Decided on October 11,1994



Manzoor Ahmed Bakshi, Judicial Member - (1.) THE appellant is a private limited company. Its appeal is against the decision of the CIT (Appeals) XIV, New Delhi and it relates to the levy of penalty under Section 271(1)(c) of the Income-tax Act of Rs. 9,77,100 for assessment year 1986-87.
(2.) We have heard the learned counsel for the assessee, Shri G.C. Sharma and the learned Departmental Representative, Shri D.D. Goyel and have perused the records. The salient facts are that the assessee filed its return of income for assessment year 1986-87 for which the previous year ended on 30-6-1985 on 17-9-1986 declaring income of Rs. 15,700. On 19-11-1987 there was a survey in the premises of the assessee. Statement of the Accountant of the assessee-company, Shri Mehta had been recorded during survey operations. Statement of the Director of the company had also been recorded after the survey. On 9-12-1987, assessee filed a revised return declaring income of Rs. 15,66,620 which included income of Rs. 15,50,000 as income from other sources. Assessing Officer, during the course of assessment proceedings, which were taken up after the filing of a revised return, asked the assessee to explain the source of accretion in the share capital of Rs. 24,50,000. Assessee explained the sources as under :- JUDGEMENT_2700_TLIT0_19940.htm Out of Rs. 9,00,000 assessee could furnish proof of disclosure in respect of Rs. 8,99,000 only. The difference of Rs. 1,000 was thus added by the Assessing Officer as income from undisclosed sources. The sum of Rs. 15,50.000 was also assessed as income from other sources as declared by the assessee. Assessment was made vide order dated 17-2-1988 at an income of Rs. 15,72,400. In the assessment order Assessing Officer recorded that penalty proceedings under Sections 271 (1)(a), 271 (1)(c) and 273(1)(b) of the Act had been initiated separately. Assessing Officer had issued penalty notices to the assessee to show cause as to why penalty be not imposed for concealment of income or/and furnishing of inaccurate particulars of income. Assessee had requested to keep the proceedings in abeyance till the decision of the Commissioner of Income-tax in a petition filed under Section 273A for waiver of penalty. This request of the assessee was not accepted. The Assessing Officer accordingly proceeded to impose a penalty of Rs. 9,77,100 in respect of Rs. 15,50,000 disclosed by the assessee voluntarily as income from other sources as also in respect of Rs. 1,000 added by the Assessing Officer as income from undisclosed sources.
(3.) ASSESSEE appealed to the Commissioner of Income-tax (Appeals) claiming that revised return was filed voluntarily and that there was no concealment of income. Learned CIT (Appeals) has held that since the revised return has been filed by the assessee following the survey operations, the same cannot be said to have been filed to rectify any grievious omission or mistake in the original return and that it could not thus be a revised return. ASSESSEE had relied on the decision of the Calcutta High Court in the case of CIT v. Bengal Iron Galvanising Works [1987] 165 ITR 249 in support of the contention that where assessee makes a voluntary disclosure before any inquiry or investigation had been initiated by the revenue penalty for concealment is not warranted. The CIT (Appeals) has held that this case was inapplicable to the facts of the assessee's case as revised return was filed by the appellant after the survey operations were conducted in its business premises. The learned CIT (Appeals) has further held that merely because in the assessment order the Assessing Officer has failed to discuss the matter in length to conclude that the appellant had concealed particulars of its income during the year, is not sufficient ground for deleting the penalty imposed under Section 27l(1)(c). The learned CIT (Appeals) has further held that the assessee had concealed the income and no attempt was made to give any explanation to rebut the presumption. Penalty imposed by the Assessing Officer has thus been confirmed.;

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