender was sought to be made of undisclosed investment and offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained investment under section 69B by the then learned Income-tax Officer have been rejected by the Hon'ble Commissioner of Income- tax (Appeals) Jaipur in his order dated October 16, 2008. (ii) The learned Assessing Officer's observation that the revised return filed by the assessee was not voluntary but as a result of survey operation, has also been rejected by the Hon'ble Commissioner of Income-tax (Appeals) Jaipur. After order of the learned Commissioner of Income-tax (Appeals), Jaipur there is no concealed income and no penalty can be imposed. You are therefore requested to kindly drop the penalty proceedings." However, the Assessing Officer vide order dated March 26, 2010, being not satisfied with the explanation offered, imposed a penalty of Rs. 1,01,76,653 under section 271(1)(c) of the Act. The Assessing Officer held that the surrender was not voluntary and it was only after the survey operation and after incriminating documents having been noticed and found and statements having been recorded, the assessee per force had to surrender and to file revised return. 6. The said penalty order was assailed before the Commissioner of Income-tax (Appeals), who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's premises. During the course of sur vey, various incriminating documents, including the purchase deed for purchase of agricultural land, were found. The statements of the employees were recorded. On the basis of those documents and statements, it was established that the assessee was recording the purchase of the land at a much lesser value than the actual purchase price. When these facts were confronted to the director of the company, he admitted to have made the cash payment for purchase of agricultural land which was not recorded in the books of account. He, with the help of those documents, prepared a detailed chart and worked out the unrecorded investment in the land by the assessee-company in three assessment years. The revised return was filed to include those unexplained investment in the purchase of agricultural land. Therefore, it is a case where the revised return is filed by the assessee after the detection of understatement of purchase price by the survey authorities. It is not a case where the revised return was furnished by the assessee voluntarily to buy peace with the Income-tax Department. In view of the above, in my opinion, the above decision of hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer was precluded from initiating the proceedings under section 271(1)(c) of the Act. He further contended that merely making of surrender in a peculiar situation and there being no documentary evidence on record to show payment of any "on money" or to suggest any unexplained investment in stock, and even the surrender was tax neutral as there was no tax when there was no sale, and there was no occasion for the assessee to have not disclosed the said amount. He further contended that there being difference of opinion between the Members of the Tribunal, substantial questions of law arise out of the order of the Tribunal as the order of the learned Third Member as also the Judicial Member is perverse. He relied upon the following judgments : T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC) ; CIT v. Anwar Ali [1970] 76 ITR 696 (SC) ; CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC) ; CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) ; CIT v. Punjab Tyres [1986] 162 ITR 517 (MP) ; CIT v. Suraj Bhan [2007] 294 ITR 481 (P&H) ; CIT v. S. Khader Khan Son [2013] 352 ITR 480 (SC) ; and Paul Mathews and Sons v. CIT [2003] 263 ITR 101 (Ker). 9. We have heard the learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 14,28,17,110 Rounded off 15 crore 10. Thus, taking into consideration the material on record and voluminous documents found during the course of survey, in our view, the statements and offering of income during the course of survey, cannot be said to be voluntary as it was clear cut admission by not only Sunil Bansal but other two directors as well, who were also present at the time of statements who took into consideration the categorical statements of the various persons/ associates of the assessee and the directors clearly admitting about the purchase through these key persons/associates. It is only when faced with the statements as also the unrecorded/recorded documents found at the business premises that the assessee came with a surrender. It is also appropriate to observe that though the statements offering surrender was made by Sunil Bansal coupled with the confirmation by the other two directors, during survey proceedings, but despite the same, the assessee chose not to file return immediately, however, it is only when a show- cause notice was again issued by the Assessing Officer on March 12, 2008 bringing it to the notice of the assessee about admission of surr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to uphold the findings of fact by all the three Authorities confirming the levy of penalty. Even otherwise, the breach of civil obligation which attracts a penalty under the provisions of an Act would immediately attract the levy of penalty, irrespective of the fact whether contravention was made by the defaulter with any guilty intention or not. A very heavy onus was placed on the assessee to explain the difference between the assessed income and returned income and the assessee did not discharge the said onus. In the light of the discussion made above and conduct of the assessee, it is thus clear that all the material facts and particulars relating to the assessee's computation of income were never disclosed by the assessee, and it is only as a result of survey that a clear picture came out on the surface. Admittedly, the statements of the persons or/and the three directors have never been retracted either during the assessment proceedings or during the penalty proceedings at any stage. 