TMI Blog1997 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... re April 1, 1989, on which date they were amended, will apply to the present cases, because the petitioners in both the cases have made the disclosure and applications for waiver of penalty before the said date. The relevant parts of unamended sections 271 and 273A are reproduced below : "271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Assessing Officer or the Deputy Commissioner (Appeals) or Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person-- (a) has failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or (b) has failed to comply with the notice under sub-section (1) of section 142 or sub-section (2) of section 143, or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 271." Full and true disclosure of income/particulars made voluntarily and in good faith by the assessee is a condition precedent for waiver of penalty under section 273A. The question as to what is the meaning of the word "voluntarily" is no more res integra. It has been decided by the courts from time to time in various cases. It is not necessary to cite all those cases in this judgment and it would be sufficient for our purpose to refer to and deal with the following cases only which represent the different shades of opinion. In Mool Chand Mahesh Chand v. CIT [1978] 115 ITR 1 (All), this court has held that disclosure made after the concealed income was detected and enquiry in connection therewith was being made, cannot be said to be voluntary. In Jakhodia Brothers v. CIT [1978] 115 ITR 61, this court held that even if the disclosure of income is made by the assessee during the pendency of the assessment proceedings, it can still be treated to have been made voluntarily, if it was made not due to any compulsion or any order passed by the competent authority. In Hakam S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the earlier cases decided by various courts, held that "voluntarily" means without compulsion. In this connection, the relevant extract from the said judgment is quoted below : "The expression 'voluntarily' means without compulsion. This view is again reiterated in S. R. Jadav Desai v. WTO [1980] 121 ITR 531 (Kar) by the same High Court. It may be that the action of an assessee in filing the return after the books of account had been seized during a raid was impelled by the compelling circumstances and a fear that the assessee will be likely to be dealt with under the penal provisions of the Act. But it cannot be said as a principle of law that all returns filed after search will cease to be voluntary returns and that it cannot be considered as a voluntary disclosure." The Kerala High Court in the said case also explained the decision of this court in Hakam Singh v. CIT [1980] 124 ITR 228 holding that this court has not laid down as a principle that the disclosure made after the search cannot be treated to be voluntary disclosure. The question as to whether the disclosure is or is not voluntary, has to be examined by the Department in each case. The relevant passage from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the search by itself will not be decisive of the fact that the returns and disclosures are not voluntary." The Bombay High Court in Natwarlal Joitram Raval v. CIT [1993] 115 CTR 518, after considering the case law on the issue including the aforementioned decisions of this court and the Kerala High Court, declared as follows : "We are inclined to agree with the Kerala High Court that in every case the Commissioner of Income-tax must, having regard to the search, seizure or statements, determine whether or not the disclosure subsequently made is or is not voluntary, but we are also inclined to agree with the Allahabad High Court that where a disclosure is made consequent upon seizure of incriminating material relevant to the particular assessment year, the disclosure is made because adverse consequences under the Act are attracted. Such a disclosure is not voluntary." The Bombay High Court held that the Department has to consider the facts and circumstances of each case in order to find out whether the disclosure made by the assessee subsequent to the search is or is not voluntary and the test for deciding such a question is whether "disclosure was made consequent upon s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment. But it cannot be held as a principle of law that the disclosure of income made after the search/raid cannot be voluntary. It is a question which has to be decided by the Department in each case on the basis of the material on the record. If on record there is incriminating material with regard to the disclosed income, the disclosure cannot be voluntary. But if the Department has no incriminating material with regard to the income disclosed, the disclosure is liable to be treated as voluntary having been made without any compulsion or constraint of exposure to adverse action by the Department. In a case where the assessee has disclosed not only the income regarding which the Department has incriminating material, but has also disclosed the income with regard to which no incriminating material was seized by the Department, the disclosure of the income with regard to which the Department has no incriminating material, is liable to be treated as voluntary. For example, if an assessee is having five accounts and the Department has incriminating material with regard to one of those accounts only, the disclosure of income relating to four accounts with regard to which the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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