Shri Deepchand Ladharam Kotwani, V. The ACIT,

ITA 123/IND/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8025 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-01-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 25-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESHPANDE
• Keywords: Rejection of books of accounts; Business income; Difference of opinion; Revised return; Set aside; Capital Gains
• Section: 271(1)(c); 143(3); 142(1); 143(2)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA, AM ITA NO.123/IND/08 A.Y. 1999-00 SHRI DEEPCHAND LADHARAM KOTWANI KHANDWA APPELLANT PAN AFGPK-0041-J VS ASSTT. COMMR. OF INCOMETAX CIRCLE KHANDWA RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE, CA RESPONDENT BY SMT. APARNA KARAN, SR. DR O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 30.11.2007. THE SUM AND SUBSTANCE OF THE GRO UNDS OF APPEAL RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT(A) WAS NOT JUS TIFIED IN CONFIRMING THE 2 PENALTY OF RS. 13,50,000/- LEVIED U/S 271(1)(C) OF THE ACT, WHICH IS TOTALLY WRONG, ILLEGAL AND UNWARRANTED AS THE PENALTY HAS B EEN CONFIRMED ON THE ISSUE OF GP ADDITION AND MEAGER AMOUNT OF FD INTEREST OF RS.7,972/-. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI S.S. DESHPANDE, LEARNED COUNSEL FOR THE ASSESSEE AND SMT. APARNA KARAN, LEA RNED ADDL. CIT DR. THE ARGUMENT ADVANCED BY MR. DESHPANDE, LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSEE IS A LIQUOR CONTRACTOR MADE SALE OF RS .22,69,30,850/- AND DECLARED INCOME OF RS.15,64,470/- IN THE ORIGINAL RETURN WHI CH WAS REVISED FOR THE FIRST TIME TO RS.16,04,880/- BY INCLUDING THE BANK INTERE ST. THE RETURN WAS AGAIN REVISED SUO MOTO BY DECLARING THE INCOME AT RS. 17, 10,620/- BY INCLUDING THE EARLIER YEARS EXPENSES. IT WAS PLEADED THAT THE A CCOUNTS OF THE ASSESSEE ARE AUDITED, HOWEVER THE AO REJECTED THE BOOKS OF ACCOU NTS BY ADOPTING GP RATE AT 8.5% WHICH RESULTED INTO ADDITION OF RS. 82,08,372/ - BY ACCEPTING THE SALES. IT WAS POINTED OUT THAT THE LEARNED CIT(A) RESTRICTED THE ADDITION BY ALLOWING RELIEF OF RS.10,21,189/-. IT WAS PLEADED THAT THE ASSESSEE AS WELL AS THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL WHERE THE GP R ATE WAS ADOPTED AT 7%. THE CRUX OF THE ARGUMENTS IS THAT THE PENALTY WAS LEVIE D ON THE BASIS OF ADOPTION OF GP RATE WHICH IS UNJUSTIFIED. THE LEARNED COUNSEL P LACED RELIANCE ON THE DECISION FROM THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. SHIVNARAYAN JAMNALAL & CO.; 232 ITR 311(MP), DILIP N. SHROFF V. JCIT; 291 ITR 519 (SC), ON ESTIMATION OF INCOME THE DECISION IN CIT V. AJAI B SINGH & COMPANY; 253 ITR 630 (P&H) AND CIT V. DHILLON RICE MILLS; 256 IT R 447 (P&H). IT WAS 3 POINTED OUT THAT THE ASSESSEE NEITHER CONCEALED ANY INCOME NOR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ON THE OTHER HAND, THE LEARNED SR. DR HEAVILY RELI ED UPON THE DECISION OF THE LEARNED CIT(A) BY FURTHER CONTENDING THAT THE A DDITION WAS EVEN CONFIRMED BY THE TRIBUNAL. IT WAS ALSO PLEADED THAT ASSESSEE HIMSELF REVISED THE RETURN AND THE CLOSING STOCK WAS NOT PROPERLY VALUED. RELIANCE WAS PLACED UPON THE DECISION IN MOOLJI JATMAL V. CIT; 160 ITR 475 (MP) BY FURTHER PLEADING THAT THERE WAS DEFECT IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE, THEREFORE, THE IMPOSITION OF PENALTY WAS ARGUED TO BE JUSTIFIED. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A COUNTRY LIQUOR CONTRACTOR FOR KHANDWA DISTRICT. HE IS ENGAGED IN T HE BUSINESS OF RETAIL SALE OF LIQUOR. THERE ARE 78 SHOPS AT DIFFERENT PLACES. IN REPLY TO THE QUERY OF THE AO AS TO HOW THE SALES OF DIFFERENT SHOPS ARE RECORDED, T HE ASSESSEE SUBMITTED THAT THE SALE PROCEEDS OF ALL THE SHOPS ARE COLLECTED DAILY AND RECORDED IN THE BOOKS OF ACCOUNTS. THE AO OBSERVED THAT THE TOTAL SALES ARE NOT FULLY RECORDED IN THE BOOKS OF ACCOUNTS AS THE SAME ARE NOT SUPPORTED BY PROPER VOUCHERS/BILLS. THE ASSESSEE ALSO ADMITTED THAT THE SALES ARE RECORDED ON THE BASIS OF CASH COLLECTED FROM DIFFERENT SHOPS. THE AO FURTHER OBSERVED THAT SINCE THE RECORDING OF SALES IS EXCLUSIVELY AT THE OPTION OF THE ASSESSEE, THERE IS NO CHECK TO THE AUTHENTICITY OF THE SALES RECORDED AS THE SAME ARE NOT OPEN TO V ERIFICATION. THE AO ALSO NOTED THAT THE AUDITORS IN THE TAX AUDIT REPORT EXP RESSED THEIR INABILITY TO GIVE THE QUANTITATIVE DETAILS OF STOCK BY MENTIONING IN ANNE XURE F TO FORM NO. 3CD OF 4 THE TAX AUDIT REPORT THAT DUE TO NUMBEROUS ITEMS, IT IS NOT POSSIBLE TO ASCERTAIN THE SAME. THE AO ALSO OBSERVED THAT THE AUDITORS IN THE TAX AUDIT REPORT CLEARLY STATED THAT NO EXPENSES PERTAINING T O PREVIOUS YEAR WERE DEBITED/CREDITED IN THE P&L ACCOUNT. HOWEVER, THE ASSESSEE, FOR THE REASONS BEST KNOWN TO HIM, HIMSELF REVISED THE RETURN OF IN COME BY ADDING A SUM OF RS.1,05,745/- ON ACCOUNT OF EARLIER YEAR EXPENSES D EBITED/CLAIMED IN THE P&L ACCOUNT. THE AO FURTHER NOTED THAT THOUGH THE AUDIT ORS HAVE SPECIFIED THAT MERCANTILE SYSTEM OF ACCOUNTING HAS BEEN FOLLOWED, YET THE ACCRUED INTEREST ON FDRS WAS NEITHER CREDITED NOR SPECIFIED IN THE AUDI TORS REPORT. SIMILARLY, INTEREST OF RS.1,70,458/- RECEIVABLE FROM STATE BAN K OF INDORE WAS NEITHER TAKEN IN THE P&L ACCOUNT NOR WAS MENTIONED BY THE AUDITOR S IN THE TAR. THE SAME WAS SUBSEQUENTLY DECLARED BY THE ASSESSEE VIDE THE FIRST REVISED RETURN. THE AO ALSO FOUND THAT THE TRANSPORT EXPENSES OF RS. 4,02, 795/- ARE NOT SUPPORTED BY VOUCHERS. THE AO, THEREFORE, OBSERVED THAT THE TAX AUDIT REPORT COULD NOT BE CONSIDERED AS CORRECT AND COMPLETE AND ACCORDINGLY HELD THAT THE CORRECT PROFITS COULD NOT BE ASCERTAINED FROM THE BOOKS. HE, THEREF ORE, BY APPLYING THE PROVISIONS OF SECTION 145(3) OF THE ACT, REJECTED T HE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ESTIMATED THE INCOME OF THE ASSESSEE A T @ 8.5% OF THE SALES DECLARED RESULTING IN AN ADDITION OF RS.82,08,372/- ON THIS ACCOUNT. THE LEARNED CIT(A) AND THE TRIBUNAL CONFIRMED THE REJECTION OF BOOKS OF ACCOUNTS OF THE ASSESSEE. HOWEVER, THE