Shri Munalal R. Halwai, Vasco V. Income Tax Officer Ward-5, Margao

ITA 253/PAN/2013

• Counselvise Citation: 25324114 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINAY SINGH RAWAT
• Keywords: Initiation of penalty proceedings; Revised return
• Section: 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 2 53 /PNJ/201 3 : (ASST. YEAR : 200 6 - 0 7 ) MUNNALAL R. HALWAI MB - 14, 2 ND FLOOR, HSG . BOARD COLONY, BAINA, VASCO - DA - GAMA, GOA (APPELLANT) PAN : AASPH4226R VS. INCOME TAX OFFICER , W - 5, MARGAO (RESPONDENT) ITA NO. 259/PNJ/2013 : (ASST. YEAR : 2006 - 07) INCOME TAX OFFICER, W - 5, MARGAO (APPELLANT) VS. MUNNALAL R. HALWAI M/S. S.M.B. ENTERPRISES, MB - 14, 2 ND FLOOR, HSG. BOARD COLONY, BAINA, VASCO - DA - GAMA, GOA PAN : AASPH4226R (RESPONDENT) ITA NO. 254/PNJ/2013 : (ASST. YEAR : 2006 - 07) RAMCHANDRA G. HALWAI MB - 14, 2 ND FLOOR, HSG. BOARD COLONY, BAINA, VASCO - DA - GAMA, GOA (APPELLANT) PAN : AASPH6408L VS. INCOME TAX OFFICER, W - 5, MARGAO (RESPONDENT) ASSESSEE BY : PRAMOD Y. VAIDYA REVENUE BY : VINAY SINGH RAWAT , DR DATE OF HEARING : 0 6/ 0 1/201 5 DATE OF PRONOUNCEMENT : 23 / 0 1/201 5 O R D E R PER P.K. BANSAL 1. SINCE THESE APPEALS RELATE TO COMMON ISSUE, THEY ARE DISPOSED OFF BY THIS COMMON ORDER. 2 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) ITA NO S . 253 & 259 /PNJ/2013 : 2. THE SE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORDER OF CIT(A) DT. 11.7.2013 FOR THE A.Y 2006 - 07 BY TAKING THE FOLLOWING GROUNDS OF APPEAL : ITA NO. 253/PNJ/2013 : 1. THE LEARNED CIT(A) ERRED IN UPHOLDING PENALTY IN RESPECT OF ADDITION OF RS.790,719/ - BEING UNEXPLAINED UNSECURED LOANS WITHOUT APPRECIATING THE FACT THAT THE APPELLANT ACCEPTED THE ADDITION IN THE SPIRIT OF SETTLEMENT RATHER THAN CONCEALMENT, ALL THESE UNSECURED LOANS ARE EXPLAINABLE. ITA NO. 25 9 /PNJ/2013 : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE PENALTY MADE IN ADDITIONS OF RS.2,15,916/ - , RS. 14,09,286/ - , RS.6,919/ - AND RS.4,11,512/ - STATING THAT THE ASSESSEE HAS OFFERED ALL THE FINDINGS OF DISPROPORTIONATE INCOME FOR TAX D URING THE COURSE OF SURVEY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT CONSIDERING THE ABOVE FACTS. ITA NO. 25 4 /PNJ/2013 : 3. IN THE ABOVE APPEAL FILED BY THE ASSESSEE , THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED CIT(A) ERRED IN UPHOLDING PENALTY IN RESPECT OF DISALLOWANCE OF RS. 342,902 / - TOWARDS REPAIRS & MAINTENANCE WITHOUT APPRECIATING THE FACT THAT THE ADMISSION OF ADDITIONAL INCOME ON THE PART OF THE APPELLANT WAS IN SPIRIT OF SETTLEMENT RATHE R THAN ADMISSION OF CONCEALMENT. 4. THE ASSESSEE, MUNNALAL R. HALWAI HAS MOVED AN APPLICATION DT. 15.5.2015 IN ITA NO. 253/PNJ/2013 RAISING ADDITIONAL GROUND WHICH READS AS UNDER : 3 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN SUSTAINING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 LEVIED BY ASSESSING OFFICER IN RESPECT OF UNSECURED LOANS FROM RELATIVES - WHEN THE TRANSACTION WAS RECORDED IN BOOKS OF ACCOUNT AND WAS SURRENDERED AND OFFERED TO TAX IN ABSENCE OF DETAILS AT THE TIME OF SURVEY. - THE ASSESSEE ACTED BONAFIDE AND THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. 5 . AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS A LEGAL GROUND AND LEGAL GROUNDS CAN BE TAKEN , IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT, 229 ITR 383 (SC), FOR THE FIRST TIME BEFORE THE TRIBUNAL. THEREFORE, WE ADMIT THE SAME. 6 . SIMILARLY, THE FOLLOWING ADDITIONAL GROUND HA S BEEN RAISED BY THE ASSESSEE, RAMCHANDRA G. HALWAI IN ITA NO. 254/PNJ/2013 VIDE APPLICATION DT. 15.5.2015 : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN SUSTAINING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 LEVIED BY ASSESSING OFFICER IN RESPECT OF REPAIRS EXPENSES - WHEN THE TRANSACTION WAS RECORDED IN BOOKS OF ACCOUNT AND WAS SURRENDERED AND OFFERED TO T AX IN ABSENCE OF DETAILS AT THE TIME OF SURVEY. - THE RE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE AND MERE DISALLOWANCE OF CLAIM SHOULD NOT RESULT INTO PENALTY . WE NOTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS A LEGAL GROUND AND THEREFORE THE SAME IS ADMITTED ALSO IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT, 229 ITR 383 (SC) . ITA NO S . 