Prakesh Bhatia, Uttar Pradesh V. DCIT, New Delhi

ITA 1929/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58564 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 23-01-2012
• Assessment Year: 1994-1995
• Appeal Filed On: 19-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R R KUMARDR
• Assessee Lawyers: V K BAJAJAR
• Keywords: Revised return
• Section: 234B; 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENC H BEFORE SMT. DIVA SINGH, JM & SHRI A.N. PAHUJA, AM ITA NO.1929/DEL/2011 ASSESSMENT YEAR:1994-95 MRS. PREMILLA BHATIA,L/H OF SHRI PRAKASH BHATIA 262, SECTOR 15A, NOIDA, G.B. NAGAR, UP V/S . DC.I.T.,CIRCLE-24(1), NEW DELHI [PAN : AACPB 4649 D] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI V.K. BAJAJ,AR REVENUE BY SHRI B.R.R. KUMAR,DR DATE OF HEARING 23-01-2012 DATE OF PRONOUNCEMENT 03-02-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 19 TH APRIL, 2011 BY THE ASSESSEE AGAINST AN ORDER DATED 28 TH FEBRUARY, 2011 OF THE LEARNED CIT(A)-XXIII, NEW DE LHI, RAISES THE FOLLOWING GROUNDS:- 1) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FA CTS WHILE CONFIRMING THE PENALTY OF ` `137,180/- U/S 271(1)(C) DESPITE THAT FACT THE ASSESSEE HAD REVISED THE RETURN OF INCOME SUO-MOTO ON 29.03.1996 AND PAID TAXES THEREON SHOWING HIS BONAF IDE INTENTION WHICH HAVE BEEN IGNORED BY THE LEARNED CI T(A). 2) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FAC TS IN GIVING THE FINDINGS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME & OF THE TAXES AND HAS CONCEALED THE INCO ME WITHOUT CONSIDERING THE DOCUMENTARY EVIDENCE FILED BY THE A SSESSEE. 3) THAT THE LEARNED CIT(A) WHILE UPHOLDING THE PENA LTY ORDERS U/S 271(1)(C) HAS NOT BROUGHT ANY DOCUMENTARY EVIDENCE TO SHOW THAT THERE WAS ANY MALAFIDE INTENTION ON THE PART O F THE ASSESSEE AT ANY STAGE AND HAS IGNORED THE REVISED R ETURN OF ITA N O.1929 /DEL./2011 2 INCOME FILED BY THE ASSESSEE BY REGISTERED POST ON 29.03.1996 DECLARING INCOME OF ` ` 4,48,870/-. 4) THAT WHILE CONFIRMING THE PENALTY ORDERS OF ` `137,180/- U/S 271(1)(C), THE LEARNED CIT(A) HAS NOT CONSIDERED TH E INTIMATION DATED 17.03.1997 U/S 143(1)(A) ISSUED BY THE LEARNE D ASSESSING OFFICER ACCEPTING INCOME OF ` ` 4,48,870/- BASED ON THE REVISED RETURN OF INCOME FILED ON 29.03.1996. 5) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FAC TS IN UPHOLDING THE PENALTY AMOUNT OF ` `137,180/- AND HAS RELIED UPON THE WRONG COMPUTATION WORKED OUT BY LEARNED ASSESSING O FFICER DETERMINING THE PENALTY AMOUNT. 6) THAT THE LEARNED CIT(A) HAS NOT CONSIDERED THE S ECOND REVISED COMPUTATION OF INCOME FILED ON 27.02.2001 DECLARING INCOME OF ` ` 478,340/- ON HIS OWN MUCH BEFORE ISSUE OF NOTICE U/ S 148 DATED 10.04.2001. THAT THE ASSESSEE PRAYS FOR THE LEAVE TO ADD, AMEN D OR VARY THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE T IME OF HEARING. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE TH AT RETURN DECLARING INCOME OF ` `4,78,340/- WAS FILED ON 07.05.2001 IN PURSUANCE T O A NOTICE U/S 148 OF THE INCOME-TAX ACT,1961[HEREINAFTER REFERRED TO AS THE ACT]. IN HIS LETTER DATED 7.5.2001 FILED ALONG WITH THE RETURN, THE ASSESSEE STATED THAT THE ORIGINAL RETURN OF INCOME WAS SENT TO ITO WARD-2,DURGAPUR BY REGIST ERED POST ON 28 TH JULY, 1994 DECLARING TOTAL INCOME OF ` ` 1,72,135/- AND INCOME IN FOREIGN CURRENCY OF US DOLLAR 18,000/-. SUBSEQUENTLY, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME OF ` ` 4,78,340/-ON 27.02.2001, SINCE INCOME FROM OTHER SO URCES SUCH AS BANK INTEREST, INCOME FROM UTI, AMOUNT WITHDRAWN FR OM NSS AND INTEREST ON REFUND ON CAR DEPOSIT WAS LEFT INADVERTENTLY TO BE INCLUDED IN THE ORIGINAL RETURN INCOME . HOWEVER, DURING THE COURSE OF REASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] AFTER CONSIDERING TH E REPLY OF THE ASSESSEE OBSERVED THAT NO RETURN WAS FILED ON 27.02.2001 WH ILE REVISED COMPUTATION WAS NOT A VALID RETURN OF INCOME NOR FILED WITHIN THE T IME LIMITS PRESCRIBED UNDER THE ACT. ACCORDINGLY, WHILE OBSERVING THAT REVISED COM PUTATION ,ENHANCING THE INCOME WAS FILED ONLY AFTER PROCEEDINGS U/S 148 OF THE ACT WERE INITIATED, THE AO ITA N O.1929 /DEL./2011 3 CONCLUDED THAT BUT FOR ISSUE OF NOTICE U/S 148 OF THE ACT, DIFFERENCE OF INCOME RETURNED IN PURSUANCE TO NOTICE U/S 148 OF THE ACT AND DECLARED IN THE ORIGINAL RETURN, AMOUNTING TO ` 3,06,205/-[4,78,340-1,72,135] WOULD HAVE ESCAPED ASSESSMENT. ACCORDINGLY, THE AO ACCEPTED THE INCOME DECLARED IN THE RETURN FILED IN PURSUANCE TO NOTICE U/S 148 OF THE ACT AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) VIDE ORDER DATED 7 TH AUGUST, 2006 CONCLUDED AS UNDER:- NOW THE CONTENTIONS OF THE APPELLANT ARE NOT FOUND TO BE CORRECT AS THEY ARE NOT IN ACCORDANCE WITH LAW. IT IS SEEN TH AT THE ORIGINAL RETURN WAS FILED ON 3.8.94, THEREFORE, IT COULD HAV E BEEN REVISED AS PER SECTION 139(5) OR ON BEFORE 31.3.96 I.E. ONE YE AR FROM THE END OF RELEVANT ASSESSMENT YEAR 1994-95 OR COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER. THUS, THE ASSESSE E LOST HIS OPPORTUNITY TO REVISE THE RETURN U/S 139(5) WITHIN THE PRESCRIBED TIME LIMIT. THEREFORE, THE REVISED RETURN FILED ON 2.4. 1996 WAS NONEST RETURN AND THE SUBSEQUENT REVISION OF COMPUTATION O F INCOME VIDE LETTER DATED 27.2.2001 WAS CONSEQUENTLY AGAIN A NON EST COMPUTATION. THE ASSESSEE FURTHER CONTENDED THAT T HE RETURN FILED ON 10.4.2001 WAS IN RESPONSE TO NOTICE U/S 148 WHER EIN THE INCOME OF ` `4,78,340/- WAS DECLARED AS AGAINST THE TOTAL INCOM E DECLARED AT ` `1,72,135/- IN THE ORIGINAL RETURN. THIS DIFFERENC E OF ` `3,06,205/- WAS NOTHING BUT THE CONCEALED INCOME OF THE APPELLA NT WHICH WAS DECLARED ON ISSUANCE OF NOTICE U/S 148. AS PER LAW ONLY THIS RETURN BEING A VALID RETURN COULD HAVE BEEN TAKEN INTO ACC OUNT FOR THE PURPOSE OF ASSESSMENT AND NOT THE EARLIER REVISED R ETURNS/REVISED COMPUTATION OF INCOME, WHICH WERE NOT RETURNS IN TH E EYES OF LAW. THE ASSESSING OFFICER, THEREFORE, CORRECTLY TREATED THE DIFFERENCE OF ` `3,06,205/- AS HAVING ESCAPED ASSESSMENT AND CORREC TLY ASSESSED THE SAME U/S 143(3)/147. ACCORDINGLY HIS ACTION TO THIS EXTENT IS HEREBY UPHELD. SO