TMI Blog1994 (3) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... hout making any further addition thereto. However, penalty proceedings under section 271(1)(c) were initiated during the course of the assessments on account of huge differences in the figures of income as per the assessments and as shown in the original returns of income. In the assessment orders passed by him, the Assessing Officer took note of certain cash credits and other expenses which had been claimed as allowable in the original returns but ultimately, surrendered as income in the revised returns, although however, he did not go to detail out such cash credits or expenses in the penalty orders. Such details had not even been discussed in the respective assessment orders. The Assessing Officer thereafter stated that for the purpose of levy of penalty the basis is the amount of tax sought to be evaded which is required to be worked out on the basis of tax on the returned income and the tax on assessed income. By considering the originally filed returns to contain the figures of returned income only, he calculated the basis and accordingly levied penalties for each of the three years. 3. In the appeals filed before her, the CIT(A) also virtually repeated the points as taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, 5-12-1988 and 28-12-1988 respectively. The learned counsel for the assessee has drawn our attention to the detailed discussions made by the Assessing Officer in this regard in the assessment orders passed by him. The said discussions detail out the circumstances in which the revised returns were filed. He also pointed out that in fact, the survey conducted by the Department was not able to discover any new thing or gross irregularities and discrepancies in the accounts of the assessee. He stated that, on the other hand, on the basis of the audit conducted by the new auditor of the assessee-firm, the figures of income were revised by readjusting the different accounts. It has been contended that this was done by the assessee suo motu, and without any pressure from the Department. 6. Shri Pradeep, counsel for the assessee, firstly assails the imposition of penalties on the ground that neither in the assessment orders nor in the penalty orders, the Assessing Officer took care to detail out the amounts alleged to have been concealed. He argued that, on the other hand, the Assessing Officer took into consideration the entire difference between the figures as per the original and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by both the sides. We are making mention of the same and are also making short discussions on the issues decided in those cases only which we consider to be relevant to the present issue. 8.1 In the case of CIT v. Shree Bajrang Trading Supply Co. [1991] 187 ITR 299, as decided by the Calcutta High Court, the very old maxim relating to imposition of penalty for concealment was repeated. This maxim is that apart from disbelieving the explanation furnished by the assessee, it will be necessary for the Department to prove the concealment of income by the assessee separately from the discussions made in the assessment order. 8.2 In the case of CIT v. J.K.A. Rajappa Chettiar [1985] 153 ITR 215, as decided by the Madras High Court and it was decided that the pertinent enquiry under section 271(1)(c) was not whether the return was true or false, but whether the assessee, in the course of any assessment proceedings, had concealed particulars of his income. The High Court held that since in that particular case, the ITO had not initiated any enquiry for assessment on the basis of the original returns and the assessment proceedings were only on the basis of the revised returns and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted that any income had been concealed or inaccurate particulars had been furnished deliberately. The Supreme Court held that from the assessee agreeing to additions to his income, it does not follow that the amount agreed to be added was concealed income inasmuch as there may be a hundred and one reasons for such admissions, i.e., when the assessee realises the true position, it does not dispute certain disallowances but that does not absolve the Revenue from proving the mens rea of quasi-criminal offence. 11. The learned DR, on the other hand, has strongly argued that in all the departmental orders, due reference was made to the survey conducted by the Department and, hence, the revised returns must be considered to have been filed as a consequence to the survey. He further stated that many expenses had been inflated in the original return and that they were corrected in the revised returns. He thus argued that concealment in the original returns of income was very obvious. The learned DR relied on the decision of the Supreme Court in the case of G. C. Agarwal v. CIT [1990] 186 ITR 571 in which the earlier decision of the Gauhati High Court in the case of F.C. Agarwal v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the figures of income disclosed in the original returns were based on the unaudited accounts. Although the assessee was liable to get its accounts audited in accordance with the provisions of section 44AB, it was not possible for the assessee to do so initially on account of certain factors which have been discussed by us above. Later on, however, the assessee appointed another auditor and with his help, was able to get its accounts duly audited as per the requirement of the statute. The revised returns were filed showing new figures of income after only the said audit was completed. Although in between, the Department conducted a survey under section 133A, there is nothing on record to show that the survey actually discovered any thing incriminating on the part of the assessee. No possession of unexplained assets or duplicate sets of books of account was detected during the survey, There is no discussion anywhere in the assessment orders that the Department was able to get some fresh information about the business of the assessee or detect the discrepancies in the accounts already filed by the assessee, during the course of the survey. The assessee only could know about its lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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