253 & 259 /PNJ/2013 : 7. SO FAR AS THE ORIGINAL GROUND TAKEN BY THE ASSESSEE IS CONCERNED, WE NOTED THAT THE GROUND TAKEN BY THE ASSESSEE IS DULY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HON'BLE SUPREME COURT IN MAK DATA P. LTD. 4 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) VS. CIT, 358 ITR 593 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD AS UNDER : VOLUNT ARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAS TO BE ABSOLVED FROM PENALTY. THE ASSESSING OFFICER SHOULD NOT B E CARRIED AWAY BY THE PLEA OF THE ASSESSEE SUCH AS VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT, TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. WE, THEREFORE, DISMISS THE SAID GROUND. 8. NOW, COMING TO THE ADDITIONAL GROUND WHICH SURVIVES FOR OUR ADJUDICATION, WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE ASSESSEE IS PROPRIETOR OF M/S. S.M.B. ENTERPRISES ENGAGED IN THE BUSINESS OF SUPPLY OF MILK AND M ILK PRODUCTS AND GROCERY ITEMS TO THE HOTELS. RETURN DECLARING INCOME OF RS.6,23,948/ - WAS FILED ON 31.10.2006. SUBSEQUENTLY, THERE WAS A SURVEY U/S 133A ON 16.3.2007. AFTER PROCESSING OF THE RETURN U/S 143(1), NOTICE U/S 148 WAS ISSUED ON 3.12.2007. I N RESPONSE TO QUESTION NOS. 16 TO 19 ON THE BASIS OF STATEMENT RECORDED OF SHRI RAMACHANDRA G. HALWAI, THE FATHER OF THE ASSESSEE ON 16.3.2007 ADDITIONAL INCOME OF RS.28,34,352/ - WAS OFFERED FOR TAXATION FOR A.Y 2006 - 07. THE AO BROUGHT TO TAX THE ADDITION AL INCOME DETAILED AS UNDER : SL.NO. PARTICULARS AMOUNT 1 ON ACCOUNT OF CAPITAL INTRODUCED (Q.16) RS. 2,15,916 2 OUT OF PETROL & DIESEL EXPENSES NOT EXPLAINED (Q.17) RS. 14,09,286 3 AGRICULTURAL TAX CLAIMED NOT EXPLAINED (Q.18) RS. 6,919 4 VEHICLE REPAIRS AND MAINTENANCE DOUBLE CLAIM, UNEXPLAINED (Q.18) RS. 4,11,512 2 UNEXPLAINED UNSECURED LOAN TOWARDS CESSATION OF LIABILITY RS. 7,90,719 TOTAL ADDITIONAL INCOME OFFERED TO TAX RS.28,34,352 5 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1 )(C) BY MENTIONING IN THE ASSESSMENT ORDER ISSUE AO, DN & CHALLAN & PEN. NOTICE U/S 271(1)(C). NOTICE ISSUED U/S 271(1)(C) DT. 29.12.2008 ASKED THE ASSESSEE TO EXPLAIN WITHIN 7 DAYS OF RECEIPT OF THE NOTICE WHY PENALTY SHOULD NOT BE IMPOSED ON HIM U/S 2 71(1)(C) AS YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. SUBSEQUENTLY, WE NOTED THAT THE AO IMPOSED THE PENALTY ON THE ASSESSEE U/S 271(1)(C) BY OBSERVING AS UNDER : 3. I HAVE CAREFULLY CONSIDERED THE EXPLANATION OFFERED BY THE ASSESSEE. HOWEVER, THE SAME IS NOT CONVINCING. IT IS SEEN FROM THE RECORDS THAT THE ASSESSEE HAS NOT PROVED THAT HE HAS NOT FURNISHED INACCURATE PARTICULARS OR CONCEALED PARTICULARS OF HIS INCOME. ON PERUSAL OF SWORN STATEMENT RECORDED DURING THE COURSE OF SURVEY, IT IS NOTICED THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCE OF CAPITAL OF RS.2,15,916/ - INTRODUCED AND DETAILS OF UNSECURED LOANS TO THE EXTENT OF RS.7,90,719/ - INTRODUCED DURING THE PREV IOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. SIMILARLY, IT WAS FOUND THAT THE ASSESSEE HAD DEBITED BOGUS EXPENDITURE TO THE PROFIT & LOSS ACCOUNT, WHICH HE WAS NOT ABLE TO PROVE AS GENUINE EXPENDITURE . HENCE, HE OFFERED THE SAME FOR TAXAT ION. THE ASSESSE E S CONT E NTION THAT H E HAS VOLUNTARILY DECLARED ADDITIONAL INCOME , IS NOT ACCEPTABLE