- (1.) The subject matter of challenge in the appeal is a judgment and order dated 18th January, 2008 pertaining to the Assessment Year 2003-04 and Assessment Year 2004-05 by which the learned Tribunal agreeing with the CIT (Appeals) dismissed the appeal preferred by Revenue. Aggrieved by the order revenue has come up in appeal. The following question of law was formulated at the time of admission of the appeal registered as ITA 678 of 2008:- " Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in confirming the Commissioner of Income Tax (Appeals) order deleting the penalty of Rs. 22,95,000/- levied by the Assessing Officer under Section 271(1(c ) of the Income Tax Act, 1961 in relation to the Assessment Year 2004-05 ? "
(2.) The facts and circumstances of the case briefly stated are as follows:- The assessment order dated 19th May, 2006 in so far as the same is material for our purpose reads as follows:- " In the case the assessment u/s.143(3) of the I.T. Act was completed on 28.12.2005 to a total income of Rs. 5,91,48,819/- and tax was charged u/s 115JB of the I.T. Act. On 3rd April 2006 the assessee filed a revised return showing a total income of Rs. 9,63,48,819/- under Normal Provisions of the Act. However Book-Profit was shown at Rs. 65,49,20,882/- u/s 115 JB of the Act. On scrutiny of the said return it was observed that assessee had disclosed additional amount of Rs. 3,40,00,000/-. The assessment was, thus, reopened u/s147 and notice u/s 148 was issued on 18.04.06 and served on the assessee. The assessee replied on 22nd April, 2006 to consider the return filed on 03.04.2006 as return filed u/s 148. A notice u/s.143(2) was issued and served on 10.05.06. In response, Mr. Ravi Tulsyan, A/R of the assessee appeared on 15.05.06. The case was heard and discussed. It appeared that in the previous year relating to the assessment year the assessee had made payments of Rs. 3,40,00,000/- to U.P. Distillers Association. A Search was conducted u/s 132 of the Act, in the office of the U.P. Distillers' Association by the Directorate of Income Tax (Investigation) New Delhi. From the seized record the payment of Rs. 3,40,00,000/- was found, made by the assessee. It was submitted by the A/R that to avoid protracted litigation and to put a quitous to the whole issue the assessee had offered this amount as disallowable item u/s 37(1) of the Act, through the return dated 3rd April 2006. Since the amount was offered as income by the assessee this amount is added back in computation of Income, in addition to the assessments made u/s 143(3) dated 28.12.2005. The computation of income is made below:- 1152909-2 Since the assessee offered the additional income due to the search operation u/s 132 of the Act in the premises of UP Distillers Association, penalty proceedings u/s 271(1)(c ) is initiated separately."
(3.) The assessment order dated 30th March, 2007 levying penalty in so far as the same is material for our purpose reads as follows:- " In the case, assessment U/s.143(3) of the Income Tax Act, 1961 was completed on 28.12.2005. Subsequently, on 3rd April, 2006, the assessee filed a return stated to be revised return along with a letter, the assessee disclosed a sum of Rs. 3,00,00,000/- being alleged payment by the assessee to U.P. Distiller's Association during the previous year relevant to the assessment year and stated that this amount is not allowable by virtue of explanation to Section 37(1) of the Income Tax Act, 1961. Since, the assessment U/s. 143(3) of the Income Tax Act, 1961 was completed this return is treated as invalid return. But since the assessee disclosed additional amount of Rs. 3,00,00,000/- as income which required verification in the context of the original return, the case was re-opened U/s. 147 of the Income Tax Act, 1961 and notice U/s. 148 was issued. The re-assessment proceedings U/s. 147 / 143(3) of the I.T. Act'61 were completed on 19.05.2006. It was observed that a search was conducted U/s. 132 of the Act, in the office of the U.P. Distillers' Association by the directorate of Income Tax (Investigation), New Delhi and in the seized record a payment of Rs. 3,00,00,000/- was found to be made by the assessee to the U.P. Distillers' Association. On the basis of the above detection the assessee offered income by way of disallowance of expenditure under explanation to Section 37(1) of the Act. The assessee in its submission stated that to avoid protracted litigation and to put a quietus to the whole issue the assessee had offered this amount as disallowable item U/s. 37(1) of the Act. The tax was charged in the assessment U/s. 143(3), U/s.115JB of the Act. In the so called revised return the assessee increased the Book Profit by the amount of Rs.3,00,00,000/-. Notice U/s. 271(1)(c ) was issued on 19.05.2006 and this notice was duly served on the assessee. The assessee filed reply on lst June, 2006. The assessee submitted that the so called revised return filed by the assessee on his own volition and no concealment was detected in course of assessment proceedings, and mere acceptance by the assessee of certain amount as his taxable income cannot mean that he deliberately concealed any part of the income. The assessee further submitted that the case of the assessee was covered by the decision in the case of C.I.T. Vs- Suresh Chandra Mittal (SC), 2001 251 ITR 009. The submission of the assessee is not acceptable because of the fact that the assessee disclosed the additional income only after he was confronted by the D.I (Inv), New Delhi with certain evidence. Had he not been confronted he would not have disclosed this additional amount as income/disallowable expenditure. So there was a definite concealment on the part of the assessee. As such Penalty U/s. 271(1) of the Act is leviable. In both the assessments made U/s. 143(3) & 147, taxes were charged U/s 115JB. Hence the amount of tax sought to be evaded is calculated at Rs. 22,95,000/- being the difference between taxes on the total income assessed U/s. 147 and U/s. 143 (3). The assessee is directed to pay Rs. 22,95,000/- as Penalty U/s.271(1)(c ) of the Income Tax Act, 1961, being 100% of the tax sought to be evaded. The order is passed with the approval of the addl. C.I.T., Range-IV( C), Kolkata ".;