ADDITION MADE ON THIS ACCOU NT WAS FINALLY WORKED OUT AT RS.48,04,751/-. THE ADDITION OF RS. 7,972/- WAS AL SO MADE ON ACCOUNT OF 5 ACCRUED INTEREST ON FIXED DEPOSITS WHICH WERE NOT D ISCLOSED BY THE ASSESSEE. THIS ADDITION WAS ALSO CONFIRMED BY THE LEARNED CIT (A) AND THE TRIBUNAL IN APPEAL. IN VIEW OF THE ABOVE, THE AO INITIATED PENA LTY PROCEEDINGS U/S 271(1) (C ) OF THE INCOME TAX ACT, 1961. IN APPEAL, THE LE ARNED CIT(A) AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ACTION OF THE AO IN IMPOSING THE PENALTY U/S 271(1)(C) OF THE ACT. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS OF THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE PEN ALTY HAS BEEN LEVIED BECAUSE THE TRIBUNAL CONFIRMED THE GP ADDITION OF RS. 48,04 ,751/- AND THE INTEREST OF RS. 7,972/- WAS NOT SHOWN IN THE RETURN OF INCOME F ILED BY THE ASSESSEE. WE FIND FORCE IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT SINCE THE GP ADDITION HAS BEEN MADE ON ESTIMATE BASIS AND THE INTEREST AMOUNT OF RS. 7,972/- ON FD THOUGH WAS NOT SHOWN IN THE RETURN OF INCOME BUT THE SAME WAS REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, NO PENALTY CAN BE LEVIED. WE FURTHER FIND THAT FOR LEVYING PENALTY U/ S 271(1)(C ) OF THE ACT, EITHER THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE REVENUE HAS NOT PINPOINTED THAT EITHER THE ASSE SSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED ITS INCOME. IN THE CASE OF CIT V. SHIVNARAYAN JAMNALAL & COMPANY (SUPRA) THE FACTS ARE THAT THE ASSESSEE W HO HAD NINE LIQUOR SHOPS LOCATED IN SEVERAL PLACES MAINTAINED A SINGLE CASH BOOK AND LEDGER. THE ASSESSING OFFICER HELD THAT IT WAS NOT POSSIBLE TO ACQUIRE DAILY ACCOUNT FROM ALL 6 THE SHOPS REGULARLY AT A PARTICULAR PLACE AND THAT THE SALES OF ALL THESE SHOPS WERE RECORDED AT A STRETCH. HE, THEREFORE, ESTIMATED TH E SALES AND NET PROFIT. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1) OF THE INCOMETAX ACT, 1961, FOR CONCEALMENT AND IMPOSED PENALTY. THE TRIB UNAL CANCELLED THE PENALTY. ON A REFERENCE, THE HONBLE HIGH COURT OF MADHYA P RADESH HELD AS UNDER :- HELD, THAT THE ASSESSEE HAD PLACED BEFORE THE AUT HORITIES WHATEVER BOOKS OF ACCOUNT IT HAD MAINTAINED WHETHE R THEY WERE PROPERLY MAINTAINED OR NOT AND IT HAD NO T WITHHELD OR CONCEALED ANY MATERIAL OR MADE ANY DELIBERATE ATTEMPT TO DEFRAUD THE AUTHORITIES. THE REFORE, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PEN ALTY WAS NOT LEVIABLE. KEEPING IN VIEW THE FACTS AND THE CIRCUMSTANCES, TH E AFORESAID RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT FAVOURS TH E CASE OF THE ASSESSEE. THE ASSESSEE ALSO FINDS SUPPORT FROM THE RATIO LAID DOW N BY THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN HARIGOPAL SINGH V. CIT; 25 8 ITR 85 WHEREIN THERE WAS A DIFFERENCE OF OPINION AS REGARDS THE ESTIMATE OF INCOME. THE AO AS WELL AS THE TRIBUNAL ADOPTED DIFFERENT ESTIMATES IN ASSE SSING THE INCOME OF THE ASSESSEE. ON REFERENCE, IT WAS HELD BY THE HONBLE HIGH