FAR AS THE ASSESSEES CLAIM REGARDING CREDIT OF TAXES PAID AND THE REBATE U/S 88 IS CONCE RNED, THESE GROUNDS WERE NOT PRESSED VIDE WRITTEN ARGUMENT DATE D 7.8.2006 FOR THE REASON THAT THE APPELLANTS GRIEVANCE HAD BEEN MET OUT BY THE ASSESSING OFFICER HIMSELF BY PASSING ORDER U/S 154. SO FAR AS CHARGING OF INTEREST U/S 234A, 234B & 234C IS CONCE RNED, SINCE IT IS CONSEQUENTIAL, THE ASSESSING OFFICER IS DIRECTED TO CHARGE THE SAME AS PER LAW. ITA N O.1929 /DEL./2011 4 4. AFTER RECEIPT OF THE ORDER OF THE LD. CIT(A), I N RESPONSE TO A SHOW CAUSE NOTICE DATED 30 TH JANUARY,2008 ISSUED BEFORE LEVY OF PENALTY, THE ASSESSEE REPLIED VIDE LETTER DATED 11 TH FEBRUARY, 2008 AS UNDER:- AS PER ASSESSMENT ORDERS, THE INCREASE IN INCOME O F ` ` 306,205/- WHILE ACTUALLY THE DIFFERENCE COMES TO ` ` 29470 AS PER DETAILS GIVEN BELOW: AMOUNT (IN ` `) INCOME AS PER INTIMATION U/S 143(1)(A) 4 48870/- INCOME AS ASSESSED U/S 143(3)/148 478340/- INCREASE IN INCOME 29,470 IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAS ALREA DY FILED AN APPLICATION FOR RECTIFICATION U/S 154/155 OF THE IN COME-TAX ACT ON 8.8.2001, 18.09.2001 AND 11.02.2008 (COPY ENCLOSED) . IT IS FURTHER STATED THAT THE ASSESSEE HAD ALSO FIL ED REVISED COMPUTATION OF INCOME ON 27.2.2001 (COPY ENCLOSED) DECLARING INCOME OF ` `4,78,340/- WHICH IS THE SAME AS WAS ASSESSED BY TH E LEARNED ASSESSING OFFICER VIDE ORDERS DATED 20.7.20 01. THUS THERE WAS NO CHANGE IN INCOME BETWEEN THE INCOME DECLARED AND THE INCOME ASSESSED U/S 143(3)/147. IT IS SUBMITTED TH AT THIS INCOME OF ` ` 4,78,340/- WHICH IS THE SAME AS WAS ASSESSED BY THE LEARNED ASSESSING OFFICER VIDE ORDERS DATED 20.7.2001. THU S THERE WAS NO CHANGE IN INCOME BETWEEN THE INCOME DECLARED AND TH E INCOME ASSESSED U/S 143(3)/147. IT IS SUBMITTED THAT THIS INCOME OF ` `478,340/- WAS DECLARED BY THE ASSESSEE OF HIS OWN SUO-MOTO MUCH BEFORE THE ISSUE OF NOTICE U/S 148 ISSUED ON 1 0.4.2001. IN VIEW OF THE ABOVE FACTS AND DOCUMENTARY EVIDENCE , IT IS STATED THAT THERE IS NO CONCEALMENT OF INCOME AND IT IS PR AYED THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) BE DROPPED. 4.1 VIDE ANOTHER LETTER DATED 18.2.2008, THE ASSES SEE SUBMITTED AS UNDER: WITH REFERENCE TO OUR RECTIFICATION APPLICATION U/ S 154/155 OF THE INCOME-TAX ACT DATED 8.8.2001 & 18.09.2001, (COPY E NCLOSED), IT IS SUBMITTED THAT THE ASSESSEE HAS FILED ABOVE RECTIFI CATION APPLICATION ITA N O.1929 /DEL./2011 5 AGAINST THE ORDERS PASSED U/S 143(3)/147 DATED 20.7 .2001 FOR THE RECTIFICATION OF FOLLOWING MISTAKES WHICH WERE APPA RENT FROM RECORD. 1) WRONG CALCULATION OF INCREASE IN INCOME OF `3,06 ,205/- 2) WRONG CALCULATION OF INTEREST U/S 234A, B & C OF THE INCOME-TAX ACT. 3) NON ALLOWANCE OF CREDIT OF PREPAID TAXES OF `2,5 0,936/-. IT IS SUBMITTED THAT AS PER RECTIFICATION U/S 154/1 55 PASSED IN NOVEMBER 2001, MISTAKE RELATED TO WRONG CALCULATION OF ALLEGED CONCEALED INCOME OF ` `3,06,205/- HAS STILL NOT BEEN RECTIFIED SO FAR. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAD DECLA RED INCOME OF ` `1,72,135/- AND US$ 18,000 IN HIS ORIGINAL RETURN O F INCOME FILED ON 28.7.1994 (COPY ENCLOSED). IT IS SUBMITTED THAT AS SESSEE HAD FILED REVISED RETURN OF INCOME DECLARING INCOME OF ` `4,48,870/- WHICH WAS SENT THROUGH REGISTERED POST ON 29.3.1996 AND I NTIMATION U/S 143(1)(A) WAS ALSO RECEIVED BY THE ASSESSEE (COPY E NCLOSED). IT IS FURTHER STATED THAT THE ASSESSEE HAD ALSO PAID TAXE S MUCH BEFORE ISSUANCE OF NOTICE U/S 148 ON 10.4.2001. IT IS STATED THAT THE ASSESSEE HAD ALSO FILED REVIS ED COMPUTATION OF INCOME ON 27.2.2001 (COPY ENCLOSED) DECLARING INCOM E OF ` `4,78,340/- WHICH IS THE SAME AS WAS ASSESSED BY TH E LEARNED ASSESSING OFFICER VIDE ORDERS DATED 20.7.2001. THU S, THERE WAS NO CHANGE IN INCOME BETWEEN THE INCOME DECLARED AND TH E INCOME ASSESSED U/S 143(3)/147. IT IS SUBMITTED THAT INCO ME OF ` ` 4,78,340/- WAS DECLARED BY THE ASSESSEE OF HIS OWN SUO-MOTO MUCH BEFORE THE ISSUE OF NOTICE U/S 148 ISSUED ON 1 0.4.2001. IN VIEW OF THE ABOVE, YOU ARE REQUESTED TO PASS REC TIFICATION ORDERS U/S 154/155 CONFIRMING THE FACT THAT THERE WAS NO C ONCEALMENT OF INCOME ON PART OF ASSESSEE AND THERE WAS NO INCREAS E IN INCOME BETWEEN THE INCOME DECLARED AND ASSESSED AND DROP P ENALTY PROCEEDING U/S 271(1)(C) OF THE INCOME-TAX ACT. 5. HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION O F THE ASSESSEE ON THE GROUND THAT THE ASSESSEE CONCEALED ITS INCOME AND F URNISHED INACCURATE PARTICULARS THEREOF TO THE EXTENT OF ` ` 3,06,205/- AND ACCORDINGLY, IMPOSED A PENALTY OF ` ` 1,37,180/- @100% OF THE TAX SOUGHT TO BE EVADED ON THE INCOME OF ` `3,06,205/- ITA N O.1929 /DEL./2011 6 6. ON APPEAL, THE LEARNED CIT(A) UPHELD THE FINDIN GS OF THE AO IN THE FOLLOWING TERMS:- 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND IT IS SEEN THAT THERE IS SUBSTANTIAL DIFFERENCE BETWEEN THE RETURN FILED BY THE ASSESSEE U/S 139(1) ON 28.7.94 AND THE ONE FILED ON 2.4.96/29.3.96. THERE MERE MENTION IN THE ORIGINAL RETURN THAT USD 18000 ON ACCOUNT OF CONSULTANCY HAD BEEN RECEIVED W AS NOT ENOUGH UNTIL THE SAME IS CONVERTED AND INCLUDED IN THE TOTAL INCOME STATEMENT SO AS TO BE TAXABLE. FURTHER, THE TAXES PAID AS PER THE ORIGINAL RETURN SHOULD REFLECT THE FACT OF DISCLOSU RE, WHICH IS NOT THERE. THE TAX HAS BEEN PAID IN ACCORDANCE WITH TH E RETURNED INCOME I.E. ` `1,72,135/-. SECONDLY, IT IS ALSO A RELEVANT ISSUE THAT THE RETURN SENT ON 29.3.96 AND RECEIVED IN THE INCO ME TAX OFFICERS OFFICE ON 2.4.96 CANNOT BE DEEMED TO HAVE BEEN RECE IVED ON 29.3.96. THE DECISION OF THE CIT(A) ON THIS ISSUE HAS ALREADY BEEN AGAINST THE ASSESSEE AND THE SAME HAS BECOME FINAL. THE SECOND COMPUTATION REVISED BY THE ASSESSEE DURING THE RE-A SSESSMENT PROCEEDINGS DECLARING FURTHER INCOME OF ` ` 29,476/- CANNOT TAKE THE PLACE OF PARTICULARS FILED IN THE ORIGINAL RETURN O F INCOME. IT IS APPARENT THAT BUT FOR THE CASE GETTING REOPENED THE SE AMOUNTS WOULD NOT HAVE BEEN OFFERED FOR TAXATION BY THE ASS ESSEE. THEREFORE, THE PARTICULARS OF INCOME WITH REFERENCE TO THESE AMOUNTS HAVE ALSO BEEN FILED INACCURATE IN THE RETU RN FILED U/S 139(1). 5. THE AR OF THE APPELLANT HAS MADE A CLAIM THAT TH E ASSESSING OFFICER HAD NOT RECORDED SATISFACTION OF CONCEALMENT IN THE ASSESSMENT ORDER. IN THIS REGARD THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER HAS BEEN PERUSED AND IT IS SEEN THAT THE ASSESSING OFFICER HAS SPECIALLY RECORDED THE NATUR E OF INCOME RETURNED IN RESPONSE TO NOTICE U/S 148 INDICATES TH AT ASSESSEE DELIBERATELY AVOIDED FILING OF RETURN OF INCOME TO AVOID TAX. IT HAS FURTHER BEEN RECORDED THAT THE PENALTY PROCEEDINGS ARE BEING INITIATED SEPARATELY. THEREFORE, IT IS APPARENT TH AT THE ASSESSING OFFICER WAS SATISFIED AT THE ASSESSMENT STATE THAT PROCEEDINGS U/S 271(1)(C) NEED TO BE INITIATED. AS SUCH THE CLAIM OF THE APPELLANT IN THIS REGARD IS FACTUALLY INCORRECT AND, THEREFORE, REJECTED. 7. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. AR ON BEHALF OF THE ASSESSEE CONTENDED THAT SINCE INCOME RETURNED IN PURSUANCE TO NOTICE U/S 148 HAS BEEN AC CEPTED, THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME .THE ASSESSEE DECLARED INCOME OF ITA N O.1929 /DEL./2011 7 ` `1,72,135/- PLUS US DOLLAR 18,000 AND PAID INCOME T AX OF ` `1,04,688/- ON THIS INCOME IN THE RETURN FILED ON 3 RD AUGUST, 1994. THIS RETURN WAS REVISED ON 29.3.1996 DECLARING INCOME OF ` `4,48,870/- INCLUDING US$ 18,000 AND INCOME FROM OTHER SOURCES AND SENT TO I.T.O. DURGAPUR. TH E AO PROCESSED THEIR REVISED RETURN DECLARING INCOME OF ` 4,48,870/- ON 17.3.1997 U/S 143(1)(A) OF THE ACT A ND REFUND OF AN AMOUNT OF ` ` 19,769/- WAS DETERMINED. SUBSEQUENTLY, THE ASSESSE E FILED REVISED COMPUTATION OF INCOME ON 27.02.2001 D ECLARING INCOME OF ` ` 4,78,340/-DECLARING ADDITIONAL INCOME OF ` `29,476/- AS PER FOLLOWING DETAILS:- 1. NOTIONAL RENTAL INCOME DEEMED TO BE LET OUT 7,20 0 2. CONSULTANCY INCOME 9,600 3. INTEREST ON FDRS 8,836 4. DIVIDEND FROM UTI 3,840 29476 7.1 IT WAS FURTHER SUBMITTED THAT IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE REPLIED THAT INCOME OF ` `4,78,340/- DECLARED IN THE REVISED COMPUTATION FILED ON 27.2.2001 MAY BE ACCEPTED. THE AO ACCEPTED THE INCOME DECLARED IN THE REVISED COMPUTATION AND THUS, THERE BEING NO CONCEALMENT OF PARTICULARS OF INCOME, THE LD. CIT(A) WAS NOT JUSTI FIED IN UPHOLDING THE LEVY OF PENALTY. TO A QUERY BY THE BENCH, THE LD. AR SUBMIT TED THAT THE LD. CIT(A) IN QUANTUM APPEAL TREATED THE RETURN FILED ON 2 ND APRIL, 1996 AS NONEST AS ALSO THE REVISED COMPUTATION FILED ON 27 TH FEBRUARY, 2001 BY THE ASSESSEE. THE ASSESSEE DID NOT PREFER ANY FURTHER APPEAL AGAINST THE FINDI NGS OF LEARNED CIT(A). 8. ON THE OTHER HAND, THE LD. DR SUPPORTED THE FIN DINGS OF THE LD. CIT(A). WHILE ADMITTING THAT THE DIFFERENCE BETWEE N THE ASSESSED INCOME AND ORIGINALLY RETURNED INCOME WAS NOT ` ` 3,06,205/- BUT WAS MUCH LOWER, THE LD. DR CONTENDED THAT SINCE THE ASSESSEE DID NOT ESTABLISH BONAFIDE OF THEIR EXPLANATION FILED BEFORE THE AO, LD. CIT(A) WAS JUSTIFIED IN UP HOLDING THE PENALTY IN VIEW OF ITA N O.1929 /DEL./2011 8 DECISION OF B. A. BALASUBRAMANIAM & BROS. CO. VS. C IT 236 ITR 977 (SC) AND CIT VS. MASTER SUNIL R. KALRO,292 ITR 86(KAR). 9. IN HIS REJOINDER, THE LD. AR CONTENDED THAT RE VISE COMPUTATION FILED BY THEM HAVING BEEN ACCEPTED BY THE DEPARTMENT, THE LEVY OF PENALTY WAS NOT JUSTIFIED. MOREOVER, THE AO DID NOT RECORD HIS SAT ISFACTION BEFORE INITIATING PENALTY PROCEEDINGS AND IN THIS CONNECTION RELIED U PON DECISION IN CIT VS. RAM COMMERCIAL ENTERPRISES LTD. (2000) 246 ITR 568 (DEL HI). 10.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON BY BOTH THE SIDES. AS IS APPARENT FROM THE AFORESAID FACTS, THE AO LEVIED PENALTY U/S 271(1)(C ) OF THE ACT ON ACCOUNT OF DIFFERENCE BETWEEN INCOME ASSESSED BY HIM IN PURSU ANCE TO RETURN FILED ON 7.5.2001 IN RESPONSE TO NOTICE DATED 10.4.2001 U/S 148 OF THE ACT AND THAT DECLARED IN THE ORIGINAL RETURN FILED ON 3.8.1994 O N THE GROUND THAT THE ASSESSEE DELIBERATELY CONCEALED HIS INCOME AND FURNISHED INA CCURATE PARTICULARS THEREOF. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE PAID THE TAX ON THE INCOME RETURNED ORIGINALLY I.E. 1,72,135/- WHILE THE RETURN FILED ON 2.4.1996 AND THE SUBSEQUENT REVISION OF COMPUTATION OF INCOME VIDE LETTER DATED 27.2.2001 WAS TREATED AS NONEST IN QUANTUM APPEAL. IT IS FURTHER OBSERVED BY THE LD. CIT(A) THAT THE SECOND COMPUTATION REVISED BY THE ASSESSEE DURING T HE RE-ASSESSMENT PROCEEDINGS, DECLARING FURTHER INCOME OF ` ` 29,476/- COULD NOT TAKE THE PLACE OF PARTICULARS FILED IN THE ORIGINAL RETURN OF INCOME. ACCORDINGLY, THE LD. CIT(A) CONCLUDED THAT BUT FOR THE REOPENING THESE AMOUNT S WOULD NOT HAVE BEEN OFFERED FOR TAXATION BY THE ASSESSEE AND THEREFORE, WHILE REJECTING THE CONTENTIONS OF THE ASSESSEE IN RELATION TO RECORDIN G OF SATISFACTION, UPHELD THE LEVY OF PENALTY. WE FIND THAT THE ASSESSEE FILED RE TURN DECLARING INCOME OF ` 1,72,135/- BESIDES CONSULTANCY INCOME OF 18,000/-US DOLLARS ON 3.8.1994 AND PAID TAX OF ` 97,136/-. SUBSEQUENTLY, A REVISED RETURN WAS SENT ON 29.3.1996 AND RECEIVED BY THE AO ON 2.4.1996 WHEREIN THE ASS ESSEE DECLARED INCOME OF 4,48,870/- AND SELF ASSESSMENT TAX OF ` 1,27,000/- WAS ALSO PAID ON 29.3.1996. THIS REVISED RETURN WAS PROCESSED BY THE AO U/S 143 (1)(A) OF THE ACT ON ITA N O.1929 /DEL./2011 9 17.3.1997, ACCEPTING THE RETURNED INCOME OF 4,48,87 0/- AND CONSEQUENTLY, REFUND OF ` 19,769/- WAS DETERMINED. THUS , ALL THE PARTICULARS OF INCOME OF ` 4,48,870/- WERE ACCEPTED BY THE AO. ON 27.2.2001 , THE ASSESSEE SUO MOTU FILED A REVISED COMPUTATION OF INCOME OF 4,78,340/- ,WHICH INCLUDED INCOME OF ` 29,476/-,DETAILED IN PARA 7 ABOVE. THEREAFTER, IN O RDER TO ASSESS THIS INCOME, THE AO ISSUED A NOTICE U/S 148 OF THE ACT ON 10.4.2 001 AND ACCEPTED THE INCOME AS PER THIS COMPUTATION, VIDE HIS ORDER DATED 20.7 .2001. APPARENTLY, THE ASSESSEE HAD GIVEN ALL PARTICULARS OF HIS INCOME AND HAD DISCLOSED ALL FACTS TO THE AO BEFORE THE ISSUED OF NOTICE U/S 148 OF THE A CT.. IT IS NOT THE CASE OF THE AO THAT IN REPLY TO A QUERY OF THE AO, SOME NEW FACTS WERE DISCOVERED OR THE AO HAD DUG OUT SOME INFORMATION WHICH WAS NOT FURNISHED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT NO PENALT Y IS LEVIABLE. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AND AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF ANANTHRAMAN VEERASINGHAIAH & CO. VS. CIT, 123 ITR 457; THE FIND ING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR TH E PURPOSES OF THE PENALTY PROCEEDINGS. IT IS, THEREFORE, NECESSARY TO REAPPRE CIATE AND RECONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETHER THE ADDITION MADE I N THE QUANTUM PROCEEDINGS ACTUALLY REPRESENTS THE CONCEALMENT ON THE PART OF THE ASSESSEE AS ENVISAGED IN SEC. 271(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SAID PROVISIONS. IT IS ALSO WELL SETTL ED THAT THE CRITERION AND YARDSTICKS FOR THE PURPOSE OF IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE DIFFERENT THAN THOSE APPLIED FOR MAKING OR CONFIRMING THE ADDITION S. THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT V. M. GEORGE & BROS. [1986 ] 160 ITR 511 HELD THAT WHERE THE ASSESSEE FOR ONE REASON OR THE OTHER AGRE ES OR SURRENDERS CERTAIN AMOUNTS FOR ASSESSMENT, THE IMPOSITION OF PENALTY S OLELY ON THE BASIS OF THE SURRENDER WILL NOT BE WELL-FOUNDED. HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. SURAJ BHAN [2007] 159 TAXMAN 26 WHILE FOLLOWING THE DECISION IN CIT V. SURESH CHANDRA MITTAL [2001] 251 ITR 9 (SC), HELD THAT WHEN AN ASSESSEE FILES A REVISED RETURN SHOWING HIGHER INCO ME AND GIVES AN EXPLANATION THAT HE OFFERED HIGHER INCOME TO BUY PEACE OF MIND AND AVOID LITIGATION, PENALTY ITA N O.1929 /DEL./2011 10 CANNOT BE IMPOSED MERELY ON ACCOUNT OF HIGHER INCOM E HAVING BEEN SUBSEQUENTLY DECLARED. THE HONBLE APEX COURT IN CASE OF CIT V. SURESH CHANDRA MITTAL, [2001] 251 ITR 9/119 TAXMAN 433, U PHELD THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT RENDERED IN THE C ASE OF CIT VS. SURESH CHANDRA MITTAL [2000] 241 ITR 124, WHERE IN SIMILAR CIRCUMSTANCES IT WAS HELD THAT THE INITIAL BURDEN LIES ON THE REVENUE TO ESTA BLISH THAT THE ASSESSEE HAD CONCEALED THE INCOME HAD FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME. THE BURDEN SHIFTS TO THE ASSESSEE ONLY IF HE FAILS TO O FFER ANY EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS AN EXPLANATION WHICH I S FOUND TO BE FALSE BY THE ASSESSING OFFICER. IN CIT VS. GURU RAM DASS FRUIT A ND VEGETABLE AGENCY.,254 ITR 361(P&H),THE ASSESSEE HAD FILED THE REVISED RET URN PRIOR TO THE DATE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THE PROCEED INGS UNDER SECTION 148 OF THE ACT WERE INITIATED LONG AFTER THE ASSESSEE HAD FILE D THE REVISED RETURN. IN THESE COIRCUMSTANCES, ON THE CUMULATIVE CONSIDERATION OF VARIOUS FACTS, HONBLE HIGH COURT UPHELD THE FINDINGS OF THE ITAT, CANCELLING T HE LEVY OF PENALTY. IN THE INSTANT CASE, BEFORE THE ISSUE OF A NOTICE UNDER S ECTION 148 OF THE ACT, THE ASSESSEE HAD DISCLOSED ALL THE PARTICULARS OF INCOM E . THOUGH THE LD. CIT(A) IN QUANTUM APPEAL DECLARED THE REVISED RETURN FILED ON 2.4.1996 AND SUBSEQUENT REVISED COMPUTATION OF INCOME, NON-EST, THE AO AC CEPTED THE INCOME AS DECLARED IN THE REVISED RETURN AND COMPUTATION. THE AO DID NOT BRING ANY MATERIAL ON RECORD THAT THE DECLARATION OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURN OR HIS EXPLANATION WAS NOT BONAFIDE. IN THESE CIRCUMSTANCES, THERE APPEARS TO BE NO BASIS FOR IMPOSITION OF PENALTY ON THE GROUND THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED I NACCURATE PARTICULARS THEREOF. 10.1. AS REGARDS PLEA OF THE LD. AR REGARDING NO N- RECODING OF SATISFACTION BY THE AO IN THE REASSESSMENT ORDER BEFORE INITIATING PROCEEDINGS U/S 271(1)(C) OF THE ACT AND RELIANCE ON DECISION OF THE HONBLE DEL HI HIGH COURT IN RAM COMMERCIAL ENTERPRISES LTD.(SUPRA), THIS PLEA IS NO LONGER TENABLE IN VIEW OF PROVISIONS OF SEC. 271(1B) OF THE ACT, WHEREUNDER S UCH SATISFACTION IS NOW ITA N O.1929 /DEL./2011 11 DEEMED FOR THE PURPOSE OF PROCEEDINGS U/S 271(1)(C ) OF THE ACT. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION IN MS. MADHUSHREE GUPTA VS. UNION OF INDIA & OTHERS,183 TAXMAN 100(DELHI). THUS, RELIANCE BY TH E LD. AR ON DECISION IN RAM COMMERCIAL ENTERPRISES LTD.(SUPRA) IS TOTALLY MISPL ACED. 10.2. LIKE WISE THE PLEA OF THE LD. AR REGARDING MENSREA IS NO LONGER TENABLE SINCE THE BREACH OF CIVIL OBLIGATION WHICH ATTRACTS A PENALTY UNDER THE PROVISIONS OF AN ACT WOULD IMMEDIATELY ATTRACT THE LEVY OF PENALTY IRRESPECTIVE OF THE FACT WHETHER THE CONTRAVENTION WAS MADE BY THE DEFAULTER WITH ANY GUILTY INTENTION OR NOT, AS HELD IN CHAIRMAN, SEBI V. SHRIRAM MUTUAL FUND [2006] 131 COMP CAS 591 (SC) ; [2006] 5 SCC 361. THIS VIEW HAS BEEN REITERATED BY THE HONB LE SUPREME COURT IN THEIR DECISION DATED 29.9.2008 IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILE PROCESSORS AND OT HERS, IN CIVIL APPEAL NOS.10289 -10303 OF 2003 . IN VIEW THEREOF, GROUND NO.3 IN THE APPEAL IS DISMISSED. 10.3 AS REGARDS DECISIONS RELIED UPON BY THE LD. DR, THESE WERE RENDERED ON DIFFERENT FACTS AND ARE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US. 11. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN P ENALTY HAS BEEN IMPOSED MERELY ON THE BASIS OF REVISED INCOME WHICH WAS OFFERED B Y THE ASSESSEE TO TAX SUO MOTU, MUCH BEFORE THE ISSUE OF A NOTICE U/S 148 OF THE ACT ,WE HAVE NO ALTERNATIVE BUT TO VACATE THE FINDINGS OF THE LOW ER AUTHORITIES AND CONSEQUENTLY, CANCEL THE PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE ACT . THEREFORE, GROUND NOS.1, 2 & 4 TO 6 IN THE APPEAL ARE ALLOWED.. 12. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFOR E US IN TERMS OF RESIDUARY GROUND IN THE APPEAL, ACCORDINGLY, THIS G ROUND IS DISMISSED. ITA N O.1929 /DEL./2011 12 13. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US . 14. IN THE RESULT, APPEAL IS PARTLY ALLOWED. SD/- SD/- ( DIVA SINGH ) ( A.N. PAHUJA ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. MRS. PREMILLA BHATIA,L/H OF LATE SHRI PRAKASH BH ATIA, 262, SECTOR 15A, NOIDA, G.B. NAGAR,UP 2. D.C.I.T., CIRCLE 24 (1), NEW DELHI. 3. CIT CONCERNED. 4. CIT(A)-XXIII, NEW DELHI 5. DR, ITAT,F BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT