TMI Blog1993 (10) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... was allowed under section 35CCA on the basis of two receipts bearing No. 124 and 125 dated 28-3-84 which has been evidenced vide pages 16 and 17 of the paper book by the assessee. The D.D. has been evidenced at pages 14 and 15. 3. Subsequently assessee filed a revised income return purported to be under Amnesty Scheme which included donation to Christian Medical College and Hospital Trust which was earlier claimed and allowed u/s 35CCA. The same has been evidenced at page 6 of the paper book. 4. In the meanwhile it came to the knowledge of the department that the assessee's claim of Rs. 10,00,000 was not genuine, patently fraudulent and it was discovered that the so-called donation was encashed through a spurious bank account in Bombay. According to the department, it received letter bearing No. GS: 60:2:86, dated 4-7-1986 from Shri D.S. Aruldas, General Superintendent, Christian Medical College and Hospital, Vellore on the basis of the enquiry made by the department. This letter made clear the following facts: (i) that the accounts of the Christian Medical College and Hospital are opened in the name of "Christian Medical College Vellore Association" only; (ii) that they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source of information that the money paid in favour of the trust did not reach the trust. Assessee was required to furnish details on or before 3-12-87. Assessee has not replied to these queries at all. A letter was filed by the assessee on 21-12-87 with enclosure letter dated 18-12-87. However this, according to the department did not answer to the specific queries made. Accordingly another letter dated 14-1-88 was also issued. To this letter assessee through the Chartered Accountant submitted that assessee has nothing further to submit other than what was already submitted by their letter dated 18-12-87. 8. Assessee along with his letter dated 18-12-87 produced zerox copies of two receipts dated 28-3-84 and 29-3-84 which was issued by Christian Medical College Hospital, Vellore. This, as per the letter of General Supdt., Christain Medical College Hospital, Vellore is bogus one, because all the accounts are operated only in the name of Christian Medical College Vellore Association. On the basis of the fact that the assessee has not replied to the queries by the department the ITO came to the conclusion that the revised return filed by the assessee under Amnesty Scheme shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35CCA on alleged donation of Rs. 10 lakhs to the Christian Medical College Hospital, Vellore. It was under these circumstances and on the above facts that the AO initiated penalty proceedings for default under section 271(1)(c). Aggrieved by the above order the assessee appealed before the first appellate authority. 9. The only ground agitated before the CIT (A) by the assessee as per the appellate order was that 'the ld. ITO was not justified in initiating the penalty proceedings'. On a query, as to why the initiation of penalty proceedings by itself should be treated as a grievance appealable, the assessee replied that the real grievance of the assessee, in the facts and circumstances of the case, is that the ITO did not follow the instruction, which forbid him from initiation of penalty proceedings when the return is filed under Amnesty Scheme, in view of Circular No. 451 of 17-2-86. The said circular has been reproduced in the order of the ld. CIT(A). It is addressed to Bombay Chartered Accountants' Society, Churchgate, Bombay written by Chief Public Relations Officer, IT Department, Bombay in the form of a clarification issued by Chief Public Relations Officer, Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India on 30-9-86; whereas the department came into possession the letter from Shri D.S. Aruldas, General Supdt., Christian Medical College and Hospital, Vellore on 4-7-86. When department came into possession of this specific reply the department detected the concealment. If the assessee filed the returns before receipt of this letter from the General Supdt., it would have been possible for the assessee to put up a case that the department has only formed a "prima facie belief" that the assessee has concealed income. Further the ld. D. R. pointed out that the assessee has not cared to answer the queries made by the department. So assessee has not made disclosure 'voluntarily' and in 'good faith'. This is so, because if the assessee filed revised return in good faith the assessee should be co-operative and would have answered the queries specifically put forth by the department. The assessee in spite of answering the queries, kept silent on these important facts. Thus by no dint of imagination it could be said that the assessee filed the returns voluntarily and in good faith. There is no full and true disclosure of income by the assessee. Thus he contended that the order of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to entertain assessee's appeal on Amnesty Scheme and to examine his claim with reference to the conditions laid down by the Board circular and orders issued under section 119 of the Act from time to time and to dispose of all the appeals afresh after affording adequate opportunity of being heard to the parties concerned. 15. We have heard the rival submissions and gone through the order of the revenue authorities and the case laws cited by the contending parties. On a careful consideration we are of the view, in this case the department is to succeed on point of law and on facts. The assessee filed revised returns on 30-9-86. Before that date, the department came into possession of letter dated 4-7-86 from D.S. Aruldas, General Supdt., Christian Medical College Hospital, Vellore. This letter evidently was written as a reply to queries made by the department. A perusal of ITO's order, para 1 will make it abundantly clear that the department was aware that the assessee has made donation to some parties other than the genuine party. Para 4 of the assessment order also makes it clear that the assessee avoided disclosing the identity of the persons who approached the assessee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r be not available to the assessee in appellate proceedings, that is by itself the issue of Amnesty Scheme cannot be agitated on involved in appeal. We, therefore, hold that the relief under the Amnesty Scheme can be claimed and agitated in appeal in the circumstances of the case. We are fortified in the view of the matter by the decision of the Madhya Pradesh High Court in the case of Jalkishan Gopikishan and Sons and others vs. CIT (A) wherein the order of the CIT (A) refusing to consider the case of the assessee under the Voluntary Disclosure Scheme was quashed by holding that the CIT (A) was not right in not considering the merits of the case of the assessee under the Voluntary Disclosure Scheme. In this reported case also, it was held that the various circulars issued by the Central Board of Direct Taxes in exercise of its powers under section 119 of the Act have the force of law and are binding on the subordinate authorities. The Court further observed that guidelines are issued from time to time to deal with the case of such assessee who claim immunity and consideration of their cases leniently and sympathetically and the authorities are bound to deal with the cases, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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