SINGHAL, J. - (1.) THE following questions have been raised by the assessees under Section 256 (2) of the Income Tax Act: 1. "whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that penalty imposed U/s 271 (1) (c) of the Act is justified ? 2. Whether on the facts and circumstances of the case, the Income-tax appellate Tribunal was justified in holding that the penalty so imposed is valid in the eye of law as the return in question were submitted in consequence of settlement arrived at the filing of return u/s 148 was merely a valid procedure to give the assessment a valid shape? 3. Whether on the facts and circumstances of the case, the learned Income-tax Tribunal is right in the eye of law in upholding that penalty U/s 271 (l) (c) of the Act in respect of income of Rs. 11,000/-as surrendered for the purchase of peace of mind and to avoid litigation in view of the settlement arrived at U/s 132 of the Income tax Act ? 4.Whether on the facts and circumstances of the case, the Tribunal wag justified in holding that there are positive material on record as parallel accounts which go to show that surrendered income represent income of particular year which the assessee knowingly and deliberately did not disclose in original return of income so as to warrant the conclusion that the assessee concealed the particulars of the income within the meaning of section 271 (1) (c) of the Income tax Act ? 5.Whether on the facts and circumstances of the case, penalty would be exigible under the proviso of section 271 (l) (c) of the I. T. Act ? (6) Whether on the facts and circumstances of the case, the Tribunal was right in holding that action of assessee in agreeing to include certain income as an income of the year is admission of income having been concealed ? (7) Whether there was any evidence or material on record to show that Department had collected any evidence and that assessee had any transaction out side the books to legally justify levying of penalty ?"
(2.) THE prayer of the assessee is that a question of law arises out of the order of the Tribunal and therefore the Income tax Appellate Tribunal should be directed to refer the above questions or any one of them being questions of law. The facts of the case are that a search was carried on at the business premises of the Firm. On the basis of the material found, the Income tax Officer passed an order under section 132 (5) of the income tax Act for retaining the assets which were seized during the course of search. The assessee subsequently submittd a settlement petition to the Commissioner. The Commissioner, Income Tax accepted the said petition and directed that assessment be framed on the basis of the figure now disclosed and that the minimum penalty under Section 271 (1) (c) may be levied on the assessee. Consequently the assessments were framed under sec. 148 on the basis of the return submitted and the minimum penalty was levied. The assessee submitted an appeal to the A. A. C. who came to the conclusion that the penalty levied is not justified. Against this order the Revenue preferred an appeal to the Income tax Appellate Tribunal and the Tribunal came to the conclusion that in the instat case the evidence was collected as a consequence of search and the said income was not disclosed in the books of accounts and was out side the books of accounts. It was in these circumstances that the assessee had to surrender the said concealed income by way of settlement. The assessee has agreed to include the said income and the admission of the assessee is sufficient for levy of penalty under Sec. 271 (l) (c) of the Act. It was however observed that the assessee may if so desire move for waiver under sec. 273-A to the C. I. T. The reference application submitted to the Income tax Appellate Tribunal was rejected on the ground that the questions raised are primarily of fact and no questions of law arises. We have considered over the matter. Reliance has been placed by the learned counsel for the petitioner on case of CIT Vs. Smt. Satnam Malik (1) in which it was held that where revised return was filed disclosing certain income without consideration of the entire material then a question of law arises as to whether the penalty u/s 271 (1) (c) could be levied or not. Calcutta High Court in Bhagwanji Bhawan Bhai and Company Vs. CIT (2) has held whether the statement could lead to inference that there was an admission is a question of law. In Rasoolji Buxji Vs. CIT (3) this court has held that the question whether the Tribunal was justified in imposing penalty under Section 271 (1) (C) merely on the basis of admission made by the assessee for the purpose of settlement during the re-assessment proceedings was a question of law, which has to be referred.
(3.) A question can be said, to arise out of the order of the Tribunal, which could be a question of law when a revised return has been submitted without there being any evidence in possession of the department. If some docunents have been seized or there is a positive evidence on the basis of which it could be said that there was concealment of income as in the present case where after the search and seizure even the order under Sec. 132 (5) was passed, the position would stand on different footing. It cannot be said to be a case of mere submission of revised return voluntarily. The assesses had no option after the department has gathered the evidence by way of search and, therefore, the' admission of the assessee by surrendering such concealed income by filing the revised return would be sufficient evidence for the purpose of levy of penalty. Delhi High Court in Rathnam and Company Vs. I AC, (4) has held that where the assesses agreed to addition, the levy of penalty was justified- The Calcutta High Court in CIT V. P. 8. Shah and Company P. Ltd. (5) has held that the onus is on the revenue to prove that the cash credits represented the concealed income of the assessee, yet, where in the statement to the case, it has been stated that the assessee was willing to have the same treated as its undisclosed income then in penalty proceedings, the department had no further duty to show that the sum was assessee's concealed income. " Bombay High Court in Western Auto Mobiles Vs. CIT (. 6) has also held that where assessee has agreed to the inclusion of certain amount which were discovered from accounts, levy of penalty was justified. ;