COURT THAT PENALTY CANNOT BE LEVIED WHERE INCOME HAS BEEN ESTIMATED. I N THE PRESENT APPEAL ALSO, THERE IS A DIFFERENCE OF ESTIMATION OF GP RATE BY T HE AO AND THE TRIBUNAL. DURING HEARING, THE LEARNED DR TOOK THE PLEA THAT S INCE QUANTUM ADDITION HAS BEEN SUSTAINED, THOUGH BY REDUCING THE GP RATE, THE REFORE, PENALTY PROVISIONS ARE ATTRACTED IN THIS CASE. WE ARE NOT AGREEING WIT H THIS PROPOSITION BECAUSE 7 QUANTUM AND PENALTY PROCEEDINGS ARE ALTOGETHER DIFF ERENT. EVEN OTHERWISE, NORMALLY THE ESTIMATION DEPENDS UPON THE APPROACH OF THE INDIVIDUAL AUTHORITY FOR WHICH THE ASSESSEE SHOULD NOT SUFFER UNLESS AND UNTIL IT IS PROVED ON RECORD THAT THE ASSESSEE CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE, THE PENALTY SHOULD BE LEVI ED SPARINGLY BY OBJECTIVELY AND JUDICIOUSLY ANALYZING THE MATTER, WHICH THE AO HAS FAILED TO DO AND HAS MECHANICALLY IMPOSED. FOR THE SUBJECTIVE APPROACH O F THE AUTHORITIES, ANY PERSON SHOULD NOT BE PUT TO HARDSHIP THAT TOO WITHO UT BRINGING COGENT MATERIAL ON RECORD. THE AO HAS NOT BROUGHT ON RECORD ANY POS ITIVE MATERIAL JUSTIFYING ESTIMATION OF A PARTICULAR RATE OF GP. THE ESTIMAT ION OF GP CANNOT LEAD TO A CONCLUSION THAT THE ASSESSEE HAS EITHER CONCEALED H IS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN ORDER TO ATTRACT CLAUSE OF SECTION 271(1) OF THE ACT, IT IS NECESSARY THAT THERE MUST BE CONCEALMENT BY THE ASSESSEE OF HIS INCOME OR FURNISHING OF INACCURATE PARTICULA RS OF SUCH INCOME. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THE PENAL TY PROVISION IS NOT ATTRACTED TO THE CASES WHERE THE INCOME OF THE ASSESSEE IS ASSES SED ON ESTIMATE BASIS AND CONSEQUENT ADDITIONS ARE MADE THEREON. IDENTICAL RA TIO WAS LAID DOWN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V AJAIB SINGH AND COMPANY (SUPRA) WHEREIN THE ADDITION TO THE INCOME WAS BASED ON ESTIMATE AND DISALLOWANCE OF EXPENDITURE, THE TRIBUNAL WAS HELD TO BE JUSTIFIED IN CANCELLING THE PENALTY. WHILE COMING TO THIS CONCLUSION, THE H ONBLE COURT ALSO CONSIDERED THE DECISIONS IN THE CASES OF ADDL.CIT V. SMT. CHAN DRAKANTA (205 ITR 607) AND 8 ADDL. CIT V. JEEVANLAL SHAH (205 ITR 244) (SC). THE DECISION IN THE CASE OF CIT V. GURBAX LAL & COMPANY (256 ITR 133( (P&H) CAN ALSO BE CITED WHEREIN THE REVISED RETURN WAS FILED VOLUNTARILY BY THE ASS ESSEE EVEN AFTER ASSESSMENT. THE TRIBUNAL WAS HELD TO BE JUSTIFIED BY THE HONBL E HIGH COURT IN CANCELLING THE PENALTY IMPOSED U/S 271(1) OF THE ACT. DURING HEARING THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE JURISDICTIO NAL HIGH COURT ITSELF IN THE CASE OF MOOLJI JATMAL V. CIT; 160 ITR 475 (MP) WHER EIN THE RETURNED INCOME WAS LESS THAN 80% OF THE ASSESSED INCOME AND THE AS SESSEE EVEN DID NOT APPEAR BEFORE THE ITO. IT WAS HELD THAT BURDEN IS ON THE A SSESSEE TO SHOW THAT NO CASE OF IMPOSITION OF PENALTY IS MADE OUT, THEREFORE, IT IS ON DIFFERENT FACTS, CONSEQUENTLY, MAY NOT HELP THE REVENUE. THE HONBLE APEX COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), HELD