ACIT, Kumbakonam V. M/s. E.S.Mydeen & Co., Kumbakonam

ITA 1106/CHNY/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68916 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-12-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 16-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: S SRIDHAR
• Keywords: Reason to believe
• Section: 143(3); 133A; 147; 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 1106/MDS/2011 (ASSESSMENT YEAR: 2001-02) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, 31, KRISHNASAMY ROAD, GANDHI NAGAR, KUMBAKONAM. VS. M/S. E.S.MYDEEN & CO. 20, POTHAMARAI NORTH, KUMBAKONAM. PAN:AAAFE0231D (APPELLANT) (RESPONDENT) APPELLANT BY : MR. S.DAS GUPTA, JCI T RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE DATE OF HEARING : 12 TH DECEMBER, 2013 DATE OF PRONOUNCEMENT : 31 ST DECEMBER, 2013 O R D E R PER CHALLA NAGENDRA PRASAD, JM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), TIRUCHIRA PALLI DATED 28.03.2011 FOR THE ASSESSMENT YEAR 2001-02. THE ONLY GRIEVANCE IN THE APPEAL OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.1106/MDS//2011 2 2. BRIEF FACTS ARE THAT ASSESSEE FILED RETURN OF IN COME ON 30.10.2001 DECLARING INCOME OF ` 6,92,150/- AND THE RETURN WAS PROCESSED UNDER SECTION 143(1) ON 5.3.2002 ACCE PTING THE INCOME RETURNED. LATER ON, NOTICE UNDER SECTION 148 WAS ISSUED ON 6.1.2003 AND IN RESPONSE TO THIS NOTICE, ASSESSEE FILED RETURN DECLARING INCOME OF ` 7,84,540/- ON 15.9.2003. THE ASSESSMENT WAS COMPLETED ON 25.3.2004 COMPUTING INCOME AT ` 13,87,690/-. LATER THE ASSESSING OFFICER ONCE AGAIN ISSUED NOTICE UNDER SECTION 148 ON 13.12.2007 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME AS THERE WAS REASON TO BELIEVE THAT THE INCOME OF THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IN VIEW OF THE SEARCH CONDUCTED BY THE CENTRAL EXCISE AUTHORITIES ON 20.0 8.2002. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED RETURN ON 20.12.2001 ADMITTING INCOME OF ` 32,47,960/-. THE REASSESSMENT WAS COMPLETED UNDER SECTION 143(3) REA D WITH SECTION 147 ON 31.12.2007 DETERMINING THE INCOME AT ` 46,76,700/-. WHILE COMPLETING THE ASSESSMENT, ADDI TION OF ` 14,28,748/- WAS MADE BY THE ASSESSING OFFICER AND HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ITA NO.1106/MDS//2011 3 ACT. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFF ICER CONSIDERED ADDITIONS OF ` 2,28,748/- ON ACCOUNT OF UNEXPLAINED PURCHASES AND ON THE ADDITIONAL INCOME OF ` 18,60,276/- OFFERED BY THE ASSESSEE FOR IMPOSING PENALTY IGNORING THE SUBMISSIONS OF THE ASSESSEE THAT THE I NCOME WAS RETURNED VOLUNTARILY AND THERE IS NO CONCEALMENT DE TECTED BY THE DEPARTMENT AND THIS INCOME WAS OFFERED VOLUNTAR ILY ONLY IN VIEW OF THE PETITION FILED BEFORE THE SETTLEMENT COMMISSION BY THE ASSESSEE OFFERING ADDITIONAL INCOME FOR EXCI SE DEPARTMENT. HOWEVER, THE ASSESSING OFFICER LEVIED P ENALTY CONSIDERING THESE TWO ADDITIONS AS CONCEALED INCOME . ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) DE LETED THE PENALTY AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 3. THE DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER IN LEV YING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE DEP ARTMENTAL REPRESENTATIVE SUBMITS THAT BOTH IN ORIGINAL AS WEL L AS IN THE RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SEC TION 148, THE ASSESSEE HAS NOT OFFERED THIS ADDITIONAL INCOME , AND ONLY ITA NO.1106/MDS//2011 4 WHEN IT WAS DETECTED IN THE COURSE OF SEARCH BY THE CENTRAL EXCISE AUTHORITIES, THE ASSESSEE CAME FORWARD TO OF FER THE INCOME. SO HE SUBMITS THAT THE OFFER MADE BY THE AS SESSEE IS NOT VOLUNTARY AND OFFER OF ADDITIONAL INCOME WOULD NOT HAVE MADE BUT FOR THE SEARCH OF THE EXCISE AUTHORITIES. THEREFORE, HE SUBMITS THAT THERE IS CONCEALMENT OF INCOME BY T HE ASSESSEE AND HENCE LEVY OF PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT IS JUSTIFIED. 4. THE COUNSEL FOR THE ASSESSEE RELYING ON THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUBMITS THAT THE DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE, CHENNAI CONDUCTED A SEARCH ON 20.8.2002 IN THE PREMISES OF THE ASSESSEE. PURSUANT TO THE SAID SEARCH BY THE DIRECT ORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE, ASSESSEE FI LED AN APPLICATION FOR SETTLEMENT BEFORE THE CUSTOMS & CEN TRAL EXCISE SETTLEMENT COMMISSION ON 25.5.2005. AT THE S AME TIME, THE ASSESSEE VOLUNTARILY BY A LETTER DATED 21 .7.2005 OFFERED INCOME OF ` 18,60,276/- TO THE INCOME-TAX DEPARTMENT AND PAID INCOME TAX OF ` 15,00,650/-. THIS WAS REGULARIZED BY ITA NO.1106/MDS//2011 5 THE ASSESSING OFFICER BY ISSUE OF NOTICE UNDER SECT ION 148 DATED 13.12.2007 AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 ON 31.12.2007 . COUNSEL SUBMITS THAT THE INCOME OF ` 32,47,960/- RETURNED BY THE ASSESSEE INCLUDES THE ADDITIONAL INCOME OF ` 18,60,276/- OFFERED BY THE ASSESSEE. THE COUNSEL SUBMITS THAT THIS ADDITIONAL INCOME OFFERED BY THE ASSESSEE TO THE EX CISE DEPARTMENT ON A PETITION FILED BEFORE THE SETTLEMEN T COMMISSION WAS BEFORE DETECTION OF ANY CONCEALMENT BY THE INCOME-TAX DEPARTMENT. HE SUBMITS THAT THERE IS NO CONCEALMENT OF INCOME BY THE ASSESSEE AND THE INCOM E WAS OFFERED VOLUNTARILY BY THE ASSESSEE. 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. THE COMMISSIONER OF INCOME TAX (APPEAL S) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETE D THE PENALTY HOLDING AS UNDER:- 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT . IT IS TRUE THAT THE APPELLANT HAD ADMITTED THE INCOME OF ` 18,60,276/- IN THE RETUR N OF INCOME FILED VO L UNTARILY EVEN BEFORE A QUERY FROM THE ITA NO.1106/MDS//2011 6 ASSESSING OFFICER & THIS CANNOT BE TREATED AS CONCEALED INCOME AS THE VISE OF CONCEALMENT SHOULD STEM FROM THE RETURN OF INCOME AND DISCOVERED BY THE OFFICER THEREIN AS HELD IN SANTOSH NADAR'S CASE 46 ITR 411 (MAD) AND IN BRIJ MOHAN'S CASE 120 ITR 1 ( SUPREME COURT) & ANOTHER CASE OF THE APEX COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL ( 2001) 251 ITR 9 ( SC ). SEVERAL JUDICIAL DECISIONS IN SUPPORT OF THE ABOVE STAND. FURTHER, TREATING THE INCOME OFFERED & DISCLOSED IN THE RETURN AS CONCEALED INCOME WHEN SUCH INCOME WAS ASSESSED IN ENTIRETY & WHEN NONE OF THE EXPLANATIONS OF SECTION 271 (1))(C) IS APPLICABLE TO THE APPELLANT'S CASE THE LEVY OF PENAL T Y IS NOT SUSTAINABLE. WITH REGARD TO PENALTY ON THE ADDITION OF ` 2,28,749/ - . I AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE INCOME RELATABLE TO THE EARLIER YEAR THOUGH ASSESSED FOR THE YEAR IN QUESTION CANNOT AT ALL BE TREATED AS THE ESCAPED INCOME AND THE LEVY OF PENALTY IS NOT WARRANTED. CAREFULLY CONSIDERING THE FACTUAL POSITION THE ASSESSING OFFICER IS D I RECTED TO CANCEL THE PENALTY U/S. 271(1)(C) TO THE TUNE OF ` 8,18 , 897/-. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE PENALTY ON THE ADDITIONAL INCOME OFFERED BY THE ASS ESSEE AND ON THE ADDITION MADE TOWARDS UNEXPLAINED PURCHASES STATING THAT THE ASSESSEE VOLUNTARILY OFFERED THE INCOME B EFORE ANY QUERY FROM THE DEPARTMENT IN RESPECT OF THE INCOME OFFERED BY ASSESSEE AND THE ADDITION OF ` 2,28,749/- MADE SHOULD ITA NO.1106/MDS//2011 7 NOT HAVE BEEN MADE THIS YEAR AND IT RELATES TO EARL IER YEAR AND THEREFORE HELD THAT THERE IS NO ESCAPEMENT DURI NG THIS YEAR. NO DOUBT, THE ASSESSEE FILED LETTER VOLUNTAR ILY OFFERING ADDITIONAL INCOME. BUT THIS WAS NOT DONE BEFORE THE SEARCH CONDUCTED BY THE CENTRAL EXCISE AUTHORITIES ON 20.0 8.2002 DETECTING UNACCOUNTED SALES MADE BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. IT IS ALSO SEEN THAT THE ASSESSE E DID NOT OFFER THE ADDITIONAL INCOME IN THE RETURN FILED ON 15.09.2003 IN RESPONSE TO NOTICE UNDER SECTION 148 WHICH WAS I SSUED MUCH AFTER THE DATE OF SEARCH BY THE EXCISE AUTHORI TIES. IT IS ALSO SEEN THAT IN FACT THE ASSESSING OFFICER CALLED FOR BOOKS OF ACCOUNTS IMPOUNDED BY THE EXCISE AUTHORITIES BUT T HE SAME COULD NOT BE PRODUCED BEFORE COMPLETION OF ASSESSME NT ON 25.03.2004. EVEN AT THIS STAGE ALSO THE ASSESSEE DI D NOT OFFER THE ADDITIONAL INCOME ON ACCOUNT OF UNACCOUNTED SAL ES. ASSESSEE CHOSE TO FILE LETTER OFFERING ADDITIONAL I NCOME ONLY WHEN IT WAS DECIDED TO FILE A PETITION BEFORE SETTL EMENT COMMISSION AFTER THE EXCISE AUTHORITIES DETECTED TH AT ASSESSEE MADE SALES OUTSIDE THE BOOKS OF ACCOUNTS. IN THESE CIRCUMSTANCES, IT CANNOT BE HELD THAT THE ASSESSEE HAS ITA NO.1106/MDS//2011 8 OFFERED ADDITIONAL INCOME VOLUNTARILY TO THE DEPART MENT. EXCEPT STATING THAT THE ASSESSEE OFFERED ADDITIONAL INCOME VOLUNTARILY BEFORE ANY DETECTION BY THE DEPARTMENT , THE ASSESSEE HAS NOT GIVEN ANY PLAUSIBLE EXPLANATION AS TO WHY THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND PENALTY SHOULD NOT BE IMP OSED. 7. INSOFAR AS ADDITION MADE TOWARDS UNEXPLAINED PURCHASES IS CONCERNED, THE SUBMISSION OF THE ASSES SEE WAS THAT THE TOTAL UNEXPLAINED PURCHASES ADMITTED BY TH E ASSESSEE WAS AT ` 42,28,749/-. THE ASSESSEE EXPLAINED THAT AN AMOUNT OF ` 40,00,000/- DECLARED UNDER VDIS SCHEME WAS UTILIZED FOR THESE PURCHASES. THIS EXPLANATION OF T HE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER AND CONSIDERE D ` 40,00,000/- AS PURCHASES EXPLAINED WITH SOURCE AND THE BALANCE OF ` 2,28,749/- WAS CONSIDERED AS UNEXPLAINED PURCHASES BY THE ASSESSING OFFICER. THE ASSESSEE H AS NOT GIVEN ANY PROPER EXPLANATION FOR THE BALANCE UNEXPL AINED PURCHASES. ITA NO.1106/MDS//2011 9 8. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), EXPLANATION OF THE ASSESSEE WAS THAT AN AMOUNT OF ` 40,00,000/- INVESTED IN FINANCIAL YEAR 1999-2000 HA S IMPROVED TO ` 42,28,749/- AT THE CLOSING OF THE YEAR DUE TO ACCRETION AND THIS AMOUNT WAS BROUGHT IN AS OPENING STOCK FOR THE FINANCIAL YEAR 2000-01RELAVANT TO THE ASSESSMEN T YEAR 2001-02, THEREFORE ASSESSEES EXPLANATION WAS THAT IF AT ALL THIS DIFFERENCE WAS TO BE CONSIDERED, IT RELATES T O THE EARLIER YEAR BUT NOT TO THIS ASSESSMENT YEAR. HOWEVER, TO P URCHASE PEACE WITH THE DEPARTMENT, THE ADDITION WAS ACCEPTE D THOUGH INCOME WAS FACTUALLY RELATED TO EARLIER YEAR. THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE ADDIT ION OF UNEXPLAINED PURCHASES OF ` 2,28,749/-. THE EXPLANATION OF THE ASSESSEE THAT INVESTMENT OF ` 