14. The Madras High Court in the case of Late M. S. Mohammed Marzook v. ITO [2006] 283 ITR 254 (Mad) held that in a case where original return was filed disclosing an income and consequent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as well as in the second return, he cannot escape the liability to penalty. 16. The Allahabad High Court in the case of Addl. CIT v. Radhey Shyam [1980] 123 ITR 125 (All), held that even filing of revised return is of no avail and benefit cannot be claimed by a person filing original return knowing it to be false and penalty was leviable on the basis of original return. 17. The apex court in a recent judgment in the case of MAK Data P. Ltd. v. CIT [2013] 358 ITR 593 (SC), had an occasion to consider a case where the original return was filed disclosing an income of Rs. 16,17,040 along with tax audit report, and during the course of assessment proceedings, the Assessing Officer noticed certain documents comprising share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income-tax returns and assessment orders and blank share transfer deeds duly signed, had been impounded. These documents had been found in the course of survey proceedings under section 133A conducted on December 16, 2003, in the case of one M/s. Marketing Services (a sister concern of the assessee). The Assessing Officer then proceeded to seek information from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad already stated that he had surrendered the additional sum of Rs. 40,74,000 with a view to avoid litigation, buy peace and to channelise the energy and resources towards productive work and to make amicable settlement with the Income-tax Department. The statute does not recognize these types of defences under Explanation 1 to section 271(1)(c) of the Act. It is trite law that voluntary disclosure does not release the appellant-assessee from the mischief of penal proceedings. Law does not provide that when an asses see makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. Holding so, the judgment of the Tribunal was set aside and the appeal filed by the Revenue was allowed. The apex court further observed as under (page 598 of 358 ITR) : "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 Assessing Officer 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. The Assessing Officer during the course of assessment proceedings has noticed that certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in unequivocal terms the undisclosed investment and detailing by way of separate annexures, the manner in which undisclosed investment was made year-wise. Therefore, the judgment of MAK Data P. Ltd. (supra) is squarely applicable. 19. Taking into consideration the above facts and circumstances, and particularly when voluminous documents and statements of various persons, as referred to hereinbefore, in our view it is a proved case of concealment of income and we are also of the view that penalty was rightly imposed by the Assessing Officer and has rightly been upheld by both the appellate authorities in unison based on evidence and is a finding of fact. 20. We may also deal with some of the case law cited by the learned counsel for appellant. 21. In the case of T. Ashok Pai v. CIT (supra) tax matters of the said assessee were looked after for a number of years by the law agency division of the Syndicate Bank, Manipal, which was authorised to file the returns of income before the tax authorities representing the assessee. On a return having been filed, the Revenue being dissatisfied called for better particulars of investments made by the said assessee whereupon a revised re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that section 133A does not empower any IT authority to examine any person on oath, hence any such statement has no evidentiary value and any admission made during such statement cannot, by itself, be made the basis for addition. This case is also inapplicable to the facts of the instant case because the assessee himself has accepted, surrendered and paid due taxes and has not denied the statements recorded under section 133A of the various persons. Rather the Directors of the assessee agreed on the statements in unison, which has been quoted extensively and even the surrender made by the assessee ultimately attained finality. 25. The other judgments are inapplicable on the facts of the instant case, therefore, having gone into the issue at length, we are of the view that the finding of fact recorded by the learned Judicial Member and learned Vice- President, as the Third Member of the Tribunal, is correct and the penalty was rightly imposed. No question of law, much less substantial question of law arise out of the order of the Tribunal as it is based on appreciation of evidence and is based on pure finding of fact. 26. Consequently, for the reasons aforesaid we do not find any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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