THAT IMPOSITION OF PE NALTY IS NOT AUTOMATIC AND IT IS A MATTER OF DISCRETION BECAUSE THE AO HAS TO BE FAI R AND OBJECTIVE. ON THE ISSUE OF CAPITAL GAINS, THE HONBLE COURT HELD THAT THE R EPORT OF THE REGISTERED VALUER CANNOT BE EXACT. IN THE PRESENT APPEAL ALSO, THE A O ESTIMATED THE GP BY ADOPTING THE RATE AT 8.5% WHICH WAS REDUCED TO 7% B Y THE TRIBUNAL ON QUANTUM ADDITION. THE AO LEVIED THE PENALTY ON THE BASIS OF SUCH ESTIMATION. WE ARE OF THE VIEW THAT IT MAY BE A GOOD CASE FOR QUANTUM ADD ITION BUT MAY NOT BE FOR IMPOSING PENALTY. IN THE IMPUGNED ORDER, THERE IS A MENTION THAT THE FREQUENT REVISION OF RETURNS BY THE ASSESSEE IS SUFFICIENT F OR IMPOSING PENALTY. WE ARE NOT AGREEING WITH THIS PROPOSITION BECAUSE IT IS NOT TH E CASE THAT THE RETURN WAS REVISED WHEN SOMETHING CONTRARY WAS DETECTED BY THE DEPARTMENT RATHER THE 9 ASSESSEE SUO MOTO REVISED ITS RETURNS, THEREFORE, I T CANNOT BE SAID THAT THE ASSESSEE WANTED TO CONCEAL ANYTHING RATHER THE BEHA VIOR OF THE ASSESSEE WAS MORE RESPONSIBLE THAT ANY PORTION OF THE INCOME MAY NOT LEFT UNRETURNED. SUO MOTO REVISION OF INCOME BY THE ASSESSEE ITSELF DOES NOT AMOUNT TO CONCEALMENT OF INCOME UNTIL AND UNLESS SOME CONTRARY MATERIAL I S BROUGHT ON RECORD, WHICH THE REVENUE HAS FAILED TO DO SO. EVEN REJECTION OF BOOKS ITSELF IS NOT SUFFICIENT FOR LEVYING PENALTY UNLESS AND UNTIL IT IS BROUGHT ON RECORD THAT THE ASSESSEE CONCEALED ITS INCOME. IF THE INTENTION OF THE ASSES SEE WOULD HAVE BEEN TO HIDE SOMETHING, THE ASSESSEE WOULD NOT HAVE SUO MOTO FIL ED THE REVISED RETURN. ON THE ISSUE OF REVISING THE RETURN BEFORE DETECTION B Y THE DEPARTMENT, THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SHR I NIRAJ JAIN AND ALOK JAIN(ITANO. 1091 & 1092/CHD/08) ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUND ER: THESE APPEALS ARE BY THE DIFFERENT ASSESSEES FOR ASSESSMENT YEAR 2004-05 AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 7.10.2008 ON THE GROUND THAT THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY OF RS.64,818/- AND R S. 68,737/- IMPOSED UNDER SECTION 271(1)(C) OF THE ACT . 2. DURING ARGUMENTS, WE HAVE HEARD SHRI VISHAL MOHAN LD COUNSEL FOR THE ASSESSEE AND SMT. SARITA KUMARI, LEARNED DR. MR VISHAL MOHAN CONTENDED THA T THE FACTS AND THE ISSUE IN BOTH THE APPEALS ARE IDE NTICAL BY SUBMITTING THAT THE RESPECTIVE ASSESSEE FILED OR IGINAL RETURN ON 1.11.2004 AND 31.10.2004, WHICH WERE SUBSEQUENTLY REVISED BEFORE ANYTHING DETECTED BY TH E DEPARTMENT, THEREFORE, THE PENALTY WAS ARGUED TO BE NOT JUSTIFIED. RELIANCE WAS PLACED IN CHEAP CYCLE STOR ES VS. CIT (281 ITR 166)(ALL.), CIT VS. GURBAX LAL & CO (2 56 ITR 133) (P&H), CIT VS. RAJENDRA PRASAD GUPTA (220 ITR 558) (PAT.) AND CIT VS. SURESH CHANDRA MITTAL (241 ITR 124) (M.P.). ON THE OTHER HAND, THE LEARNED DR 10 DEFENDED THE PENALTY ORDER BY SUBMITTING THAT THE ASSESSEE REVISED THE RETURN AFTER NOTICE WAS ISSUED TO THE RESPECTIVE ASSESSEE. RELIANCE WAS PLACED IN T HE CASE OF UNION