AS THE ADDITIONAL INCOME HAS BEEN OFFERED BY THE ASSESSEE ONLY AFTER S URVEY WHICH IS ONE OF THE MODE OF INVESTIGATION. SECONDLY, IF THE ASSESSE E H AD NO INT ENTION TO CONCEAL THE INCOME AND EVADE TAX ON THE SA M E HE SHOULD HAVE IM MEDIATELY AF T ER SUR VE Y FILED REVISED RETURN O F INCOME DECLARING ADDITIONAL INCOME OFFERE D AT THE TIME SURVEY. EVEN IN RESPONSE TO NOTICE U /S 14 8 , HE HAS NOT FILED RETURN OF INCOME DECL ARING THE ADDITIONAL INCOME OFFERED AT TH E TIME OF SURVEY. THUS, IT IS CLEAR THAT THE ADDITIONAL INCOME ASSESSED TO TAX IS ONLY ON ACCOUNT OF SURVEY AND SCRUTINY OF THE CASE. EVEN DURING THE COURSE OF PRESENT PROCEEDING, THE ASSESSEE HAS NOT PROVED THAT HE HAS NOT CONCEALED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. 4. IT IS CLEAR FROM THE ABOVE FACTS THAT THE ASSESSEE DID NOT DISCLOSE THE CORRECT AND TRUE INCOME IN THE RETURN OF INCOME FILED BY HIM ON 31/10/2006 AND THEREBY CONCEALED THE PARTICULARS OF HIS INCOME. THE ASSES S EE HAS FAILED TO PROVE THAT HE HAS N O T FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND CONCEALED THE PARTICULARS OF HIS INCOME. THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TE XTILE PROCESSORS (2008) 306 IT R 277(S C ) HAS HELD THAT: I. THE EXPLANATIONS TO SECTION 271(L )(C) INDICATE THE ELEMENT OF STRIC T LIA B I L ITY ON THE ASSESSEE FOR CONCEALMENT OF INCOME OR GIVING INACCURATE PARTICULARS WHILE FILING THE RETURN. 6 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) II. THE SEC T ION 27L(1 )(C) HAS BEEN ENACTED TO PROVIDE REMEDY FOR LOSS OF REVENUE . III. THE PENALTY U /S.27L (1)(C) IS A CIVIL LIABILITY. WILLFU L CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR A TTRACTING CIVIL LIABILITY, AS IN THE CASE OF PROSECUTION U/S 276C. 5. IN VIEW OF THE ABOVE DISCUSSION , I AM SATISFIED THAT THE ASSESSEE HA S C ONCEALED THE PARTICULARS OF HIS INCOME AND I S LIABLE FOR PENALTY U/S.271(1) (C) OF THE INCOME TAX ACT, 1961. AC C OR D INGLY, I IMPOSE MINIMUM PENALTY OF RS.9,54,042/ - AS AGAINST MAXIMUM PENALTY OF RS.28,62,126/ - UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961. WE NOTED THAT THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). CIT(A) SUSTAINED THE PENALTY IN RESPECT OF ADDITION MADE ON ACCOUNT OF SURRENDER FOR UNEXPLAINED SECURED LOANS AMOUNTING TO RS. 7,9 0 ,719/ - . 9. WE HAVE GONE THROUGH THE PROVISIONS OF SEC. 271(1)(C). WE NOTED THAT PENALTY U/S 271(1)(C) IS LEVIABLE IF AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THE INCOME TAX ACT THAT ANY PERSON HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. FROM THE ASSESSMENT ORDER WE NOTED THAT THERE IS NO INDICATION WHICH SPEAKS OF AO BEING SATISFIED DURING THE COURSE OF THE ASSESSMENT THAT THE ASSESSEE HAS COMMITTED DEFAULT AS STIPULATED U/S 271(1)(C). NO DOU BT, LEGISLATURE HAS INSERTED SUB - SECTION (1 B ) IN SEC. 271 BY FINANCE ACT, 2008 W. R. E.F. 1.4. 1989 PROVIDED THAT DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE ORDER OF ASSESSMENT SHALL BE DEEMED TO CONSTITUTE SUCH SATISFACTION. IN THE ASSESSMENT WE FIND THAT THERE IS NO SUCH DIRECTION. DIRECTION IS GIVEN ONLY TO THE STAFF TO ISSUE AO, DN & CHALLAN & PEN. NOTICE U/S 271(1)(C). THIS, IN OUR OPINION, DOES NOT TANTAMOUNT TO A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) AS THE AO HA S NOT UTTERED ANYTHING IN THE ASSESSMENT ORDER IN THIS REGARD. THE ACTION OF THE AO, IN OUR OPINION, IS TOTALLY ILLEGAL AND DOES NOT MEET THE REQUIREMENT OF SEC. 271(1)(C) EVEN AFTER THE AMENDMENT MA DE BY THE FINANCE ACT, 2008. I N THE CASE OF M S. MADHUSHREE G UPTA BRITISH AIRWAYS PLC 7 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) VS. UNION OF INDIA, 317 ITR 107 (DEL) , THE SCOPE OF AMENDMENT WAS EXPLAINED BY THE HON'BLE DELHI HIGH COURT AS