40,00,00/- HAD IMPROVED TO ` 42,28,749/- AT THE CLOSE OF THE YEAR DUE TO ACCR ETION IS NOT SUPPORTED WITH ANY EVIDENCE ON RECORD, THEREFORE, T HE EXPLANATION IS NOT BELIEVABLE. ITA NO.1106/MDS//2011 10 9. THE HONBLE SUPREME COURT IN THE CASE OF MAK DAT A P.LTD., VS. CIT (358 ITR 593) HELD THAT VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE HONBLE SUPREME COURT FURTHER HELD AS UNDER:- WE HAVE HEARD COUNSEL ON EITHER SIDE. WE FULLY CON CUR WITH THE VIEW OF THE HIGH COURT THAT THE TRIBUNAL HAS NOT PROPERLY UNDERSTOOD OR APPRECIATED THE SCOPE OF E XPLANATION 1 TO SECTION 271(1)(C) OF THE ACT, WHICH READ AS FOLLOWS:- 'EXPLANATION 1 . -WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON U NDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLAN ATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN THE AMOUNT ADDED OR DISALLOW ED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RES ULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF TH IS SUB- SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPE CT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' THE ASSESSING OFFICER, IN OUR VIEW, SHALL NOT BE CA RRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DISCLOSURE', 'BUY PEACE', 'AVOID LITIGATION', ' AMICABLE SETTLEMENT', ETC., TO EXPLAIN AWAY ITS CONDUCT . THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATIO N FOR CONCEALMENT OF P A R T IC ULAR S OF I N COME OR F URNI S H I N G I N ACC U RATE PA R TICUL A RS OF I N COME. THE EX PLA NA TI ON TO SEC T ION 271(1) RAISES A PRES U MPTION OF CONCEAL M ENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSI N G OFFICER, BETWEEN REPORTED AND ASSESSED I N COME. T H E BU R DEN IS THEN ON T HE ASSESSEE TO SHOW OTHERWISE, BY COGENT A N D RE LI A B LE ITA NO.1106/MDS//2011 11 EVIDENCE. WH EN THE I N ITIAL ONUS PLACED BY T HE EXPLA N A T ION, H AS B EE N DI SC HA RGED BY H IM , T HE ONUS S HI FTS ON THE REVEN U E TO SHOW THAT THE A MO UN T IN QUESTION CONSTITUTED THE INCOME AND NOT O T HERWISE. THE ASSESSEE HAS O N LY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM OF RS. 40,74,000 WITH A VIEW TO AVO ID LITIGA T ION, BUY PEACE AND TO CHANNELIZE T H E ENERGY AND RESO UR CES T OWARDS P RODUC T IVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE I N COME-TAX DEPARTMENT . THE STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER EXPLANATION 1 TO SECTION 271(1) (C) OF THE ACT . IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT RELEASE THE APPELLA N T-ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE T HAT WHEN A N ASSESSEE M A KES A VOLUN T ARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY . WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER O F SURRENDER WAS MADE IN VIEW OF DETECTIO N MA D E BY T H E ASSESSING OFFICER I N THE SEARCH CONDUCTED IN THE SISTER CONCER N OF T HE ASSESSEE. I N THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDING S HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING SHARE APPLICATION FORMS, BA N K STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPA NI ES, AFFIDAVITS, COPIES OF INCOME-TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRAN SFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON DECEMBER 16, 2003, IN THE CASE OF A SI STER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS R ETURN OF I N COME. HA D IT B EEN T HE I NT ENTION OF THE ASSESSEE TO MAKE FULL AND T R U E DISC L OSURE OF ITS I N COME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLE AR THAT THE ASSESSEE HAD NO INTE NT ION TO DECLARE ITS TRU E I N COME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO R ECORD AL L ITS TRANSA C TIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TR UE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEA R TO YEAR. ITA NO.1106/MDS//2011 12 THE ASSESSING OFFICER, IN OUR VIEW, HAS RECORDED A CATEGORICAL FI N DING THAT HE WAS SATISFIED THAT THE ASSESSEE H AD CO N CEA L ED T R UE PA RT ICU L ARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDI N GS U N DER SECTION 271 READ WITH SECTION 274 OF THE INCOME-TAX ACT, 1961 . THE ASSESSING OFFICER HAS TO SATISFY WHETHER THE PE NALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE O F THE ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER I S NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. THE SCOPE OF SECTION 271(1) (C) HAS ALSO BEEN ELABORATELY DISCUSSED BY THIS COURT IN UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [2008] 13 SCC 369 1 AND CIT V. ATUL MOHAN BINDAL [2009] 9 SCC 589 . THE PRINCIPLE LAID DOWN BY THIS COURT, IN OUR VIEW, HAS BEEN CORRECTLY FOLLOWED BY THE REVENUE AND WE FIND NO ILLEGALITY IN THE DEPARTMENT INITIATING PENALTY PR OCEEDINGS IN THE INSTANT CASE. WE, THEREFORE, FULLY AGREE WI TH THE VIEW OF THE HIGH COURT. HENCE, THE APPEAL LACKS MER IT AND IS DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS. 10. AS COULD BE SEEN FROM THE ABOVE DECISION OF THE HONBLE APEX COURT THAT THE ASSESSEE EVEN THOUGH FI LED RETURNS VOLUNTARILY DISCLOSING ADDITIONAL INCOME PU RSUANT TO A SEARCH IN THE CASE OF SISTER CONCERNS OF THE ASSESS EE, IT IS NOT A VOLUNTARY DISCLOSURE MADE BY THE ASSESSEE, THE DI SCLOSURES MADE BY THE ASSESSEE WERE PURSUANT TO THE SEARCH CONDUCTED IN SISTER CONCERNS. THE HONBLE SUPREME COURT HELD THAT THE LAW DOES NOT PROVIDE THAT WHEN AN AS SESSEE MAKES VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. THE APEX COURT OBSERV ED THAT ITA NO.1106/MDS//2011 13 ASSESSING OFFICER SHALL NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE VOLUNTARY DISCLOSURE, BUY PEACE, AVO ID LITIGATION, AMICABLE SETTLEMENT ETC. TO EXPLAIN AWA Y ITS CONDUCT. THE APEX COURT HELD THAT IT HAS TO BE SEEN WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. 11. IN THE CASE ON HAND, THE ASSESSEE EXCEPT STATIN G THAT IT HAD FILED LETTER OFFERING ADDITIONAL INCOME, NO OTH ER EXPLANATION WAS GIVEN EVEN THE STATEMENT OF THE ASS ESSEE THAT IT HAD OFFERED ADDITIONAL INCOME VOLUNTARILY P ROVED TO BE NOT CORRECT, AS THE ASSESSEE OFFERED THIS ADDITIONA L INCOME ONLY AFTER CENTRAL EXCISE AUTHORITIES CONDUCTED SEA RCH, IMPOUNDED BOOKS OF ACCOUNTS AND FOUND THAT ASSESSEE MADE SALES OUTSIDE THE BOOKS OF ACCOUNT. THEREFORE, THE EXPLANATION OF THE ASSESSEE IT HAD VOLUNTARILY OFFE RED INCOME IS NOT CORRECT. IN THE CIRCUMSTANCES, WE REVERSE T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND RESTOR E THE ITA NO.1106/MDS//2011 14 PENALTY ORDER OF THE ASSESSING OFFICER. THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, TH E 31 ST DAY OF DECEMBER, 2013 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY ) (CHALLA NAGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI. DATED THE 31 ST DECEMBER, 2013. SOMU COPY TO: (1) APPELLANT (4 ) CIT(A) (2) RESPONDENT (5 ) D.R. (3) CIT (6 ) G.F.