ORDER
T.J. Joice, A.M.
This appeal by the revenue has been preferred against the order of the learned Commissioner (Appeals) dated 19-3-1993, for the assessment year 1983-84 in which the first appellate authority has deleted the penalty levied under section 271(l)(c) amounting to Rs. 19,55,449.
2. For the assessment year 1983-84, the assessee filed return of income on 3-9-1983, disclosing loss -of Rs. 8,06,100. As per the assessment order under section 143(3) dated 17-3-1986, the assessed income comes to Rs. 24,59,210. The assessing officer found that the assessee- company wrote back royalty provision amounting to Rs. 38,08,844 in the accounts but it did not consider it as its income for taxation purpose claiming that the liability to pay had not ceased. There was another claim of deduction on account of excise duty to the extent of Rs. 7,73,964 out of which a disallowance was made amounting to Rs. 32,728 as the liability has not been raised during the previous year under consideration. The penalty order dated 30-9-1992, indicates that the assessing officer considered the claim of royalty amounting to Rs. 19,91,706 and claim of excise duty of Rs. 32,728 as having been concealed by the assessee or in respect of which inaccurate particulars have been furnished by the assessee and in this view of the matter, he has levied a penalty amounting to Rs. 19,55,449 being 150 per cent of the tax sought to be evaded on the concealed income.
3. When the matter came up before the learned Commissioner (Appeals), he considered the detailed arguments submitted before the assessing officer as well as during the appellate proceedings and found that the assessee had submitted all the relevant details in respect of the disputed items relating to royalty provision written back and claim of excise liability. The learned Commissioner (Appeals) has given a finding to the effect that the assessee has not held back any information or facts in respect of these two items during the assessment proceedings. The assessee made a claim for exemption in respect of royalty provision written back on the basis of legal opinion obtained from eminent lawyers. The disallowance of claim of excise duty was on purely technical ground. It was true that there was a difference of opinion between the assessee and the assessing officer but when the explanation offered by the assessee was bona fide, the assessee could not be charged with concealment of income. In reaching this conclusion, the learned Commissioner (Appeals) drew support from the decision of the Hon’ble Madras High Court in CIT v. Late G.D. Naidu (1986) 51 CTR (Mad) 256 .- (1986) 165 1TR 63 (Mad). The learned Commissioner (Appeals), therefore, deleted the penalty by stating that there was no contumacious conduct on the part of the assessee in claiming the exemption.
4. In appeal before us, the learned departmental Representative drew support from the order of the assessing officer and stated that the assessee has clearly misrepresented the facts before the assessing officer and the learned Commissioner (Appeals). He relied on various cases laws in CIT v. Bennet Colemen & Co. Ltd. (1993) 113 CTR (Born) 391 : (1993) 201 ITR 1021 (Bom), (1994) 211 ITR 9 (sic), CIT v. Agarpara Co. Ltd. (1985) 49 CTR (Pat) 356 : (1986) 158 TTR 78 (Cal), Swan Mills Ltd. v. CIT (1995) 1126 CTR (Bom) 113 : (1995) 215 ITR I (Bom). etc. The learned departmental Representative further submits that the question whether the assessee’s explanation was bona fide or not should be considered against the background of the assessee itself writing back the provision and treating it as income in the books of account, while at the same time claiming it as not income for taxation purpose,
4.1. On the other hand, the learned counsel for the assessee reiterated the submissions made before the assessing officer and the learned Commissioner (Appeals). It is pointed that the full facts relating to royalty written back amounting to Rs. 19,17,138 and excise duty of Rs. 3,20,778 were disclosed before the assessing officer during the assessment proceedings. The details regarding the royalty and the explanation regarding this have been given on p 3, item No. 4 of the statement of total income filed on 3-9-1983, and further explanation was submitted by the assessee’s letters dated 28-2-1986, 3-3-1986 and 11-3-1986. Opinions of legal experts were also obtained and the claim of exemption was made on the basis of the decision of the Hon’ble Bombay High Court in the case of Kohinoor Mills Co. Ltd. v. CIT (1963) 49 ITR 