UNDER : IN OUR OPINION, THE IMPUGNED PROVISION ONLY PROVIDES THAT AN ORDER INITIATING PENALTY CANNOT BE DECLARED BAD IN LAW BECAUSE IT STATES THE PENALTY PROCEEDINGS ARE INITIATED, IF OTHERWISE IT IS DISCERNIBLE FROM RECORD THAT THE AO HAS ARRIVED AT PRIMA FACIE SA TISFACTION FOR INITIATION OF PENALTY PROCEEDINGS. THE ISSUE IS OF DISCERNIBILITY OF THE SATISFACTION ARRIVED AT BY THE AO DURING THE COURSE OF PROCEEDING BEFORE HIM. THE PRESENCE OF PRIMA FACIE SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS WAS AN D REMAINS A JURISDICTIONAL FACT WHICH CANNOT BE WISHED AWAY AS THE PROVISION STANDS EVEN TODAY, I.E. POST AMENDMENT. IF THERE IS NO MATERIAL TO INITIATE PENALTY PROCEEDINGS; AN ASSESSEE WILL BE ENTITLED TO RECOURSE TO A COURT OF LAW. 10. THIS IS THE S ETTLED LAW THAT THE PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT. THE PENALTY PROCEEDINGS CAN BE INITIATED ON TWO CHARGES I.E. I) CONCEALMENT OF PARTICULARS OF INCOME AND II) FURNISHING OF INACCURATE PARTICULARS OF INCOME. BOTH THE CHARGES ARE ENTIRELY DIFFERENT. IF THE PROCEEDINGS ARE INITIATED ON CHARGE OF CONCEALMENT, THEN PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND VICE VERSA. THUS, THERE MUST BE A CLEAR FINDING ABOUT THE CHARGE FOR WHICH PENALTY IS IMPOSED OR INITIATED. IT IS INCUMBENT UPON THE AO TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME O R FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH FINDINGS, THE ORDER WOULD BE BAD IN LAW. THE CASE OF NEW SORATHIA ENGINEERING CO. LTD., 282 ITR 642, HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER: - IT IS INCUMBENT UPON THE ASS ESSING OFFICER TO STATE WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASSESSEE. HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE COM MISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRIBUNAL HAD FAILED TO APPRECIATE THIS LEGAL ISSUE. THE RATION IN CIT V. MANU ENGINEERING WORKS 132 ITR 306 (GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT BE UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. 8 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) IN THE CASE OF COMMISSIONER OF INCOME TAX V. RAJAN AND CO., 291 ITR 340 (DEL), WHEREIN IT IS HELD THAT THE PROVISION OF SECTION 271 (1) (C) OF THE INCOME TAX 1961 WOULD REQUIRE PROPER APPLICATION OF MIND AND RECORDING OF AT LEAST A BARE MINIMUM OPINION ON THE PART OF AO THAT A CASE FOR INITIATION OF PENALTY PROCEEDING WAS MADE AS THERE WAS CONCEALMENT OF INCOME OR THAT INCORRECT PARTICULARS HAD BEEN FURNISHED BY THE ASSESSEE WITH THE INTENTION TO AVOID PAYMENT OF TAXES. TH IS VIEW IS SUPPORTED BY VARIOUS DECISIONS OF HIGH COURT THEREFORE IT IS NOT NECESSARY TO DISCUSS THE OTHER JUDGMENT ON THE ISSUE. 11. AO HAS NOT MADE OUT ANY S P E C I F I C CHARGE EITHER OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY U/S 271(1) (C) CAN BE LEVIED FOR EITHER OF THE CHARGE. THE PENALTY ORDER SIMPLY STATES THAT PENALTY IS ATTRACTED ON THIS ADDITION AS IT IS MANDATORY AND AUTOMATIC. IT DOES NOT STATE FOR WHAT DEFAULT PENALTY IS LEVIED S EC . 271(1) (C) (II I) IS EXPRESSLY CLEAR THAT THE PENALTY CAN BE LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS THE PARTICULARS OF INCOME WHICH IS THE COMMON SUBJECT MATTER OF BOTH THE CHARGES. THE WORD CONCEAL AS P ER WEBSTERS DICTIONARY MEANS TO HIDE, WITHDRAW, OR REMOVE FROM OBSERVATION; COVER OR KEEP FROM SIGHT; TO KEEP SECRET; TO AVOID DISCLOSING OR DIVULGING. THAT MEANS NON DISCLOSURE OF PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE PARTICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. FOR EXAMPLE, IN CASE OF BUSINESSMAN, IF A PARTICULAR TRANSACTION OF SALE IS NOT SHOWN IN THE BOOKS, IT WOULD AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME WHILE SALE IS SHOWN BUT AT A LESSER VALUE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 9 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) 12. IT IS PERTINENT TO NOTE THAT THRUST OF THE LEGISLATURE IS UPON THE PARTICULARS OF INCOME WHICH ARE EITHER CONCEALED OR FURNISHED INACCURATELY BY THE ASSESSEE. THEREFORE, ON E MUST UNDERSTAND THE MEANING OF THE WORDS PARTICULARS OF INCOME. THE INCOME TAX TRIBUNAL HAD TO CONSIDER THE MEANING OF THE EXPRESSION FURNISHING OF INACCURATE PARTICULARS OF INCOME APPEARING IN SECT ION 271(1) (C) IN THE CASE OF KANBAY SOFTWARE INDIA (P) LTD, 122 TTJ 721 (PUNE). IT WAS HELD THAT THE EXPRESSION PARTICULAR REFERS TO FACTS, DETAILS, SPECIFICS OR THE INFORMATION ABOUT SOMEONE OR SOMETHING. THUS, THE DETAILS OR INFORMATION ABOUT THE INCO ME WOULD DEAL WITH FACTUAL DETAILS OF INCOME AND CANNOT BE EXTENDED TO AREAS WHICH ARE SUBJECTIVE SUCH AS STATUS OF THE TAXABILITY OF AN INCOME ADMISSIBILITY OF A DEDUCTION AND INTERPRETATION OF LAW. ACCORDINGLY, IT WAS HELD THAT MERE REJECTION OF A LEGAL CLAIM WOULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THIS VIEW IS FORTIFIED BY THE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS, 322 ITR 158 SC. IN THIS CASE, THE CLAIM OF ASSESSEE U/S 36(1) (III) WAS REJECTED BY THE AO AND THE ORDER OF AO WAS UPHELD BY THE TRIBUNAL. AS A RESULT THEREOF, THE PENALTY U/S 271(1) (C) WAS IMPOSED ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY WAS HELD TO BE ILLEGALLY IMPOSED BY THE TRIBUNAL SINCE FACTUAL DETA ILS OF INCOME FURNISHED BY THE ASSESSEE WERE FOUND TO BE CORRECT. THE MATTER ULTIMATELY REACHED THE SC AND THE HONBLE COURT UPHELD THE VIEW OF THE TRIBUNAL BY HOLDING THAT MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT A MOUNTING TO FURNISHING INACCURATE CLAIM OF FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 13. EXPLANATION 1 TO SECTION 271(1) (C) CANNOT BE APPLIED WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF IN COME SINCE IT PROVIDES A DEEMING FICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY 10 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) AND CONSEQUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME. 14. ON THE OTHER HAND, WHERE CHARG E AGAINST THE ASSESSEE IS F U R N I S H I N G I N A C C U R A T E PARTICULARS OF INCOME, THE AO HAS TO ESTABLISH EITHER THAT ASSESSEE HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISIONS OR THE CASE OF ASSESSEE FALLS WITHIN THE SCOPE OF THE DEEMING FICTIONS CREATED UNDER THE EXPLANATIONS. FOR EXAMPLE, THE ASSESSEE MIGHT NOT DISCLOSE PARTICULAR SALES OR DIVIDEND INCOME OR INCOME FROM ANY SOURCE. SUCH INSTANCES WOULD FALL UNDER THE MAIN PROVISIONS ITSELF. IN SUCH CASES, THE BURDEN IS ON THE AO TO ESTABLISH TH E EXISTENCE OF THE CHARGE ON THE BASIS OF MATERIAL ON RECORD. 15. EXPLANATION 1 TO SECTION 271(1) (C) STATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE ONE BUT IS REBUTTABLE ONE. IT ONLY SHIFTS THE ONUS ON THE ASSESSEE. EXPLANATION 1 REFERS TO THE TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICULARS OF INCOME IS DEEMED. IT I S NOT APPLICABLE WHERE THE CHARGE AGAINST THE ASSESSEE IS FURNISHING INACCURATE PARTICULARS OF THE INCOME. THE FIRST SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME FAILS TO OFFER AN EXPLANATION OR OFF ERS AN EXPLANATION, WHICH IS FOUND BY THE AO OR THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH, THE ASSESSEE IS NOT ABLE TO SUBST ANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION WAS BONA FIDE ONE AND THAT ALL THE FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESUMPTION AVAILABLE UNDER EXPLANATION TO SECTION 271(1) (C), CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES (A) OR (B). 11 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) 16. IN THIS CASE, THE AO HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE U/S 271(1) (C) OF THE ACT. HE HAS NOT BROUGHT OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. 17. IN THE CASE OF THE ASSESSEE, THE AO HAS NOT INITIATED THE PROCEEDINGS FOR ANY PARTICULAR CHARGE. THE PENALTY WAS INITIATED VIDE IS SUE OF NOTICE DT. 29 .12.2008. THE NOTICE READS AS UNDER: - WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2006 - 07 IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 18. THE AO IN THIS CASE INITIATED THE PENALTY WITHOUT ANY MENTION OF ANY PARTICULAR DEFAULT AND LEVIED THE SAME AGAIN WITHOUT MENTIONING ANY SPECIFIC CHARGE. IN CIT V. ATUL MOHAN BINDAL (2009) 9 SCC 589, WHERE HONBLE SUPREME COURT WAS CONSIDERI NG THE SAME PROVISION, IT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THUS THE SATISFACTION OF THE AO ABOUT THE CONCEALMENT OF PARTICU LARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME IS ESSENTIAL BEFORE LEVYING ANY PENALTY U/S 271(1) (C). THE AO AS IS APPARENT FROM THE PENALTY ORDER HAS NOT SATISFIED ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INA CCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. ON THIS BASIS ITSELF THE PENALTY STAND DELETED. 19. THE AO AS IS APPARENT FROM THE PENALTY ORDER SIMPLY RELIED ON THE DECISION OF UNION OF INDIA VS DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 AS WEL L AS DILIP N SHROFF V JCIT 291 ITR 519 AND TOOK THE VIEW THAT THE LEVY OF 12 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) THE PENALTY IS AUTOMATIC AND MANDATORY AND ACCORDINGLY IMPOSED THE PENALTY WITHOUT BRINGING ON RECORD WHAT DEFAULT STATED U/S 271(1) (C) WAS COMMITTED BY THE ASSESSEE. IN THE CASE O F DHARMENDRA TEXTILES PROCESSORS (SUPRA), THE HONBLE SUPREME COURT HAS HELD THAT PENALTY U/S 271(1) (C) IS A CIVIL LIABILITY AND THAT WILFUL CONCEALMENT AND MEANS REA ARE NOT ESSENTIAL INGREDIENTS FOR ATTRACTING THE CIVIL LIABILITY AS IS THE CASE IN T HE MATTER OF PROSECUTION U/S 276 OF THE ACT. IT HAS FURTHER BEEN HELD IN THAT CASE THAT MENS REA IS NOT AN ESSENTIAL INGREDIENT FOR IMPOSING THE PENALTY. THE HONBLE SUPREME COURT IN THIS CASE NOWHERE HELD THAT IF THE ADDITION IS MADE, PENALTY IS AUTOMATI C. EVEN IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS REPORTED IN (2008) 306 ITR 277 (SC), THE SUPREME COURT HAS OBSERVED THAT THE FINDING AS TO SUPPRESSION OR INACCURATE PARTICULARS IN THE RETURN ARE NECESSARY FOR ATTRACTING THE PENAL PROVISION UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961. THIS JUDGMENT DOES NOT OVERRULE THE EXPLANATIONS APPENDED TO SECTION 271(1) (C). IT EVEN HELD THAT THE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1) (C) READ WITH EXPLANATIONS INDICATES THAT THE SAID SECTIO N HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. THUS, THE RATIO LAID DOWN IN THIS JUDGMENT WAS CONFINED TO TREATING THE WILFUL CONCEALMENT IS NOT ESSENTIAL FOR IMPOSING THE PENALTY U/S 271(1) (C) OF THE ACT. WHERE AN ASSESSEE GENUINELY MAKES A CLAIM FOR A PARTICULAR DEDUCTION BY DISCLOSING ALL THE NECESSARY FACTS RELATING TO THE SAME, THAT CANNOT BE REGARDED TO BE CONCEALMENT EVEN IF THE ASSESSEES CLAIM IS REJECTED. THIS IS THE SETTLED LAW THAT PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND, THEREFORE, IF ANY ADDITION IS MADE, IT DOES NOT MEAN THAT THE PENALTY WILL AUTOMATICALLY BE LEVIED. IN THE CASE OF THE ASSESSEE, WE NOTED THAT THE ASSESSEE DURING THE COURSE OF THE SURVEY HIMSELF SURRENDERED CERTAIN EXPENSES AND UNSECURED LOAN AS ITS INCOME ALTHOUGH THESE EXPENSES AND UNSECURED LOANS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS NOT A CASE WHERE THE REVENUE GOT EVIDENCE THAT THE 13 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) EXPENDITURE RECORDED AND THE UNSECURED LOANS