M/S. Sanjay Transport Agencies., Burdwan V. ACIT,CIRCLE-3, ASANSOL, Asansol

ITA 1954/KOL/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54707 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MALAKAR
• Keywords: Bonafide belief; Revised return; Bonafide mistake
• Section: 271(1)(c); 143(3); 251; 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . , !' # # # # /AND $# , !' ) [BEFORE SHRI S. V. MEHROTRA, AM & SRI MAHAVIR SINGH , JM] #% #% #% #% / I.T.A NO. 1954/KOL/2008 $&' () $&' () $&' () $&' ()/ // / ASSESSMENT YEAR: 2004-05 M/S. SANJAY TRANSPORT AGENCIES VS. ASSISTANT COM MISSIONER OF INCOME-TAX, (PAN:AAVFS 6659 N) CIRCLE-3, ASANSOL (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 11.11.2011 DATE OF PRONOUNCEMENT: 25.11.2011 FOR THE APPELLANT: SHRI SUNIL SURANA FOR THE RESPONDENT: SHRI S. K. MALAKAR !/ / ORDER PER MAHAVIR SINGH, JM ( $# $# $# $#, , , , !' !' !' !' ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), ASANSOL IN APPEAL NO. 124 / CIT(A)/ASL/CIR-3/2007-08 VIDE DATED 19.08.2008. ASS ESSMENT WAS FRAMED BY ACIT, CIRCLE-3, ASANSOL U/S. 143(3) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 29.12. 2006. THE PENALTY IN DISPUTE WAS LEVIED BY ACIT, CIRCLE-3, ASANSOL U/S 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 27.06.2007. 2. THE SOLE ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING LEVY OF PENALTY BY ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. THE EFFECTIVE GROUNDS ARE NOS. 3, 4 AND 5: 3) FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY WHEN THERE WAS NO CONCEALMENT OF INCOME, THE RETURN WAS PREPARED AND FILED IN ACCORDANCE WITH THE ACCOUNTS AS CERTIFIED BY THE AUDITOR. 4) FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY WHEN THERE WAS NO CONCEALMENT, THERE WAS BONAFIDE BELIEF THAT THE INT EREST ON FD SHALL BE INCLUDED IN THE TOTAL INCOME WHEN THE BANK CREDITS THE INTEREST AND THE INTEREST INCOME WAS DULY CREDITED IN THE YEAR WHEN THE ASSESSEE GOT THE INTIMATION OF THE SAME. 5) FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY WHEN ALL THE FACTS RELATING TO THE F.DS WERE DULY DISCLOSED AND WERE ON RECORD AND THERE WAS NO CONCEALMENT OF FACTS OR THE INCOME. THE GENUINE MISTAKE WAS DULY ACCEPT ED. 2 ITA 1954/K/2008 SANJAY TRANSPORT AGENCIES A.Y.04-0 5 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS ING OFFICER NOTICED THAT THE ASSESSEE HAS INVESTED A SUM OF RS.28,38,100/- IN FDRS ON DIFFERE NT DATES BUT INTEREST ACCRUED THEREON AT RS.2,34,143/- WAS NOT DISCLOSED IN THE RETURN OF IN COME OR COMPUTATION OF INCOME. ACCORDINGLY, HE MADE ADDITION OF THIS AMOUNT OF RS. 2,34,143/-. THE RELEVANT DETAILS ARE AS UNDER: PARTICULARS AMOUNT INTEREST @ 8.25% STDR NO.729192 DTD. 26.03.02 STDR NO.729180 DTD. 22.03.02 STDR NO.729553 DTD. 30.06.02 804500 973600 1060000 2838100 66371 80322 87450 234143 THE ASSESSEE ADMITTED HIS MISTAKE AND STATED THAT D UE TO BONAFIDE MISTAKE HE COULD NOT INCLUDE THIS INTEREST INCOME AND ASSESSEE VIDE HIS LETTER D ATED 12.12.2006 ADMITTED THIS INTEREST INCOME TO BE ADDED TO THE RETURNED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR CONCEALME NT AND ISSUED NOTICE U/S. 271(1)(C) OF THE ACT. THE ASSESSEE REPLIED VIDE WRITTEN SUBMISSION DATED 15.06.2007 THAT NON-DISCLOSURE OF ACCRUED