578 (Bom) and the Hon’ble Gujarat High Court in Ambica Mills Ltd. v. CTT (1954) 54 1TR 167 (Guj). As regards the excise duty, this matter has been explained on p. 3, note No. 3 of the statement of total income filed along with the return of income on 3-9-1983. Pages 163 to 169 of the paper-book filed with the return of income also represented demand notices received from the Excise department with necessary details, The learned counsel, therefore, pleads that the assessee has submitted the full details relating to the disputed items and submitted necessary further details as and when called for by the assessing officer during the course of assessment proceedings, Reliance is also placed on the proviso to Expln. I to section 271(l)(c) as well as the Departmental Circular No. 204 dated 24-7-1976, Further, the assessee’s counsel relied on the following case laws in support of the plea that penalty under S. 271(l)(c) is not leviable merely on disallowance of claim of expenditure:
(i) CIT v. Shivlal Desai & Sons 1977 CTR (Bom) 801 : (1978) 114 ITR 377 (Bom);
(ii) CIT v. Nepani Biri Co. Trust (1991) 190 ITR 402 (All);
(iii) CIT v. University Printers (1991) 188 ITR 206 (All);
(iv) Narendra Kumar Rajendrakumar Jain v. CIT (1988) 74 CTR (MP) 124 : (1988) 174 ITR 479 (MP);
(v) CIT v. Anand Water Meter Mfg. Co. (1979) 117 ITR 866 (P&H); and
(vi) CIT v. Bengal Iron Galvanising Works (1987) 61 CTR (Cal) 226 : (1987) 166 ITR 249 (Cal).
5. We have considered the rival submissions and the evidence on record. We have also carefully studied the reported case laws cited on behalf of revenue as well as the assessee. The question to be considered is whether the assessee has concealed the particulars of income or furnished inaccurate particulars of such income within the meaning of section 271(l)(c) so as to be visited with penalty under the said section. On going through the records of the case, we find that along with the return of income, the assessee filed a statement of total income giving the details of computation of total income. Note Nos. 3 & 4 in the statement of total income relate to the claim of excise duty and royalty provision respectively. These notes are further supported by detailed explanation as submitted by the learned counsel for the assessee and as mentioned by us in the foregoing para. It is clear that the assessee submitted the full details relating to the disputed items and also an explanation as to why a claim of exemption was made at the time of filing the return of income itself. Therefore, it could not be concluded that the assessee has concealed the particulars of income or furnished inaccurate particulars of such income while filing the return of income. After all a return form is a legal format in which certain columns have to be filled up within the spaces provided and these spaces are just sufficient for filing up figures and also short answers in words to certain questions. A return form by itself does not clearly reflect the statement of affairs relating to the total income of an assessee unless it is supplemented by supporting statement. When the assessing officer proceeds to make an assessment, he has to consider the return of income not in isolation but it has to be seen along with the statements accompanying the return. In the circumstances, we fully endorse the view taken by the learned Commissioner (Appeals) that the assessee did not hold back any material fact or information relating to the claim of exemption made by the assessee while filing the return of income. Therefore, the primary ingredient of the alleged default under section 271(1)(c) is lacking in this case, Therefore, penalty provisions are not at all attracted. The assessing officer has clearly erred in law in levying the penalty. The learned Commissioner (Appeals) is justified in his conclusion to the effect that the assessee-company could not be charged with contumacious conduct because the explanation offered by it was bona fide. The mere fact that there was a difference of opinion between the assessee and the assessing officer in course of assessment proceedings should not lead to the levy of penalty. The assessing officer has proceeded to impose the penalty in a routine and mechanical manner without applying a judicious approach during the penalty proceedings. In this view of the matter, we hold that the impugned order of the learned Commissioner (Appeals) does not call for any interference.
6. In the result, the order of the learned Commissioner (Appeals) is upheld and the appeal is dismissed.