- (1.) THE appeals were admitted on different dates, by different orders, framing following substantial question of law, being as under : "Whether on the facts and in the circumstances of the case, when return is submitted in pursuance of notice under s. 148 showing higher income than returned in original return, as a result of survey in the premises of the assessee during which assessee has surrendered income in addition to the income assessed originally and the assessment has been made at such returned income, whether presumption under Expln. 1 to s. 271(1)(c) could be raised about the concealment of particulars of income to initiate proceedings for levy of penalty during the course of such reassessment -
(2.) THE matters relate to same assessee, but to three different assessment years, being 1995 -96, 1996 -97 and 1997 -98, and involve common question, and are therefore being decided by this common judgment.
(3.) THE necessary facts are, that the assessee submitted returns, for the relevant assessment years, and for the asst. yrs. 1995 -96 and 1996 -97, returns were processed under s. 143(1)(a), while the return for the asst. yr. 1997 -98 had the assessee, and certain discrepancies were pointed out. During this survey, statements of one of the partners of the firm were recorded by the survey team, the partner, has explained the discrepancies inasmuch as, in answer to question period, the work was done in the name of Unique Tyre and Trade, and the plant was given on contract, to Sabir Mohammad, whose address is not known, and the contract was given @ Rs. 2,000 per month, and that, the income of this contract is not entered in books of account. It was also explained while answering the question No. 17, that since Sabir was not literate, Shantilal was maintaining the register, then on a second thought, he gave out, that the receipt is of his firm, and is not entered in the books of account, and offered to surrender 15 per cent of the receipt as income, to be levied to tax, then in answer to question No. 18, relating to the claims to three different amounts, during the asst. yrs. 1995 -96, 1996 -97 and also 1997 -98, expenditure on account of discount and claim, so also commission and rebate, it was deposed, that the particulars of this claim, i.e. confirmation or other details from the concerned parties is not available, it was given out, that actually the expenditure was incurred, but it is not possible to get it verified to the extent of 100 per cent, therefore, in order to purchase peace of mind, he surrendered the total amount of Rs. 1,00,000 for the asst. yr. 1995 -96 and Rs. 1,70,000 for the asst. yr. 1996 -97, and prayed, that he may be exempted form liability of penalty and interests. It is this surrendered amount, which is bone of contention, inasmuch as, after the survey, the assessee filed revised return, disclosing the income, as surrendered, those returns were accepted, and assessment orders have been passed, but at the same time, in the assessment order, penalty proceedings under s. 271(1)(c) were ordered to be initiated. Accordingly, notices were issued, and AO, passed order, imposing penalty for the three different assessment years. These orders were challenged in appeal, by the assesses, and three appeals were decided by common order, by the learned CIT(A), who set aside the penalty, by holding inter alia, that the assessee had voluntarily surrendered the income, and in the statement, he has not admitted, that he has concealed income, and since, nothing was produced on the side of the Revenue, to establish, that the assessee had concealed the income, rather the surrender was made to purchase peace, and in the background of the fact, that the wife of the partner had undergone major operation, and his brother -in -law also died untimely. In such disturbed set (state) set of mind, this surrender was made, and it could not be said to be the case of concealment, within the meaning of s. 271(1)(c), r/w Expln. 1. The learned CIT(A) relied upon the various judgments, including the judgment of Hon'ble Supreme Court, and other High Courts, and thus, set aside the impugned order.;