INTEREST OF FDRS IN THE RETURN OF INCOME W AS DUE TO BONAFIDE MISTAKE AND THE SAME WAS READILY ACCEPTED AND FULLY COOPERATED IN THE AS SESSMENT PROCEEDINGS BY FILING REVISED RETURN OF INCOME AND THIS SHOWS ASSESSEES BONAFIDE . THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE P ARTICULARS OF INCOME AT 100% OF TAX SOUGHT TO BE EVADED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BE FORE CIT(A), WHO CONFIRMED THE ACTION OF ASSESSING OFFICER IN LEVYING PENALTY U/S. 271(1)(C) OF THE ACT WITHOUT ANY REASONS. 4. WE HAVE HEARD BOTH THE SIDES AND FOUND THAT ASSE SSEE HAS DISCLOSED ALL THE FDRS IN ITS BALANCE SHEET IN THE ORIGINAL RETURN OF INCOME AND AT THE TIME OF START OF ASSESSMENT PROCEEDINGS EVERY DETAIL OF FDRS WERE AVAILABLE BEF ORE ASSESSING OFFICER. EVEN WHEN IT WAS POINTED OUT THAT ACCRUED INTEREST OF FDRS WAS NOT D ISCLOSED, HE REPLIED THAT ON MATURITY OF FDRS THE ASSESSEE IS TAKING THE INTEREST AS INCOME WHICH IS TO BE DISCLOSED AS AND WHEN INTEREST IS RECEIVED BUT, HOWEVER, HE AGREED FOR THE ADDITIO N OF ACCRUED INTEREST TO THE EXTENT OF RS.2,34,140/-. THE INTEREST ON FDRS ACCORDING TO H IM, THERE WAS UNDER BONAFIDE BELIEF THAT THIS IS TO BE DISCLOSED AT THE TIME OF MATURITY. NO DOU BT THE ASSESSEE IS MAINTAINING MERCANTILE SYSTEM OF ACCOUNTING BUT FOR LEVY OF PENALTY FOR CO NCEALMENT OF INCOME, THE LOWER AUTHORITIES MUST GO INTO THE FACT THAT WHETHER ASSESSEE HAS CON CEALED INCOME OR NOT. THERE SHOULD BE A DEFINITE FINDING ON THE ASPECT OF FURNISHING OF INA CCURATE PARTICULARS OF INCOME AND MERELY ON 3 ITA 1954/K/2008 SANJAY TRANSPORT AGENCIES A.Y.04-0 5 THE ADMISSION OF ASSESSEE THE PENALTY SHOULD NOT HA VE BEEN LEVIED. RECENTLY, HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF CIT V VIJAY KUMAR JAIN (2010) 325 ITR 378(CHHATTISGARH), HELD THAT NO PENALTY CAN BE LEVI ED IN THE CASE OF ESTIMATING RATE OF PROFIT AND MORE PARTICULARLY IN A CASE WHERE THE AO HAS MADE A DDITION ALTOGETHER ON DIFFERENT PREMISE AND INITIATED PENALTY QUA THAT, HONBLE HIGH COURT IN V IJAY KUMAR JAIN (SUPRA) HELD AS UNDER: THE QUESTION FOR OUR CONSIDERATION FOR DECIDING THI S APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUN AL WERE JUSTIFIED IN CANCELLING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IMPOSED BY THE ASSESSING OFFICER IN THE ADMITTED FACTS THAT THE ASSESSING OFFICER AFTER RE JECTING THE BOOK RESULTS ESTIMATED THE NET PROFIT OF THE ASSESSEE AT THE RATE OF 10 PER CENT. OF THE TOTAL RECEIPT IN THE RETURN AND ON DIFFERENCE OF PROFIT SO ESTIMATED, IMPOSED ADDITIO NAL TAX ? IN CHAIRMAN, SEBI [2006] 131 COMP CAS 591 ; [2006] 5 SCC 361, THE QUESTION BEFORE THE SUPREME COURT WAS WHETHER ONCE IT IS CONCLUSIVELY ESTABLISHED THAT A MUTUAL FUND HAS VIOLATED THE TERMS OF CERTIFICATE OF REGISTRATION AND STATUTORY REGULATIONS, THE IMPOSITION OF PENALTY BECOMES A SINE QUA NON OF THE VIOLATION. A NSWERING IN THE AFFIRMATIVE AND ALLOWING THE APPEALS, THE SUPREME COURT HELD THAT MENS REA I S NOT AN ESSENTIAL INGREDIENT FOR CONTRAVENTION OF THE PROVISIONS OF A CIVIL ACT. UNL ESS THE LANGUAGE OF THE STATUTE INDICATES THE NEED TO ESTABLISH THE ELEMENT OF MENS REA, IT IS GENERALLY SUFFICIENT TO PROVE THAT A DEFAULT IN COMPLYING WITH THE STATUTE HAS OCCURRED AND IT IS WHOLLY UNNECESSARY TO