ARE BOGUS. IN THE PENALTY PROCEEDINGS THE ASSESSEE IS GIVEN AN OPPORTUNITY TO EXPLAIN HIS CASE IF HE SUCCESSFULLY EXPLAINS HIS POSITION AND IS NOT TRAPPED WITHIN THE PARAMETERS OF SECTION 271(1) (C) ALONG WITH THE EXPLANA TIONS DEEMING THE CONCEALMENT OF INCOME, PENALTY CANNOT BE IMPOSED. IN THIS CASE, THE PENALTY HAS BEEN IMPOSED MERELY OBSERVING THAT THE PENALTY IS AUTOMATIC AND MANDATORY. SECTION 271(1) (C) DEALS WITH THE TWO SITUATIONS FOR IMPOSING THE PENALTY; HAS CONC EALED THE PARTICULARS OF HIS INCOME; OR HAS FURNISHED THE INACCURATE PARTICULARS OF SUCH INCOME. EXPLANATION 1 IS APPLICABLE ONLY IN CASE OF FIRST SITUATION I.E. AMOUNT ADDED OR DISALLOWED IN THE TOTAL INCOME BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED. 20. NOW THE QUESTION ARISES WHETHER IN THIS CASE CAN ONE SAY THAT THE ASSESSEE HAS FILED IN ACCURATE PARTICULARS OF INCOME. INACCURATE PARTICULARS MEANS THAT THE PARTICULARS ARE INCORRECT OR NOT ACCURATE OR NOT CORRECT. THAT MEANS, THE PARTICULARS HAVE NOT BEEN FURNISHED IN CORRECT/EXACT MANNER AS IS REQUIRED TO BE FURNISHED TO DETERMINE THE CORRECT INCOME CHARGEABLE TO TAX OF THE ASSESSEE. 21. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M. S. BINDRA & SONS P. LTD 336 ITR 125 (DELHI) HAS OBSERVED AS UNDER IN RESPECT OF DHARMENDRA TEXTILES PROCESSOR DECISION AND DILIP N SHROFF DECISION AS RELIED BY THE A.O.: - IN FACT, SECTION 271(1) (C) CAME TO BE INTERPRETED BY THE APEX COURT IN DHARMENDRA TEXT ILE PROCESSORS CASE (SUPRA). THE THREE JUDGE BENCH OF THE APEX COURT OVER - RULED THE DECISION IN DILIP N. SHROFF V. JT. CIT (2007) 291 ITR 519 (SC) AND APPROVED THE DECISION IN CHAIRMAN, SEBI V. SHRIRAM MUTUAL FUND (2006) 5 SSC 361. IN THE SAID CASE, THE SU PREME COURT HELD: - 27. THE EXPLANATION APPENDED TO SECTION 271(1) (C) OF THE INCOME - TAX ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING THE RETURN. THE JUDGMENT IN DI LIP N. SHROFFS CASE (2007) 8 SCALE 304 (SC) HAS NOT CONSIDERED THE EFFECT 14 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) AND RELEVANCE OF SECTION 276C OF THE INCOME TAX ACT. THE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1) (C) READ WITH THE EXPLANATIONS INDICATES THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276C OF THE INCOME - TAX ACT. 22. THE AFORESAID DECISION H AS TAKEN NOTE OF IN CIT V. RELIANCE PETROPRODUCTS (P) LTD. (2010) 322 ITR 158 (SC). WHILE CONSIDERING THE PHRASE CONCEALMENT OF PARTICULARS, THE APEX COURT REFERRED TO SECTION 271 AND HELD AS FOLLOWS: - 9. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271 (1) (C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND T O BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF V. JOINT CIT (2007) 6 SSC 329, THIS COURT EXPLAINED THE TERMS CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(1) (C), MENS REA WAS NECESSARY, AS ACCORDING TO THE COURT, THE WORD INACCURATE SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) (C) PROVIDED FOR A DISCRETIONARY JURI SDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TERM INACCURATE PARTICULARS WAS NOT DEFINED ANYWHERE IN THE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING INACCURATE PARTICULARS, IT WAS FURTHER HELD THAT THE AO MUST BE F OUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N. SHROFF V. JOINT CIT WAS UPSET. IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS AFTER QUOTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTION 271(1) (C), THE COURT CAME TO THE CONCLUSION THAT SINCE SECTION 271(1) (C) INDICATED THE ELEMENT OF STRICT LIABILITY ON TH E ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NOT NECESSITY OF MENS REA. THE 271(1) (C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENA LTY WAS A CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N