I.T.A. No. 353 of 2009 (O&M) (1)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
I.T.A. No. 353 of 2009 (O&M)
DATE OF DECISION: 22.7.2009
Prempal Gandhi ..........Appellant
Versus
Commissioner of Income Tax-I, Aayakar ..........Respondent
Bhagwan, Jalandhar
CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MRS. JUSTICE DAYA CHAUDHARY
Present:- Mr. S.K. Mukhi, Advocate
for the appellant.
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ADARSH KUMAR GOEL, J. (Oral)
1. The assessee has preferred this appeal under Section 260A of
the Income Tax Act, 1961 (for short, “the Act”) against the order of Income
Tax Appellate Tribunal, Amritsar Bench, Amritsar dated 12.1.2009 passed
in ITA No. 383 (ASR)/2008 for the assessment year 1999-2000 , proposing
to raise following substantial questions of law:-
(i) “Whether, on the facts and circumstances of the case,
the Tribunal was justified in reversing the well versed
and speaking orders of the first appellate authority in
deleting the penalty so levied by the AO u/s 271(1)(c)
of the Income Tax Act, 1961?”
(ii)”Whether, on the facts and circumstances of the case,
the Tribunal was justified in reversing the well versed
and speaking orders of the first appellate authority by
holding that the revised return was filed after detection
of concealed income which is against the facts and
established principles of law that surrender/admission
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by filling revised return will not lead to concealment
wherein the surrender has been accepted as such
without making any further enquiries?”
(iii)”Whether, on the facts and circumstances of the
case, the Tribunal was justified in reversing the well
versed and speaking orders of the first appellate
authority by ignoring the established principles of law
as confirmed by Jurisdictional High Court as laid down
in the case of CIT Vs. Sudarshan Gupta, (2008) 10
DTR (P&H) 184 by holding that “The statement of
surrender has got to be accepted in toto or it has got
to be ignored?”
(iv)”Whether the order of the Tribunal is perverse and
against the provisions of law?”
2. The assessee derives income from property dealings. After
assessment was completed, it came to the notice of the Assessing Officer
that assessee had substantial transactions in bank which were not
disclosed. Proceedings were initiated for re-assessment. The assessee
filed revised return and offered the peak credits in the bank account and
interest thereon, with a condition that no penalty be imposed and he may
not be prosecuted. The Assessing Officer did not accept the conditions.
The Assessing Officer completed the assessment and also initiated
proceedings for penalty for the assessment years in question. After
following due procedure, penalty was imposed.
3. The CIT(A) accepted the plea of the assessee to the effect that
the assessee having filed higher return and surrendered the undisclosed
income, penalty was not leviable. Reliance was placed on the judgment of
Hon’ble Supreme Court in CIT Vs. Suresh Chandra Mittal 251 ITR 9.
4. The Tribunal reversed the view taken by the CIT(A) and
I.T.A. No. 353 of 2009 (O&M) (3)
maintained the order of penalty. It was observed:-
“We have heard both the parties and perused the
material placed on record. The question of concealment
of income or furnishing of inaccurate particulars of
income for the purpose of section 271(1)(c) of the
Income Tax Act, 1961 is to be determined with reference
to the original return. Even if the income is surrendered
in the revised return, the assessee still have to explain
why the income was not shown and why inaccurate
particulars of income were furnished in the original
return. In case of bonafide error or in case of technical
or venial breach of statutory provisions, the assessee
might not be held guilty of default u/s 271(1)(c) of the
Act, where the assessee has fully cooperated with the
Revenue authorities. On the other hand, when from the
very beginning, the assessee has intentionally
concealed income or furnished inaccurate particulars of
income, there is no question of assessee escaping
penalty on account of filling of revised return Blame-
worthiness attached to the assessee with reference to
the original return cannot be avoided by filling revised
return after concealment was detected by the Revenue
authorities. Where the concealment of Income made in
the original return or where the surrender of income
made was not voluntarily. But was as a result of
detection by the AO, filling of revised return of is no
consequence. Section 139(5) applies to limited
recourse of cases where in the original return, there was
any omission or any wrong statement and not to cases
I.T.A. No. 353 of 2009 (O&M) (4)
of concealment or false statement if a case does not fall
u/s 139(5) of the Act, the fact that revised’ return was
filed after any investigation was starred by the Income-
tax department will be of no consequence. In the
present case, admittedly, the assessee has not
disclosed the the impugned bank accounts where the
huge amounts were lying. There is no whisper about
these bank accounts in the original return. The
department detected these bank accounts and thereafter
issued notice u/s 148 of the Act.. After receipt of notice
u/s 148, the assessee filed the return and also filed a
letter that amount offered for taxation, no penalty
proceedings be initiated. In our opinion, the letter filed
by the assessee is of no consequence and that
surrender was made on detection of the bank accounts
by the department and it is not a voluntary disclosure.
Only because the assessee filed a letter stating that the
assessee offered additional income appearing in the
bank voluntary surrender. The assessee was forced to
surrender the income and the letter given by the
assessee that no penalty may be initiated was not
acceptable to the department and the AO has given a
letter to the assessee that he would not consider that
portion of the letter.” ……..
“7.1 But in the present case, the assessee has not
disclosed to impugned bank accounts to the department.
These accounts were disclosed by the assessee in the
revised return only after the detection by the department.
These accounts would not have been disclosed to the
I.T.A. No. 353 of 2009 (O&M) (5)
department, had the department not detected the same.
Further, in the case of K.P. Madhusudhanan Vs. CIT
251 ITR 99, (SC), it was held that it cannot be laid down
as a general prescription that no penalty can be levied
for agreed assessment; assessee having surrendered
the amount of unexplained credits for assessment
clearly admitting that entries were not recorded by him
on the correct dates and temporary loans obtained by
him were not recorded at all, he was liable to penalty u/s
271(1)(c) of Income Tax Act, read with explanation-1 of
the I.T. Act.
7.2 Further, in the present case, the assessee has not
been able to lead any evidence that the revised returns
were filed by the assessee merely the result of
inadvertent mistake of omissions. The assessee
furnished inaccurate particular of his income and also
concealed particulars of his income while filling the
original return and was not able to establish the
inadvertent mistake or omission in the original return,
when declared showing much larger income in the
revised return. Out view of this is supported by the
judgment of Hon’ble Supreme Court in the case of G.C.
Aggarwal Vs. CIT Assam, Nagaland, etc. 186 ITR 571,
where the Hon’ble Supreme Court confirmed the
judgment of Hon’ble Gauhati High Court in the case of
G.C. Agarwal Vs. CIT, Reported in 102 ITR 408.
7.3 Further, in the case of Rajesh Chawala Vs. CIT
reported in 203 CTR 209, the Hon’ble Punjab & Haryana
High Court has held that the assessee has filed the
I.T.A. No. 353 of 2009 (O&M) (6)
revised return surrendering the additional income only
on coming to know about the detection of concealment
by the department and that it is not a case of bona fide
voluntary disclosure, penalty u/s 271(1)(c) is leviable.
Hence, in our opinion, it is not possible to hold that in
every case mere surrender of income will foreclose any
action of concealment of income. The penalty is levied
on the basis of the relevant material and revised return
was filed on coming to know about the detection of the
concealment and the assessee cannot escape penalty
merely on the ground that he has surrendered the
impugned amount.”
5. We have heard learned counsel for the appellant.
6. The main contention raised by the learned counsel for the
appellant is that the assessee had plausible explanation to give and the
assessee having surrendered the income and no further enquiry having
been held, penalty was not justified.
7. Reliance has been placed on following judgments:-
(i) CIT Vs. Suresh Chandra Mittal (2001) 251 ITR 9
(SC)
(ii)CIT Vs. Kohinoor Impex P. Ltd., (2004) 270 ITR 381
(DEL)
(iii)CIT Vs. Beta Nepthol Ltd. 272 ITR 323
(iv)Dilip No. Shroff Vs. Joint CIT, 291 ITR 521
(v)T.Ashok Pai Vs. CIT, 292 ITR 11
(vi)CIT Vs. Rajnish Nath Aggarwal (2008) 8 DTR
(P&H) 253
(vii)CIT Vs. Shankerlal Nebhumal Uttamchandani
(2008) 4 DTR 238 (GUJ)
I.T.A. No. 353 of 2009 (O&M) (7)
(viii)CIT Vs. Oriental Power Cable Ltd., 9 DTR 309
(Raj)
(ix)CIT Vs. Smt. Sudershan Gupta 10 DTR 184 (P&H)
(x)CIT Vs. Rajiv Garg and others 18 DTR 152 (P&H)
(xi)CCE Vs. Adhunik Steels Ltd. 228 DTR 228 (P&H)
(xii)Harigopal Singh Vs. CIT 258 ITR 85 (P&H)
(xiii)CIT Vs. Union Electric Corporation 281 ITR 266
(GUJ)
(xiv)CIT Vs. Suraj Bhan 294 ITR 481 (P&H)
8. We do not find any merit in the contention raised. The
plausibility or otherwise the explanation of the assessee was a pure
question of fact. Admittedly, the assessee concealed transactions in the
bank account and when notice of re-assessment was issued, finding no
other way out, the assessee surrendered income, to avoid penal
consequences. In such a situation, it could not be held, as was held in the
cases relied upon, that the assessees wanted to buy peace of mind and
there was no evidence of concealment, which called for penalty. This is
not a case where penalty has been imposed only because assessee
disclosed higher income voluntarily but a case of clear concealment where
the assessee having found no other way out, was forced to surrender
undisclosed income. The judgments relied upon do not apply.
9. No substantial question of law arises. The appeal is dismissed.
(ADARSH KUMAR GOEL)
JUDGE
July 22, 2009 (DAYA CHAUDHARY)
pooja JUDGE
Note:-Whether this case is to be referred to the Reporter …….Yes/No
I.T.A. No. 353 of 2009 (O&M) (8)