TMI Blog1998 (2) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for all the assessment years there was a survey operation of the business premises of the assessee under s. 133A of the Act. The report and documents found during the course of survey according to the Department, revealed that the assessee was carrying on a money-lending business outside its book of account and the income from the said source was not disclosed in the original returns filed by the assessee for the said three assessment years. The assessee contended otherwise stating that the materials found during the survey did not reveal any such income from money-lending business. However, the assessee approached the CIT on 19th Sept., 1972, with a settlement petition, stating that he was carrying on money-lending business and lending money for the past three years and had not maintained any books of account for the money-lending business and the transactions were not accounted in the regular books of account in respect of the money-lending business carried on by him. The assessee thereafter requested the CIT to direct the ITO to settle the assessment suitably not only for the three-assessment years under consideration but also for the subsequent assessment years, namely, 1970 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount disclosed to the Department. He, therefore, held that but for the survey operation, the assessee would not have come forward with the disclosure petition, and only as a result of the information in the possession of the Department consequent on the survey operation the assessee came forward with the voluntary disclosure petition disclosing that the assessee had been doing money-lending business outside his books of account. The ITO, therefore, came to the conclusion that the assessee had concealed the income from money-lending business carried on by it in the original returns filed by it, and whatever may be the subsequent conduct of the assessee the return originally filed showed that the assessee filed the returns with the knowledge that they were false returns and levy of penalty was called for. The AO also invoked the provisions of Expln. to s. 271(1)(c) of the Act and held that the assessee had not discharged the onus cast upon the assessee and held that since the income from money-lending business was not disclosed in the original returns, the case called for the levy of penalty and he levied the maximum penalty for all the assessment years. 2. The assessee appealed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completion of the original assessment. The Tribunal, however, did not accept the contention urged on behalf of the Department as according to it for the asst. yr. 1970-71 for which the penalty was also cancelled by its earlier order, the original return was filed on 24th Jan., 1972, without disclosing the money-lending business and subsequent to the survey operation carried on by the ITO, the assessee filed the revised return voluntarily disclosing the income from the money-lending business. The Tribunal, therefore, came to the conclusion that the mere fact that the ITO had completed the original assessments land the assessee had filed the revised returns only after the original assessment would not better the position of the Department, and following its earlier order it cancelled the penalty and upheld the order of the CIT(A) and dismissed the appeal preferred by the Department. 4. On applications filed by the Department, the Tribunal stated a case and referred the following common question of law for all three assessment years under consideration under s. 256(1) of the Act for our consideration: "Whether the Tribunal was right in cancelling the penalties levied under s. 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward voluntarily to disclose the income from money-lending business and the difference in the factual circumstances was not noticed by the Tribunal. He also submitted that the ITO had invoked the provisions of the Explanation under s. 271(1)(c) of the Act and the assessee had not discharged the onus cast upon the assessee. He also submitted it is not a case of levy of penalty on the basis of the rejection of the assessee's explanation but it is a case where the transactions regarding money-lending business were neither accounted for in the regular books of account carried on by the assessee nor shown in the original returns submitted by the assessee. He also submitted the earlier decision of this Court in TC Nos. 1321 and 1324 of 1982, dt. 25th Jan., 1995 does not apply to the facts and circumstances of the case. The assessee was served on 13th March, 1992, in all the tax cases. But there was no representation on behalf of the assessee. 6. We have carefully considered the submissions of learned counsel for the Revenue and carefully perused the records. As a matter of fact it has to be recorded that learned counsel of the Revenue in a fair manner brought to our notice the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the income from money-lending business. Therefore, in view of the vital difference in facts between the two sets of assessment years, in question, the decision rendered by the Tribunal or by this Court for the subsequent assessment years cannot be applied to the factual situation prevalent for the asst. yrs. 1967-68 to 1969-70 for cancelling the penalty. The facts clearly show that the assessee had voluntarily admitted that there was income outside the books of account which were not accounted for in the original returns of income filed for the three assessment years. In more or less similar situation this Court considered the question of levy of penalty in the case of Addl. CIT vs. T.K. Perumalswamy (1986) 55 CTR (Mad) 439: (1984) 150 ITR 600 (Mad): TC 50R.869. In that case the Court was dealing with a case of levy of penalty for two asst. yrs. 1963-64 and 1964-65. Insofar as the asst. yr. 1963-64 was concerned, the assessee claimed that the art silk yarn imported by it from abroad under import permits were used in the manufacture of textiles in its own looms and the textiles so manufactured were sold on that basis. After the completion of the assessment, the assessee filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1963-64 would supply to the facts of this case. We are of the view that the Tribunal in the instant case had overlooked the fact that the penalty was directed against the assessee for having suppressed the income and concealed the income in the original returns wherein the assessee had not disclosed the income from money-lending business. The assessee's own showing and its admission that it was carrying on money-lending business and the income from which was not recorded in the original books for lungi business carried on by it called for the levy of penalty. The assessee's own showing after the filing of the original returns for the three assessment years would establish that there was a deliberate concealment of income and the case called for levy of penalty. 7. The decision of this Court in CIT vs. Krishna Co. (1979) 13 CTR (Mad) 24 (1979) 120 ITR 144 (Mad) : TC 50R.629 is also a case for levy of penalty and there the books of the assessee showed certain borrowings and repayments from certain bankers. The assessee therein produced the discharged hundis before the ITO and the ITO found that the bankers were not money-lenders but name lenders and when it was pointed out to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act of disclosure of income and the agreement to the addition of the income would show that the assessee had concealed the particulars of income and had furnished inaccurate particulars of its income. In the instant case, we are of the opinion the assessee had concealed and not disclosed the income from money-lending business. We are, therefore, of the view of the subsequent disclosure of the income in the voluntary disclosure petition would not improve the case of the assessee and it cannot be disputed that the assessee had not disclosed the income in the original returns filed on the basis of which the original assessments were completed. We are of the opinion that the Tribunal overlooked the important fact that the assessee had not disclosed the income in the original returns filed and the assessments were also completed and it is also not a case of voluntary disclosure of income during the course of assessment proceedings. We are of the opinion that where the assessee itself admitted that there was income from money-lending business which were not accounted for in the original returns filed and in the assessment proceedings before the completion of assessment, the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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