TMI Blog2009 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that levy of penalty under section 27(1)(c) of the Income-tax Act, 1961, was justified in law ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming levy of penalty on the appellant inspite of the finding given by the assessing officer in the assessment proceedings that nothing specific was found by the Assessing Officer and whether the said finding can be regarded as "casual remarks" made by the Assessing Officer? 3. Whether, on the facts and in the circumstances of the case, the finding of the Income-tax Appellate Tribunal that the appellant was liable to levy of penalty on the disclosed income is borne out of record and contrary to evidence?" 2. The Assessment Years in question are 1985-86, 1986-87 and 1987-88. The respective accounting periods are years ended on 30.06.1984, 30.06.1985 and 30.06.1987. The assessee, a Private Limited Company was assessed on total income of Rs. 34,75,190/- on 28.5.1986 under section 143(3) of the Act for Assessment Year 1985-86. Similarly, the assessment was completed on 3.6.1987 at a total income of Rs.56,14,730/- for Assessment Year 1986-87. For Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was 100% of the concealed income. It is this order of the Tribunal dated 31.3.1997, which is under challenge in the present Reference. 5. Mr. S.N.Soparkar, learned Senior Advocate appearing for the applicant-assessee assailed the impugned order of Tribunal and submitted that the Tribunal had failed to appreciate the facts in the right perspective. That the revised returns filed by the assessee were voluntary in nature and the assessee was under a bona fide impression that no penalty proceedings would be initiated considering the fact that the assessee had made an application under section 273A of the Act before filing the revised returns. It was further submitted that Revenue was not in possession of any concrete evidence against the assessee to establish concealment of any income. Various purchases made by the petitioner from International Steel Corporation, Shreeji Corporation, Narendra Brothers and Navnit Pipe and Steel Traders were all genuine purchases but the assessee chose to declare the value of such purchases as income only to avoid long drawn litigation considering the fact that the stand of the first supplier, viz. International Steel Corporation was inconsis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ror apparent on record, the Tribunal was duty bound to rectify the same. The Tribunal having failed to do so, the order at least for Assessment Year 1985-86 was contrary to the evidence on record and thus perverse. 5.3. Referring to order dated 31.3.1997 made by the Tribunal in Misc. Application No. 65/Ahd/97, it was submitted that even while passing the said order, the Tribunal had glossed over the error pointed out by merely stating that all the arguments advanced by the assessee's Counsel had been noted without actually dealing with the grievance of the assessee that the alternative contention was not considered and not dealt with. The learned Counsel therefore submitted that in light of principles laid down by the Apex Court in the case of Omar Salay Mohamed Sait Vs. CIT, (1959) 37 ITR 151 the matter was required to be restored to the file of the Tribunal without entering into the merits of the controversy. 5.4. In support of various submissions made, the learned Counsel placed reliance on following decisions : [1] CIT Vs. Manibhai And Bros. [2007] 294 ITR 501 (Guj) [2] CIT Vs. Suresh Chandra Mittal, (2001) 251 ITR 9 (SC). [3] CIT Vs. Suresh Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- followed by further revision to the extent of Rs.78,56,613/- and Rs. 18 lacs in each of the Assessment Years 1986-87 and 1987-88 could not be termed to be voluntary so as to exonerate the assessee from charge of concealment. 7. The facts are not in dispute. Deputy Director of Income-tax(Investigation), Bombay (DDIT) (Inv.) had undertaken survey action some time in September, 1988 and on verification of certain purchases made by the assessee it was found that the said purchases did not appear to be genuine. The statement of Chairman and Managing Director of assessee Company was recorded on 21.9.1988. Before the said proceedings could be finally concluded the assessee filed a declaration under section 273A of the Act disclosing additional income of Rs.54,71,463/- as being relatable to Assessment Year 1985-86. On the same day, declaration was also made of a sum of Rs. 18 lacs each for Assessment Years 1986-87, 1987-88 and 1988-89. This application under section 273A of the Act was followed by revised returns filed on 14.2.1989 for all the three Assessment Years declaring identical additional income in the revised returns. Before assessments could be finalised, after regularisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of Rs.54 lacs in round figure being divided into three segments of Rs.18 lacs each for Assessment Years 1986-87, 1987-88 and 1988-89. Therefore, it is not possible to agree with the submission made on behalf of the assessee that the revised returns filed on 14.2.1989 for all the three years were voluntary in nature. This fact has to be appreciated in the context of filing of further revised return by way of letter dated 30.3.1990 declaring a sum of Rs.78,56,613/- which came about as a consequence of follow-up proceedings undertaken by DDIT, Surat in relation to other three suppliers viz. Shreeji Corporation, Narendra Brothers and Navnit Pipe And Steel Traders. Therefore, the assessee cannot be stated to have voluntarily come forward to disclose income which had unintentionally been omitted from the original return of income. 9. The law on the subject of treating a revised return of income as voluntary or otherwise is well settled. Merely because a return is revised that fact by itself cannot lead to any presumption as to concealment in the original return of income, because legislature itself has provided for furnishing a revised return in case of any omission in the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and terserely rejected the said contention. But that by itself cannot be of any help to the assessee. 12. The earlier part of the very same paragraph in which the sentence appears on which reliance has been placed by the assessee, indicates that by principle of incorporation findings in relation to the conduct of the assessee as recorded in assessment order for Assessment Year 1985-86 have been made part and parcel of the subsequent assessment orders instead of repeating the same, and therefore it is not possible to accept the contention that nothing adverse had been observed by the Assessing Officer. The said finding has to be appreciated in the context of the fact that the declaration made by the assessee on 20.10.1988 in relation to the first Assessment Year viz. 1985-86 was in exact figures being sum of Rs.54,71,463/-, whereas for the subsequent three assessment years the declaration was in round figures of Rs.18 lacs each. This is also reflected by the figures incorporated in the revised returns for all the three assessment years filed on 14.2.1989. Therefore, when the Assessing Officer observed that nothing specific was found by the Assessing Officer, the same had to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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