ASCERTAIN WHETHER SUCH A VIOLATION WAS INTENTIONAL OR NOT. THE BREACH OF A CIVIL OBLIGATION WHICH ATTRACTS A PENALTY UNDER THE PROVISIONS OF A N ACT WOULD IMMEDIATELY ATTRACT THE LEVY OF PENALTY IRRESPECTIVE OF THE FACT WHETHER THE CON TRAVENTION WAS MADE BY THE DEFAULTER WITH ANY GUILTY INTENTION OR NOT. IN DILIP N. SHROFF V. JOINT CIT [2007] 291 ITR 519, THE SUPREME COURT, WHILE CONSIDERING THE NATURE AND APPLICABILITY OF SECTION 271(1)(C) A ND EXPLANATION 1 THERETO, HELD THAT EVEN IF THE STATUTE SAYS THAT ONE IS LIABLE FOR PENALTY IF ONE FURNISHES INACCURATE PARTICULARS, THE SAME MAY NOT BY ITSELF BE ENOUGH TO HOLD THAT NOTH ING MORE IS NEEDED IF THE PARTICULARS FURNISHED ARE FOUND TO BE INACCURATE. AN ELEMENT OF MENS REA IS NEEDED BEFORE PENALTY CAN BE IMPOSED. CONCEALMENT AND FURNISHING INACCURATE P ARTICULARS REFER TO A DELIBERATE ACT OR OMISSION ON THE PART OF THE ASSESSEE. A MERE OMISSI ON OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSIO VERI OR SUGGESTIO FALS I. ANOTHER DIVISION BENCH OF THE SUPREME COURT, DOUBTING THE CORRECTNESS OF THE ABOVE VIEW E XPRESSED IN DILIP N. SHROFF REFERRED THE CONTROVERSY INVOLVED IN THE APPEALS TO A LARGER BE NCH. IN UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 (SC), IT WAS HELD BY THE THREE-JUDGE BENCH OF THE SUPREME COURT IN PARAGRAPH-20 THAT DILIP N. SHROFF CASE WAS NOT CORRECTLY DECIDED BUT CHAIRMAN, SEBI'S CASE HAS ANALYZED THE LEGAL POSITION IN THE CORRECT PERSPECTIVE AND ACCORDINGLY ANSWERE D THE REFERENCE. IN ATUL MOHAN BINDAL [2009] 317 ITR 1 (SC), IT HAS BEEN OBSERVED THAT IF THE ASSESSING OFFICER IS SATISFIED THAT A PERSON HAS CONCEALED TH E PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, SUCH PERSON MAY BE DIRECTED TO PAY PENALTY. IN PARAGRAPH 13, IT HAS BEEN FURTHER OBSERVED THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST. THE SUPREME COURT IN ITS LATEST DECISION IN THE MAT TER OF CIT V. RELIANCE PETROPRODUCTS P. LTD. [2010] 322 ITR 158, WHILE CONSIDERING THE APPL ICABILITY OF SECTION 271(1)(C) OF THE ACT, HELD THAT IN ORDER TO IMPOSE PENALTY UNDER THE AFO RESAID SECTION, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF INCOME OF THE ASSESS EE AND THE ASSESSEE MUST HAVE FURNISHED 4 ITA 1954/K/2008 SANJAY TRANSPORT AGENCIES A.Y.04-0 5 INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS' USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURAT E, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAI M TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHE RE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS A RE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERR ONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF , WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. IF WE EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE PRINCIPLES OF LAW LAID DOWN BY THE SUPREME COURT IN THE AFORESAID JUDGMENTS, WE FI ND THAT THE ASSESSEE FURNISHED ACCURATE PARTICULARS OF THE ENTIRE RECEIPT OF RS.21,76,274. AFTER DEDUCTION TOWARDS EXPENDITURE AND ADDITION OF NET PROFIT THROUGH OTHER SOURCES, TAXA BLE NET INCOME WAS SHOWN AT RS. 70,818. HOWEVER, SINCE THE ASSESSEE DID NOT PRODUCE ANY EVI DENCE AND BOOKS OF ACCOUNT INCLUDING THE BALANCE-SHEET FOR THE ASSESSMENT YEAR, NET PROF IT WAS