SHROFF V. JOINT CIT WAS OVERRULED BY THIS COURT IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1) (C) AND SECTION 276C OF THE ACT WAS LOST SIGHT OF IN THE CASE OF DILIP N SHROFF V. JOINT C IT. HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS, NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHROFF V. JOINT CIT, WHERE THE 15 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) COURT EXPLAINED THE MEANING OF THE TERMS CONCEAL AND INACCURATE. I T WAS ONLY THE ULTIMATE INFERENCEIN DILIP N. SHROFF V. JOINT CIT TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 271(1) (C) THAT THE DECISION IN DILIP N. SHROFF V. JOINT CIT WAS OVERRULED. 23. FROM THE PERUSAL OF THE AFORESAID DECISIONS, IT IS APPARENT THE IN NONE OF THE DECISION OF HONBLE SUPREME COURT AS RELIED BY THE AO, IT HAS BEEN HELD THAT THE PENALTY U/S 271 (1) (C) IS MANDATORY OR AUTOMATIC WHEREVER THE ADDITION OR DISALLOWANCES ARE MAD E BY THE AO. THE ASSESSING OFFICER MERELY OBSERVED THAT THE PENALTY IS MANDATORY AS HE WAS FULLY AWARE OF THAT NO CHARGE AS SPECIFIED U/S 271 (1) (C) WAS LEVIABLE AGAINST THE ASSESSEE. ON THIS BASIS ALSO, THE PENALTY WAS WRONGLY LEVIED JUST FOR THE PURPOSE OF LEVYING THE PENALTY . WE, ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND DELETE THE PENALTY IMPOSED U/S 271(1)(C). 24 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED WHILE THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ITA NO. 25 4 /PNJ/2 013 : 25. SO FAR AS ORIGINAL GROUND IS CONCERNED, WE NOTED THAT THE GROUND TAKEN BY THE ASSESSEE IS DULY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HON'BLE SUPREME COURT IN MAK DATA P. LTD. VS. CIT, 358 ITR 593 (SC) ( SUPRA ) WHEREIN THE HON'BLE SUPREME COURT HAS HELD AS UNDER : VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAS TO BE ABSOLVE D FROM PENALTY. THE ASSESSING OFFICER SHOULD NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE SUCH AS VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT, TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFER ED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. WE, THEREFORE, DISMISS THE SAID GROUND. 16 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) 26. AS REGARDS THE ADDITION A L GROUND TAKEN BY THE ASSESSEE, BOTH THE PARTIES AGREED THAT THE ISSUE INVOLVED IS SIMILAR TO THE ISSUE INVOLVED IN ITA NO. 253/PNJ/2013 IN THE CASE OF MUNNALAL R. HALWAI AND IN THIS CASE ALSO PENALTY HAS BEEN INITIATED BY THE AO U/S 271(1)(C) JUST BY GIVING DIRECTION TO THE STAFF AND BY ISSUING NOTICE DT. 29.12.2008 IN THE SAME MANNER IN WHICH NOTICE HAS BEEN ISSUED IN THE CASE OF MUNNALAL R. HALWAI. BOTH THE PARTIES AGREED THAT SINCE LEGAL ISSUE INVOLVED IN THE ADDITIONAL GROUND IS COMMON AS HAS BEEN TAKEN IN THE CASE OF MUNNALAL R. HA LWAI, WHATEVER VIEW THIS TRIBUNAL MAY TAKE IN THE CASE OF MUNNALAL R. HALWAI IN ITA NO. 253/PNJ/2013, SAME VIEW MAY BE TAKEN IN THIS CASE ALSO. 27. WE HAVE ALREADY ALLOWED THE APPEAL OF THE ASSESSEE IN THE CASE OF MUNNALAL R. HALWAI BEING ITA NO. 253/PN J/2013. WE, THEREFORE, RESPECTFULLY FOLLOWING OUR FINDING IN THE CASE OF MUNNALAL R. HALWAI DELETE THE PENALTY IMPOSED IN THIS CASE ALSO ON THE BASIS OF THE SAME REASONING AS HAS BEEN GIVEN IN THE PRECEDING PARAGRAPHS IN ITA NO. 253/PNJ/2013. 28. IN THE RESULT, BOTH THE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE ALLOWED WHILE THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 29. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 /01/2015. S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 2 3 /01/2015 *SSL* 17 ITA NOS. 253, 254 & 259/PNJ/2013 (A.Y 2006 - 07) COPY TO : (1) APPELLANTS - MUNNALAL R. HALWAI, RAMCHANDRA G. HALWAI , ITO, MARGAO (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER