TMI Blog2003 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... al to refer the following questions of law under section 256(1) of the Income-tax Act, 1961, to this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law and facts in holding that mens rea cannot be attributed to the assessee? 2. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and fact in upholding the finding of the Commissioner of Income-tax (Appeals) that there was no intention to conceal the income and the omission to claim expenditure was unintentional error? 3. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and fact in holding that immunity should be granted in respect of Rs. 4,02,362? 4. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and fact in concurring with the finding of the Commissioner of Income-tax (Appeals) that it was due to oversight that the freight receipts lying in the hands of M/s. Nidhish Transport Corporation were omitted to be included in the accounts of the assessee as the income when it filed its return of income and in holding that the Commissioner of Income-tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced the total income to Rs. 60,74,170. The first appellate authority also upheld the rejection of the cash system of accounting adopted by the assessee in respect of its receipts. The assessee filed a further appeal before the Tribunal objecting to the rejection of the cash system of accounting. For taking the benefit under the amnesty scheme the assessee withdrew that appeal on February 28, 1986, and filed an amnesty return admitting a total income of Rs. 60,19,550. Subsequently, the assessee filed a revised return admitting the total income of Rs. 60,87,420. Reassessment order was passed on July 31, 1986, accepting the total income declared in the return stating that the assessee is entitled for immunity under the Voluntary Disclosure Scheme only in respect of Rs. 23,77,780, i.e., the amount disputed in appeal. In respect of other additions, the assessee is not entitled for the benefit of immunity under the Voluntary Disclosure Scheme. Penalty proceedings originally initiated were allowed to continue. The Income-tax Officer after obtaining the assessee's explanation levied penalty of Rs. 21 lakhs under section 271(1)(c) of the Income-tax Act. The assessee took up the matter b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Learned senior standing counsel for income-tax Sri P.K. Ravindranatha Menon, argued two cardinal points. Counsel submitted that the Income-tax Officer is justified in awarding penalty of Rs. 21 lakhs under section 271(1)(c). Counsel submitted in the light of Explanation 1, the explanation that could be taken note of or taken cognizance of by the authorities and the Tribunal in the explanation offered by the assessee during the course of assessment of income (quantum assessment). In the quantum assessment the assessee had no explanation to offer with reference to the concealed income subjected to penalty. Counsel pointed out that Rs. 15,88,204 and Rs. 7,32,917 were offered/admitted by the assessee and the assessee instead of offering an explanation for not returning the amounts offered the amount as per two letters as income to be assessed. Counsel submitted an admission or offer of amounts in the assessment or quantum assessment would justify a penalty especially in the light of Explanation 1. Counsel pointed out that in the light of clause (A) of Explanation 1 to section 271(1)(c) where in respect of any facts material to the computation of the total income such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stem. Any way counsel submitted clause (A) of Explanation 1 would not E apply as contended by the Revenue. Counsel also made a reference to the decision of this court in CIT v. A.M. Zainalabdeen Musaliar [2001] 250 ITR 534. Counsel also submitted that he is entitled to get full benefit of the amnesty scheme. Counsel submitted that the assessee is entitled to claim full benefit under the amnesty scheme through the reference application made by F the Department. Counsel also placed reliance on CIT v. V. Damodaran [1980] 121 ITR 572 (SC). We heard counsel on either side at length. We have also gone through the various circulars issued under the amnesty scheme and also examined the scope of section 271 of the Income-tax Act. We have also perused the decisions of this court in CIT v. K.P. Madhusudanan [2000] 246 ITR 218; CIT v. A. Sreenivasa Pai [2000] 242 ITR 29 and CIT v. Kishorekumar Shamji [2000] 244 ITR 702. We are in agreement with counsel appearing for the Revenue that the Commissioner of Income-tax (Appeals) or the Tribunal has not properly understood the scope of the said provision and not addressed the question in the right perspective. On going through the materials placed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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