- (1.) Challenging order dated 20.05.2005 in I.T.(SS) A No. 17/Pat/2002 passed by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi whereby the CIT (Appeals) rejected the Revenue's appeal, the Revenue has approached this Court by filing the present Tax Appeal No. 7 of 2005.
(2.) The assessee is a Private Limited Company engaged in manufacture of chemicals used mainly by steel plants. A search and seizure operation under Section 132(1) of the Income Tax Act (in short, 'the Act') was conducted on 29.10.1998 simultaneously in the office premises of the assesseeCompany and at the residence of the Managing Director of the Company and others. During the search, certain cash and FDRs were recovered and seized. A notice under Section 158BC of the Act was issued by the Assessing Officer on 20.11.1998 requiring the assessee to file the return for the block period 01.04.1989 to 29.10.1998 within a period of 16 days. The assessee filed the return on 01.03.1999 disclosing undisclosed income of Rs. 1,17,00,000/ only. Subsequently, the assessee filed a notarised affidavit on 16.08.1999 disclosing additional undisclosed income of Rs. 58,20,815/. A notice under Section 143(b) of the Act was issued on 24.08.1999 and the proceeding was conducted on different dates before the Assessing Officer.
(3.) Before the Assessing Officer, the assessee contended that the delay in filing the return under Section 158BC was attributable to the Department as the assessee was not provided with extract of the seized documents for which it was entitled under Section 132 (9) of the Act. It was contended that the return was filed in a haste with a view to avoid penal interest and therefore, in the absence of relevant documents the total concealment could not be disclosed by the assessee. It was further contended that since the assessee itself disclosed an additional concealed income of Rs. 58,20,815/, before it was otherwise detected by the Department, there was no malafide intention on the part of the assessee to defraud the Revenue. Lastly, it was contended that since there was no willful concealment on the part of the assessee nor any inaccurate particular has been furnished and since, the penalty proceeding under Section 158BFA of the Act and the penal proceeding under Section 271(1)(c) of the Act are separate and exclusive proceedings, no penalty could have been imposed on the assessee on the additional disclosure made by the assessee on 16.08.1999. The Assessing Officer assessed the undisclosed income of the assessee at Rs. 1,83,76,129/ and after deducting the undisclosed income of Rs. 1,17,00,000/ disclosed by the assessee, worked out the net concealed income at Rs. 66,76,129/ vide assessment order dated 14.09.1999. A notice under Section 158BFA of the Act was issued to the assessee for compliance by 22.09.1999 and accordingly, the assessee filed its reply to notice under Section 158BFA. The Assessing Officer did 3 not accept the assessee's contention and explanation and accordingly, the Assessing Officer imposed penalty under Section 158BFA of the Act amounting to Rs. 40,05,677/.;