OF INDIA & OTHERS VS. DHARMENDRA TEXT ILES PROCESSORS AND OTHERS (306 ITR 277)(SC) 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON THE FILE. SINCE F ACTS / ISSUE IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, THESE CAN BE DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER. BRIEF FACTS IN THE CASE OF SHRI ALOK JAIN A RE THAT ORIGINAL RETURN DECLARING INCOME OF RS. 29,70,890/- INCLUDING CAPITAL GAINS OF RS. 28,73,659/- WAS FILE D BY THE ASSESSEE ON 1.11.2004. THE CASE WAS SELECTED FOR SCRUTINY; THEREFORE, NOTICES UNDER SECTION 143(2) A ND 142(1) OF THE ACT WERE ISSUED ON 5.8.2005. THE ASSESSEE REVISED ITS RETURN OF INCOME ON 31.3.2006 BY DECLARING THE INCOME AT RS. 35,60,150/-. IT IS PER TINENT TO MENTION HERE THAT ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AT AN INCOME OF RS.35,60,105/- VIDE ORDER DATED 7.12.2006. THE LEARNED ASSESSING OFFICER REJ ECTED THE EXPLANATION OF THE ASSESSEE AND LEVIED PENALTY OF RS. 64,818/- UNDER SECTION 271(1)(C) OF THE ACT. LIKEWISE, IN THE CASE OF SHRI NEERAJ JAIN, THE ASSESSEE SHOWED INCOME OF RS.28,01,050/- IN ITS RE TURN FILED ON 31.10.2004. THE CASE WAS PROCESSED UNDER SECTION 143 (1) AT THE RETURNED INCOME ON 21.2.2005 . THE ASSESSEE LATER ON REVISED HIS INCOME RS. 33,65,860/- ON 31.3.2006. THE CASE WAS SELECTED FO R SCRUTINY, CONSEQUENTLY, NOTICES UNDER SECTION 143(2 ) AND 142(1) WERE ISSUED TO THE ASSESSEE TO WHICH THE ASSESSMENT PROCEEDINGS WERE ATTENDED FROM TIME TO T IME AND REQUISITE DETAILS WERE FURNISHED. THE LEARNE D ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS CONCEALED ITS INCOME BY FURNISHING INACCURATE PARTI CULARS, THEREFORE, PENALTY OF RS. 68,737/- WAS IMPOSED. O N APPEAL, THE LEARNED FIRST APPELLATE AUTHORITY AFFI RMED THE PENALTY ORDER, WHICH ARE UNDER CHALLENGE BEFORE TH E TRIBUNAL. 4. NOW QUESTION ARISES WHETHER PENALTY CAN BE IMPOSED ON THE BASIS OF REVISED RETURN BEFORE DETECTING THE SAME BY THE DEPARTMENT . WE HAVE FOUND THAT IN THE ASSESSMENT ORDER, IT HAS BEEN MENTIONED THAT THE ASSESSEE REVISED THE RETURN OF RS.35,60,150/- AND RS. 33,65,860/- ON 31.3.2006 RESPECTIVELY. THERE IS NO MENTION IN THE ASSESSMEN T ORDER THAT ANY NOTICE WAS SERVED UPON THE ASSESSEE 11 BEFORE FILING THE REVISED RETURN. EVEN THE LEARNED ASSESSING OFFICER CONSIDERED THE REVISED RETURN BY FRAMING THE ASSESSMENT UNDER SECTION 143(3). IT IS NOT THE CASE OF THE REVENUE THAT REVISED RETURN WERE FI LED BY THE ASSESSEE WHEN THEY WERE CORNERED BY THE DEPARTMENT, THEREFORE, WE ARE OF THE VIEW, THAT IMPOSITION OF PENALTY IS NOT JUSTIFIED. THE INITIA L BURDEN LIES ON THE REVENUE TO ESTABLISH THAT THE ASSESSEE HAS CONCEALED THE INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME BUT THE BURDEN SHIFTS TO ASSESSEE ONLY IF HE FAILED TO OFFER ANY EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS AN EXPLANATION WHICH I S OTHERWISE FALSE. FOR THIS VIEW, WE ARE FORTIFIED BY THE FOLLOWING DECISIONS:- 1. CIT VS. SURESH CHANDRA MITTAL (241 ITR 124)(M.P. ) 2. CIT VS. RAJENDRA PRASAD GUPTA ( 220 ITR 558) (PA TNA) 3. CIT VS. GURBAX LAL & CO (256 ITR 133) (P&H) 4. CHEAP CYCLE STORES VS. CIT (281 ITR 166)(ALL.) IF THE AFORESAID JUDICIAL PRONOUNCEMENTS ARE KEPT I N JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL, WE HAVE FOUND THAT IN THE PRESENT APPEAL, THE FINDING RECORDED BY THE LEARNED ASSESSING OFFICER IS CONTRA RY TO THE ARGUMENTS ADVANCED BY THE LEARNED DR TO THE EFF ECT THAT REVISED RETURN WERE FURNISHED AFTER DETECTION BY THE DEPARTMENT. IN THE CASE OF DHARMENDRA TEXTILES PROCESSORS & OTHERS ((SUPRA), RELIED UPON BY THE LE ARNED DR PERTAINS TO LEVY OF PENALTY ON THE BASIS THAT MENS REA IS NOT ESSENTIAL FOR ATTRACTING CIVIL LIABILITY OF PENALTY. HOWEVER, IN THE PRESENT APPEALS, THE ISSUE BEFORE US IS WHETHER PENALTY CAN BE LEVIED ON THE BASIS OF REVIS ED RETURN FILED BY THE ASSESSEE BEFORE ANY CONCEALMENT IS DETECTED BY THE DEPARTMENT. IN VIEW OF THESE FACT S, WE ARE OF THE VIEW, THAT THE DECISION FROM THE HON'BL E APEX COURT IS NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. EVEN OTHERWISE, PENALTY IS NOT IMPOSABLE, IF THERE IS CONSCIOUS BREACH OF LAW AS WAS HELD BY THE HON'BLE APEX COURT IN THE CASE OF HINDUSTAN STEELS LTD VS. STATE OF ORISSA (83 ITR 26). EVEN OTHERWISE, ANY CONCEALME NT OR INACCURACY, IF ANY, IN THE PARTICULARS OF INCOME H AS TO BE CONSIDERED UPTO ULTIMATE STAGE OF WORKING OUT OF TO TAL INCOME. THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SKYLINE AUTO PRODUCTS (P) LTD EVEN WENT TO THE EXTENT THAT PENALTY IS NOT IMPOSABLE WHEN MI STAKE IS BONAFIDE. EVEN IF WE PRESUME THAT THE ASSESSEE WRONGLY CLAIMED SOMETHING DUE TO CERTAIN WRONG NOTI ONS AND LATER ON REVISE THE RETURN, BEFORE IT IS DETECT ED BY THE DEPARTMENT, CERTAINLY IT IS NOT A CASE OF IMPOSITIO N OF PENALTY AND SPECIALLY WHEN THE REVISED RETURN WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. IN VIE W OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, WE ARE OF THE 12 VIEW THAT PENALTY IS NOT LEVIABLE, CONSEQUENTLY, B OTH THESE APPEALS OF THE ASSESSEE ARE ALLOWED. EVEN IN THE CASE OF PERSONS WHO ARE DEALING IN LIQU OR IT IS ALWAYS NOT POSSIBLE TO MAINTAIN THE BOOKS DAILY, IN THE REQUIRED MANNER, A S DIFFERENT SHOPS ARE LOCATED AT DIFFERENT PLACES AND THE SAME IS THE SITUATION O F SALES. EVEN OTHERWISE, KEEPING IN VIEW THE NATURE OF THE BUSINESS, THE GRO SS PROFIT/INCOME MAY NOT ALWAYS BE THE SAME. IN THE AFOREQUOTED DECISION OF NEERAJ JAIN & ALOK JAIN, THE CHANDIGARH BENCH HAS ALREADY CONSIDERED VARIOUS JUD ICIAL PRONOUNCEMENTS, BEING MATTER OF RECORD, THE SAME ARE NOT BEING REPE ATED, THEREFORE, MAY BE READ AS PART AND PARCEL OF THIS ORDER. IN THIS VIEW OF T HE MATTER, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENA LTY LEVIED U/S 271(1)(C ) OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 8 TH MARCH, 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MARCH 8 TH , 2010 COPY TO : APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-