TMI Blog2006 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... r the submission of the revised return, on March 7, 1986, the assessee submitted the revised return and on March 18, he filed the reply to the notice to show cause and prior thereto, he had submitted his explanation on March 10, 1986. It is to be seen from the assessment order wherein the Assessing Officer has observed that prior to submission of the revised return, in letter dated March 30, 1986, the assessee explained the reasons as to why he disclosed the income. The Assessing Officer accepted the said contention and computed the income as per the revised return, but, that does not mean that the concealment was not detected. Thus, we are of the opinion that the subordinate Tribunals were not unjustified in initiating the penalty proceedings u/s 271(1)(c) of the Act and imposing the penalty. The question is answered against the interest of the assessee and in favour of the Revenue. The reference is disposed of with costs payable by the assessee to the Revenue. - HON'BLE R. S. GARG., M. R. SHAH, JJ. For the Appellant : S.N. Divetia, Adv. For the Respondent : B.B. Naik, Adv. JUDGMENT R. S. GARG J. 1. The Income-tax Appellate Tribunal, Ahmedabad Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions made by the assessee, the assessee made an application under section 256(1) of the Act for a reference to the High Court. Accordingly, on the aforesaid question, the reference has been made. 3. Mr. Divetia, learned counsel for the assessee, submits that from Circular No. 450, dated February 13, 1986, issued by the Central Board of Direct Taxes, it would clearly appear that the Government wanted to realise maximum tax and therefore, it provided certain benefits and protection to the assessees if they were to file the revised returns or were to disclose their income honestly. Referring to Circular No. 451, dated February 17, 1986, specially, to questions Nos. 4, 19 and 30, it was submitted that the explanations offered by the Central Board of Direct Taxes in the said circular, would provide a solace to the assessee and the penalty proceedings deserve to be quashed. 4. On the other hand, Mr. B. B. Naik, learned counsel for the Revenue, submits that a fair understanding of Circular Nos. 450 and 451 would make it clear that protection is provided to an honest taxpayer or to a person who voluntary comes up for making the payment of the tax, and not to a person who, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply to question No. 3D, the Central Board of Direct Taxes simply said that the assessee could make a declaration in respect of assets or income which was not the subject matter of seizure if it has not been already found out in the course of search. Thrust of the Central Board of Direct Taxes was that the facts have not been detected nor suppression has been detected nor some material has been brought on record, the assessee would be entitled to make a declaration in respect of the assets or income, which is not the subject matter of seizure if it has not been already found in the course of search. Question No. 30, in fact, related to search, while question No. 19 related to interpretation of the words before detection by the Department . 6. A perusal of the notice dated February 24, 1986, would show that the Assessing Officer had already detected concealment of the income. He had made the following observations: on scrutiny of squared up accounts and details filed by you it is noticed that following new deposits have been received and paid back by you during the accounting year itself . He also observed that, detailed scrutiny of the above data makes it crystal clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. One must not forget that detection of the fact and determination of the fact stand on different pedestals. The detection may lead to certain proceedings and the determination would amount to a finding. In the present case, the Income-tax Officer had already detected concealment of the income, but, before determining the amount finally, he issued a notice to show cause to the assessee to prove the genuineness of the alleged transactions. The detection led to the notice and the service of the notice led to the filing of the revised return, the revised return led to the determination. Therefore, the detection cannot be put at par with the determination. 11. Mr. Divetia, learned counsel for the assessee, placed his strong reliance upon a judgment of the Calcutta High Court reported in the matter of Anand Kumar Saraf v. CIT [1995] 211 ITR 562. In the said matter, a search was conducted in the assessee s premises; before the scrutiny of the documents so seized by the authorities, the revised return disclosing his income and wealth, was filed and payment of tax was made in time. The High Court found that the assessee was entitled to the benefits of amnesty scheme. On page 574 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing its reliance upon the dictionary meaning of the word detect , observed that the word detect would mean to discover the true especially hidden or disguised character or would mean to discover or determine the existence, presence or fact . If the very same dictionary meaning is applied to the facts of the present case, it would clearly appear that much before issuing the notice to show cause to the assessee, the facts were already detected. Hidden or disguised character of the income was already discovered and the Department had already discovered or detected the existence and presence of a particular fact. The Assessing Officer had already held even before issuing the notice that the return was not reflecting the income correctly and there was concealment. On a perusal of the notice to show cause, it would clearly appear that the Assessing Officer had already decided the question that there was concealment of the income, but, before the final determination, he wanted to give an opportunity to the assessee to satisfy the authority in relation to the genuineness of the said entries. Acceptance of the revised return without much ado would not mean that the Department had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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