ESTIMATED AT THE RATE OF 10 PER CENT. OF THE RECEIPT FROM ALL SOURCES AND ON DIFFE RENCE OF PROFIT SO ESTIMATED, ADDITIONAL TAX WAS IMPOSED AND IT WAS FURTHER DIRECTED THAT PROCE EDING UNDER SECTION 271(1)(C) OF THE ACT FOR IMPOSITION OF PENALTY BE SEPARATELY DRAWN AGAI NST THE ASSESSEE FOR CONCEALMENT OF INCOME BY NOT PRODUCING PROPER EVIDENCE OF EXPENDIT URE. TO IMPOSE PENALTY UNDER SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST ME ANING THEREBY THE ASSESSEE MUST HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME. IN THE INSTANT CASE, IT IS NOT THE CASE OF THE REVE NUE THAT THE ASSESSEE CONCEALED THE PARTICULARS OF HIS INCOME OR ANY PARTICULARS OF INC OME FURNISHED BY HIM WAS FOUND TO BE INACCURATE BY THE ASSESSING OFFICER. THE ASSESSEE D ECLARED THE NET PROFIT BY ESTIMATING IT AT THE RATE OF 6.36 PER CENT. OF HIS GROSS RECEIPT AS THE ASSESSING OFFICER IN SIMILARLY SITUATED CASES HAD ACCEPTED LOWER NET PROFIT THAN 6.36 PER CENT. DECLARED BY THE ASSESSEE. CONSIDERING THE AFORESAID FACTS, THE TRIBUNAL HELD THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN CANCELLING PENALTY CANNOT B E FAULTED WITH AND ACCORDINGLY UPHELD THE ORDER. IN OUR CONSIDERED OPINION, IN VIEW OF THE UNDISPUTE D FACTS THAT PARTICULARS FURNISHED BY THE ASSESSEE REGARDING RECEIPT IN THE RELEVANT FINANCIA L YEAR HAVE NOT BEEN FOUND INACCURATE ; IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE AS SESSEE CONCEALED ANY INCOME IN HIS RETURN, THE ORDER OF THE TRIBUNAL CONFIRMING THE ORDER OF T HE COMMISSIONER (APPEALS) CANCELLING THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE FAULTED WITH. 5. HONBLE HIGH COURT IN THE CASE OF VIJAY KUMAR JA IN (SUPRA), HAS CONSIDERED THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V . RELIANCE PETROPRODUCTS P. LTD. [2010] 322 ITR 158 AND STATED THAT THE PARTICULARS FURNISH ED BY THE ASSESSEE REGARDING RECEIPT IN THE RELEVANT YEAR HAVE NOT BEEN FOUND TO BE INACCURATE AND ASSESSEE HAS NOT CONCEALED ANY INCOME IN HIS RETURN. IN THE PRESENT CASE BEFORE US, WE F IND THAT THE ASSESSEE HAS DISCLOSED THE FDRS IN 5 ITA 1954/K/2008 SANJAY TRANSPORT AGENCIES A.Y.04-0 5 ITS BALANCE SHEET FROM WHERE THE AO CAME TO KNOW TH AT ON THESE FDRS INTEREST HAS ACCRUED TO THE ASSESSEE. THE ASSESSEE HAS FILED COMPLETE PART ICULARS INCLUDING FDR NOS. AND AMOUNT OF FDRS IN THE BALANCE SHEET AND ALSO EXPLAINED THAT I NTEREST IS NOT DISCLOSED UNDER BONAFIDE BELIEF THAT IT IS TO BE DISCLOSED IN THE YEAR OF RECEIPT. IN THESE FACTS WHETHER EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT WILL APPLY TO THE ASSESSEE OR NOT. UNDER EXPLANATION (1) TO SECTION 271(1)(C), A PRESUMPTION ARISES THAT IF ANY ADDITIO N IS MADE BY THE AO THEN THAT WILL REPRESENT THE CONCEALED INCOME OF ASSESSEE AND THE ONUS WILL BE ON THE ASSESSEE TO REBUT THE PRESUMPTION. A PRESUMPTION UNDER EXPLANATION (1) IS OBVIOUSLY AV AILABLE WHEN ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE OR IF ASSESSEE OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AN D FAILS TO PROVE THAT EXPLANATION IS A BONAFIDE EXPLANATION AND THAT ALL THE FACTS RELATING TO THE INCOME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. EXPLANATI ON (1) NO DOUBT, RAISES AN INITIAL PRESUMPTION THAT THE ADDITION REPRESENTED CONCEALED INCOME OF ASSESSEE BUT IN OUR VIEW, THAT IS NOT ABSOLUTE PRESUMPTION AND THAT CAN BE DISCHARGED BY FILING EXPLANATION QUA NON-DECLARATION OF INCOME. AS IN THE PRESENT CASE THE ASSESSEE HAS DISCLOSED COMPLETE PARTICULARS OF FDRS AND ALSO FILED EXPLANATION THAT HE WAS UNDER BONAFIDE B ELIEF THAT INTEREST IS TO BE ACCOUNTED FOR ON THE BASIS OF RECEIPTS AS IS EVIDENT FROM ACCOUNTS O F THE ASSESSEE THAT IT HAS NOT ACCOUNTED FOR IN ITS BOOKS OF ACCOUNT. 6. IN SIMILAR CIRCUMSTANCES, HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (SC) AFFIRMING THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SURESH CHANDRA MI TTAL (2000) 241 ITR 124 (MP) HAS NOTED THAT THE ASSESSEE HAD ORIGINALLY FILED RETURNS SHOW ING MEAGRE INCOME. WHEN, AFTER ACTION UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961, A NOTICE U NDER SECTION 148 WAS SERVED ON HIM, HE FILED REVISED RETURNS SHOWING HIGHER INCOME. EVENTUALLY, ASSESSMENT ORDERS WERE PASSED AND THE RETURNS SUBMITTED REGULARISED UNDER SECTION 148. IN PENALTY PROCEEDINGS UNDER SECTION 271, THE ASSESSEE CLAIMED THAT HE HAD OFFERED ADDITIONAL INC OME TO BUY PEACE OF MIND AND AVOID LITIGATION. PENALTY ORDERS WERE PASSED AND THE COMM ISSIONER (APPEALS) CONFIRMED THE ORDERS. BUT TRIBUNAL HELD THAT THE DEPARTMENT HAD NOT DISCH ARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH, AND THAT PENALTY COULD NOT BE LEVIED. O N A REFERENCE, HONBLE HIGH COURT HELD THAT NO PENALTY COULD BE LEVIED FOR CONCEALMENT. THE DEP ARTMENT PREFERRED CIVIL APPEAL TO THE SUPREME COURT AND CIVIL APPEAL WAS DISMISSED HOLDIN G THAT NO INTERFERENCE WITH THE ORDER OF THE HIGH COURT WAS CALLED FOR. IN THE PRESENT CASE BEFORE US ALSO, THE ASSESSEE HAS FILED 6 ITA 1954/K/2008 SANJAY TRANSPORT AGENCIES A.Y.04-0 5 EXPLANATION AND ACCORDING TO US, THE SAME IS A BONA FIDE EXPLANATION FOR THE REASON THAT, FIRST OF ALL, THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT TH E INTEREST ACCRUED ON FDRS IS TO BE DECLARED IN ITS RETURN OF INCOME ON RECEIPT BASIS AND NOT ON AC CRUAL BASIS. SECONDLY, ASSESSEE, AT THE TIME OF FILING OF ORIGINAL RETURN HAS DISCLOSED COMPLETE PA RTICULARS OF FDRS IN ITS RETURN. THIRDLY, ASSESSEE, RETURN FILED IN RESPONSE TO NOTICE U/S. 1 48, COMPUTED INTEREST ON ACCRUAL BASIS AND DISCLOSED IN ITS RETURN IMMEDIATELY WHEN IT WAS IN ITS KNOWLEDGE THAT THE ACCRUED INTEREST IS TO BE DISCLOSED EVERY YEAR. IN VIEW OF THESE EXPLANAT IONS, WE ARE OF THE VIEW THAT THESE EXPLANATIONS ARE BONAFIDE EXPLANATIONS AND FACTS OF ASSESSEES CASE DOES NOT ATTRACT PENALTY U/S. 271(1)(C) OF THE ACT. ACCORDINGLY, WE DELETE THE P ENALTY AND REVERSE THE ORDERS OF LOWER AUTHORITIES. APPEAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 8. ORDER PRONOUNCED IN OPEN COURT ON 25.11.2011. SD/- SD/- . . , !' $# $# $# $# , !' (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0 ) )) ) DATED : 25 TH NOVEMBER, 2011 12 $&34 $5 JD.(SR.P.S.) !/ 6 -$$ 7(8- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT M/S. SANJAY TRANSPORT AGENCIES, 42, N. S. B. ROAD, P.O. RANIGANJ, DIST. BURDWAN.. 2 -.+, / RESPONDENT, ACIT, CIRCLE-3, ASANSOL. 3 . $/& ( )/ THE CIT(A), ASANSOL 4. $/& / CIT, ASANSOL 5 . $> -$& / DR, KOLKATA BENCHES, KOLKATA . -$/ TRUE COPY, !/&?/ BY ORDER, #4 /ASSTT. REGISTRAR .