Suresh Chand Laxmi Chand, NEEMUCH V. ITO, CHITTORGARH

ITA 283/JODH/2012

• Counselvise Citation: 28323314 RSA 2012
• Duration Of Justice: 2 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 16-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Revised return
• Section: 40A(3); 133A; 68; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA , JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 283 / JU/ 20 1 2 ASSESSMENT YEAR: 200 2 - 0 3 SHRI SURESH CHAND LAXMI CHAND SUTHAR VS. THE INCOME - TAX OFFICER KESUNDA, CHOTI SADRI WARD - 3 CHITTORGARH CHITTORGARH PAN NO. BJLPS 3509 R (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI N.R. MERTIA DEPARTMENT B Y : SHRI N.A. JOSHI , DR DATE OF H EARING : 1 5 . 0 7 .201 4 DAT E OF PRONOUNCEMENT : 25 . 0 7 . 201 4 ORDER PER HARI OM MARATHA , J .M. TH IS APPEAL BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE CIT (A) , UDAIPUR DATED 2 8 . 0 5 .20 1 2 PERTAINING TO A.Y 200 2 - 20 0 3 AND EMANATES FROM THE PENALTY ORDER DATED 27.6.2011 PASSED BY THE ITO, WARD - 3, CHITTORGARH U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 ['THE ACT', FOR SHORT] . 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT AS PER THE INFORMATION RECEIVED FROM THE EXCISE DEPARTMENT RATLAM [M.P.] THE ASSESSEE DEPOSITED A LICENSE FEE OF RS. 1,16,05,000/ - WITH THE EXCISE DEPARTMENT, RATLAM FOR SEEKING POPPY STRAW LICENSE FOR THE F.Y. 2001 - 02 RELEVANT TO A.Y. 2002 - 03. THE ASSESSEE WAS NOT FILING RETURN OF INCOME [ROI]. THEREFORE, A NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESS EE AFTER RECORDING THE REASONS. THE ASSESSEE DID NOT FILE ANY DETAILS AND THE A.O. PASSED ORDER U/S 144 OF THE ACT ASSESSING THE INCOME OF THE ASSESSEE AT RS. 1,27,65,500/ - WHICH INCLUDED UNDISCLOSED DEPOSIT OF RS. 1,16,65,000/ - AND ESTIMATED PROFIT OF RS . 11,60,500/ - EARNED FROM DODA CONTRACT. THE TRIBUNAL SET ASIDE THE ORDER OF THE A.O. FOR MAKING IT AFRESH. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE HAS CREDITED ADDITIONAL INCOME OFFER ED DURING THE YEAR AS THE SOURCE REMAINS UNPROVED OF RS. 91 LAKHS. THE ASSESSEE CLAIMED IT TO BE OUT OF OPENING CAPITAL OF RS. 92,69,420/ - . THE ASSESSEE WAS REQUIRED TO EXPLAIN THE CLAIM OF OPENING BALANCE BUT AS PER THE A.O. HE FAILED TO EXPLAIN THE SAM E AND THEREFORE, THE A.O. TREATED THE AMOUNT 3 OF OPENING CAPITAL OF RS. 92,69,420/ - AS ITS UNDISCLOSED INCOME. FURTHER ADDITION OF RS. 2,71,000/ - WAS ALSO MADE AS THE ASSESSEE FAILED TO PROVE THE CREDIT WORTHINESS OF CREDITORS . ACCORDINGLY, PENALTY PROCE EDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. DURING PENALTY PROCEEDINGS, THE ASSESSEE FILED REPLY DATED 16.5.2011 SUBMITTING AS UNDER: 1. THAT YOUR HONOUR HAS PASSED ASSESSME NT ORDER BY MAKING AN ADDITION OF RS. 3,71,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS. 2,71,000/ - AND HOUSEHOLD WITHDRAWALS OF RS. 1,00,000/ - . 2. NOTICE U/S 148 WAS ISSUED BUT NO COMPLIANCE WAS MADE AND THEREFORE PASSED EXPARTE ASSESSMENT ORDER BY MAKING ADDITIONS OF RS. 1,27,65,500/ - WHICH WAS SET ASIDE BY THE HON'BLE ITAT, JODHPUR BENCH, VIDE ORDER DATED 30.06.2009. 3. YOUR ASSESSEE HAS NEVER MADE ANY EXPLANATION OR STATEMENT PRIOR TO 24.11.2010. YOUR ASSESSEE HAS FILED RETURN IN RESPONSE TO YOU R NOTICE U/S 148 ON24.11.2010 VIDE RECEIPT NO. 0008705 DECLARING NET LOSS OF RS. 4,18,889/ - ALONGWITH THE RETURN 4 PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET QUANTITATIVE STATEMENT IS ALSO FILED. 4. YOUR ASSESSEE HAS ALSO OFFERED RS. 74,856/ - AS DISALLOWANCE U/S 40A(3) OF THE ACT FOR CASH PAYMENT FOR PURCHASE AND EXPENSES VOLUNTARILY AND BEFORE THE DETECTION OF THE DEPARTMENT. 5. YOUR ASSESSEE HAS SUFFICIENT FUNDS AT HIS OWN AND ON THE ADVICE OF SOME OF FAMILY MEMBERS, HE PARTICIPATED IN PO PPY STRAW CONTRACT AND OPERATED THE CONTRACT IN F.Y. 2001 - 02 AT RATLAM. 6. ASSESSEE HAS HIMSELF OFFERED RS. 91,00,000/ - OUT OF OPENING BALANCE OF CAPITAL AS THE SOURCE OF THE SAME CANNOT BE EXPLAINED TO THE SATISFACTION OF YOUR HONOUR AND TO BUY PEACE OF MIND AND TO AVOID THE LITIGATION FROM THE DEPARTMENT, HE HIMSELF OFFERED IN THE RETURN OF INCOME FILED FIRST TIME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT THAT TOO BEFORE THE DETECTION BY THE DEPARTMENT. 7. THE ASSESSEE HAS SIMPLY OFFERED ALL HIS INCO ME WHICH HE IS NOT ABLE TO EXPLAIN TO THE SATISFACTION OF YOUR HONOUR THUS ITS NOT COLOURABLE DEVICES AS HELD BY YOUR HONOUR. 5 YOUR ASSESSEE RELIED UPON THE CASE OF CIT VS. SURESH CHAND MITTAL [2001] 251 ITR 99 [SC]. WHERE THE ASSESSEE HAD OFFERED ADDIT IONAL INCOME IN REVISED RETURN TO BUY THE PEACE OF MIND AND TO AVOID LITIGATION, NO PENALTY CAN BE LEVIED FOR CONCEALMENT. THE DEPARTMENT HAD NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARILY S URRENDER DONE BY THE ASSESSEE IN GOOD FAITH. 8. REGARDING ADDITIONS OF UNEXPLAINED CASH CREDIT, WE SUBMIT THAT THE MATTER IS TOO MUCH OLD AND AT THE TIME NO. PAN NO WAS PREVALENT OR COMPULSORY. THE TRANSACTIONS WERE ROUTED THROUGH THE BANKING CHANNEL AND MERELY THAT ADDITIONS HAS NOT BEEN CHALLENGED IN APPEAL DOES NOT PERMIT THAT ADDITION IS FOR CONCEALED INCOME. 9. REGARDING HOUSEHOLD EXPENSES YOUR ASSESSEE HAS WITHDRAWN RS. 20,350/ - WHICH IS QUITE REASONABLE LOOKING TO THE MEDIOCRE STANDARD OF LIVING A ND THAT TOO AT VERY SMALL VILLAGE AND IN THE F.Y. 2001 - 02. YOUR HONOUR CAN COMPARE THE HOUSEHOLD EXPENSES OF OTHER ASSESSEE UNDER HIS JURISDICTION IN THE SAME CONDITIONS. FURTHER ADDITIONS OF HOUSEHOLD EXPENSES IS MERE ESTIMATE 6 MADE BY YOUR HONOUR AND NO PENALTY CAN BE LEVIED ON ESTIMATE ADDITIONS. 11. EVEN THOUGH THE ASSESSEE HAS FULLY CO - OPERATED IN THE PROCEEDINGS AND TO BUY THE PEACE OF MIND AGREED TO PAY THE TAX AS PER THE DISCUSSION H AD NOT FILED ANY AP PEAL AGAINST THE ADDITIONS. OUR APPELLANT REL IES UPON KALAPALATH A VS. ACIT [1992] 44 TTJ [HYD. TRI] 225. 11. FURTHER ASSESSEE AH ONLY AGREEING TO ADDITIONS OF INCOME TO BUY THE PEACE OF MIND BUT IT DOES NOT MEAN THAT THE ADDITION AMOUNT IS HIS CONCEALED INCOME, THEREFORE, PENALTY U/S 271(1)(C) OF T HE ACT WAS NOT WARRANTED IN THE ABSENCE OF ANY MATERIAL CIT VS. C.J. RAMASWAMY 1997 140 CTR [MAD] 143. 2.1 AFTER CONSIDERING THE ABOVE REPLY, HE HAS FOUND THAT THE EXPLANATION IS NOT PLAUSIBLE AND NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THEREFORE, HE HAS IMPOSED THE IMPUGNED PENALTY. AGAINST THIS, THE ASSESSEE PREFERRED APPEAL AND THE LD. CIT(A) HAS CONFIRMED THE PENALTY OF RS. 28,92,789/ - . NOW THE ASSESSEE HAS FILED THIS SECOND APPEAL AGAINST THE CONFIRMED PENALTY. 7 3. WE HAVE HEARD THE RIVAL SUBMISS IONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BOTH THE PARTIES HAVE REITERATED THEIR EARLIER ARGUMENTS. BEFORE WE TOUCH THE MERITS OF THIS APPEAL, WE WOULD LIKE TO INCORPORATE THE PENALTY PROVISIONS IN NUTSHELL AS BELOW AND CONSIDER THE FACTUAL MATRIX OF THIS CASE TO ASCERTAIN AS TO WHETHER IN THE EYES OF THE PROVISIONS OF THE ACT AS EXPLAINED BY NUMEROUS JUDICIAL PRONOUNCEMENTS, PENALTY CAN BE LEVIED IN THIS CASE OR NOT , THE RELEVANT LEGAL POSITION REGARDING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND AS TO HOW AND WHEN SUCH PENALTY CAN BE LEVIED UNDER THIS SECTION. THERE ARE NO TWO OPINIONS ABOUT THE SETTLED POSITION OF LAW THAT REGULAR ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO ENTIRELY DIFFERENT SUBJECTS WHICH OPERATE IN DISTINCT AND SEPARATE SPHERES SO MUCH SO THAT ENTIRELY DIFFERENT PARAMETERS ARE APPLICABLE FOR MAKING QUANTUM ADDITION AND FOR LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THERE CAN BE NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT UNDER SE CTION 271(1)(C) PENALTY CAN BE LEVIED ONLY IF EITHER THE ACT OF 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' IS FOUND TO HAVE BEEN COMMITTED BY THE ASSESSEE. THESE ARE TWO DIFFERENT OMISSIONS OR DEFAULTS ALBE IT THEY REFER TO DELIBERATE ACT ON THE PART OF THE ASSESSEE. 8 A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF EITHER SUPPRESSIO VERI OR SUGGESTIO FALSY. BY THE MERE REASON OF SUCH CONCEALMENT OR OF FURNISHING OF INACCURATE PARTICULA RS ALONE, THE ASSESSEE DOES NOT, IPSO FACTO, BECOME LIABLE TO A PENALTY. IMPOSITION OF PENALTY IS NOT AT ALL AUTOMATIC. MEANING THEREBY, ANY ADDITION IN QUANTUM WOULD NOT LEAD TO AUTOMATIC LEVY OF PENALTY AND THIS IS ALSO TRUE IN RESPECT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. NOT ONLY IS THE LEVY OF PENALTY DISCRETIONARY IN NATURE BUT THE DISCRETION HAS TO BE EXERCISED KEEPING THE RELEVANT FACTORS IN MIND AND THE APPROACH OF THE TAXMAN MUST BE FAIR AND OBJECTIVE. THIS SUBJECT HAS BEEN A MATTE R OF GREAT CONTROVERSY. FINALLY, AFTER REFERRING TO THE DECISIONS IN THE CASE OF DILIP N. SHROFF VS JCIT & ANOTHER, 291 ITR 519, UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS [2008] 13 SCC 369, AS WELL AS UNION OF INDIA VS RAJASTHAN SPG. & WVG. MILLS [2009] 13 SCC 448, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD, 322 ITR 158, HAS RECENTLY HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1) (C) OF THE INCOME - TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVER ED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS' USED IN SECTION 271(1) (C) WOULD EMBRACE THE DETAI LS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, 9 THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTI - CULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERE D BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSE SSEE, BECAUSE THAT IS THE ONLY DOCU MENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. 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 2 71 (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. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 4. ADVERTING TO THE FACTS OF THIS CASE, WE HAVE ALREADY MENTIONED IN PARA 2 PAGE 2 OF THIS ORDER. WE HAVE SEEN THAT THE ASSESSEE WAS REQUIRED TO EXPLAIN THE OPENING BALANCE (OPENING CAPITAL) OF RS. 92,69,420/ - . THE ASSESSEE HAS NOT BEEN FILING RETURN O F INCOME AND OTHERWISE ALSO HE COULD NOT PROVE THIS OPENING CAPITAL. OTHER ADDITION OF RS. 2,71,000/ - WAS ALSO MADE U/S 68 OF THE ACT. A PENALTY 10 PROCEEDING INITIATED U/S 271(1)(C) LED TO IMPOSITION OF A PENALTY OF RS. 28,92,789/ - AFTER INVOKING THE PRESUM PTION OF EXPLANATION - I OF THIS SECTION. IF ANY ASSESSEE OFFERS AN EXPLANATION BUT DO NOT SUBSTANTIATE THE SAME, A PRESUMPTION WOULD ARISE FROM ITS CLAUSE (B), THAT HE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE ASSESSEE HAS CLAIMED THAT HE PAID LICENCE FEE OF RS. 1,16,05,000/ - OUT OF HIS OPENING CAPITAL BALANCE OF RS. 92,69,426/ - . HOWEVER, HE HAS HIMSELF OFFERED A SUM OF RS. 91,00,000/ - AS ADDITIONAL INCOME BUT NO COGENT PROOF OF OPENING CAPITAL WAS FILED. NO BANK ACCOUNT OF EARLIER PERIOD, ETC HAS BEEN FILED. THE CONTENTION OF THE ASSESSEE IS THAT OFFERED ADDITIONAL INCOME IS OUT OF OPENING CAPITAL BALANCE SO IT CANNOT BE TREATED AS HIS CONCEALED INCOME. THE CASE OF THE REVENUE IS THAT NO PLAUSIBLE EVIDENCE HAS BEEN FILED TO SUPPORT THIS AMOUNT AND THE OFFER IS NOT VOLUNTARY, THEREFORE, EXPLANATION I OF SECTION 271(1)(C) WOULD APPLY. IT IS TRUE THAT DESPITE, ISSUANCE OF NOTICE U/S 148 THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME. THE TRIBUNAL RESTORED THE MATTER TO A.O. VIDE ORDER DATED 30.06. 2009, AND THEREAFTER, ONLY ON 24.11.2010 THE ASSESSEE FILED HIS ROI FOR A.Y. 2002 - 03, FOR THE FIRST TIME, DECLARING TOTAL NEGATIVE INCOME OF RS. 4,18,889/ - ALONGWITH CAPITAL ACCOUNT, BALANCE SHEET AND P&L ACCOUNT. THE ASSESSEE HAS CLAIMED IMMUNITY FROM LEV Y OF PENALTY AS HE HAS VOLUNTARILY OFFERED INCOME OF RS. 11 91,00,000/ - IN THE P&L ACCOUNT STATED TO BE OUT OF OPENING CAPITAL. THE ASSESSEE HAS ALSO OFFERED 20% OF CASH PURCHASES AT RS. 3,74,277/ - U/S 40A(3) OF THE ACT, AUDITING TO RS. 74,856/ - . THE CONTENTI ON OF THE ASSESSEE IS THAT THERE BEING NO ADDITION OR REDUCTION IN LOSS TO THE RETURNED INCOME EXCEPT FOR RS. 2,71,000/ - WHICH ARE IN RELATION TO UNSECURED LOANS SHOWN BY THE ASSESSEE. IN CASE OF SHRI J. SODHANI, NO EXPLANATION OR ANY OTHER DETAILS WERE SUB MITTED. ACCORDINGLY, UNSECURED LOANS OF RS. 2.5 LAKHS AND INTEREST OF RS. 21,000/ - IN RESPECT OF SHRI J. SODHANI HAS BEEN TREATED AS NOT EXPLAINED . THE LOAN OF SHRI MOHANLAL NAGDA WAS TREATED AS EXPLAINED. ONE MORE ADDITION OF RS. 1 LAKH WAS MADE IN THE AC COUNT OF HOUSE HOLD EXPENSES. BUT PENALTY PROCEEDING WAS INITIATED IN RELATION TO RS. 91,00,000/ - AND RS. 2,71,000/ - AS DISCUSSED ABOVE. THE POSITION OF A PENALTY OF RS. 28,92,789/ - HAS BEEN CONFIRMED BY LD. CIT(A), AS WELL. 5. BEFORE US BOTH THE PARTIES HAVE REITERATED THEIR EARLIER STAND. THE THRUST OF LD. A.R. IS ON THE FACT THAT THE ASSESSEE HAS HIMSELF DISCLOSED OPENING CAPITAL OF RS. 92,69,427/ - VOLUNTARILY, IN THE ROI FILED FOR THE FIRST TIME AFTER SET ASIDE BY THE TRIBUNAL ON 24.11.2010, AND LOSS RETURNED HAS BEEN REMAIN THE SAME, EXCEPT FOR RS. 2,71,000/ . HE HAS PLACED RELIANCE ON MANY DECISIONS INCLUDING THAT OF SUBHASH CHAND MITTAL 251 ITR 9 (SC), INTER ALIA. THE DEPARTMENT HAS RELIED ON 12 THE ORDERS OF THE AUTHORITIES BELOW AND HAS HEAVILY RELIED ON THE DECISION OF THE HONBLE S.C. IN THE CASE OF MAK DATA (P) LTD. VS CIT 358 ITR 593 (SC). 6. AFTER HEARING BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THIS SURRENDER OR DISCLOSURE, WITH WHAT EVEN NAME IT MAY BE REFERRED TO, OF RS. 91 LAKHS TO BE OUT OPENING CAPITAL OF CLAIMED AT RS. 92,69,426/ - WHICH HAS BEEN ADDED A S UNDISCLOSED INCOME OF THE ASSESSEE, CANNOT BE TREATED AS VOLUNTARY DISCLOSURE. IT SEEMS THAT THE A.O. COULD DETECT THIS UNDISCLOSED INCOME FROM THE INFORMATION OF THE EXCISE DE PARTMENT, RATLAM. HOWEVER, FACTS ARE MISSING AS TO WHY ONLY OPENING CAPITAL OF RS. 92,69,426/ - HAS BEEN ADDED AND THE ENTIRE LICENCE FEE OF RS. 1,16,05,000/ - WAS NOT CONSIDERED BY THE A.O. THIS MATTER NEEDS TO BE LOOKED INTO BY THE CONCERNED AUTHORITIES. B E, THAT AS IT MAY THE ASSESSEE HAS NOT PRODUCED PLAUSIBLE EVIDENCE TO PROVE THE AMOUNT OF RS. 91 LAKHS AS HIS OPENING CAPITAL. OTHERWISE, THE PROOF TENDERED IS NOT SUFFICIENT TO EXPLAIN THIS AMOUNT. THE ASSESSEE HAS NOT BEEN FILING HIS RETURNS HITHERTO. IT IS ONLY WHEN THE BEST JUDGMENT ASSESSMENT WAS MADE AFTER ISSUING NOTICE U/S 144 OF THE ACT AND THE MATTER REACHED THE TRIBUNAL, THE ASSESSEE FILED HIS ROI. IT IS A BLATANT MISUSE OF THE PROVISIONS AND THE PROCEDURE LAID, BY THE ACT. THE ASSESSEE CANNOT TR EATED THIS AMOUNT TO BE OFFERED AS VOLUNTARILY AND 13 CANNOT TAKE BENEFIT OF THE DECISIONS RELIED ON BY LD. A.R. INCLUDING THE CASE OF SUBAHSH CHAND MITTAL (SUPRA). THE RATIO OF MAKE DATA (P) LTD. 358 ITR 593 (SC) IS DIRECTLY APPLICABLE TO THIS ISSUE. IN THIS CASE IT HAS BEEN HELD THUS : - ACCORDING TO THE SUPREME COURT, THE ASSESSING OFFICER SHOULD NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT, ETC., TO EXPLAIN AWAY ITS CON DUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE EXPLANATION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTI CED BY THE ASSESSING OFFICER, BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE., THAT INCOME WAS NOT CONCEALED OR INACCURATE PARTICULARS WERE NOT FURNISHED. WHEN THE INITIAL ONUS PL ACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. THE ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM OF RS. 40,74,000 / - WIT H A VIEW TO AVOID LITIGATION, BUY PEACE AND TO CHANNELISE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOME - TAX DEPARTMENT. THE STATUTE 14 DOES NOT RECOGNISE THOSE TYPES OF DEFENCES UNDER EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT. IT IS A TRITE LAW THAT THE VOLUNTARY DISCLOSURES DO NOT RELEASE THE APPELLANT 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 HA D TO BE ABSOLVED FROM PENALTY. THE SUPREME COURT WAS OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE WAS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE ASSESSING OFFICER IN A SURVEY CONDUCTED 0N THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT COULD NOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING SHARE APPLICATION, FORMS, BA NK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME - TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAD BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS U/S. 133A CONDUCTED ON 16TH DECEMBER, 2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. 15 CONSEQUENTLY, IT WAS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSES SEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. IN THE OPINION OF THE SUPREME COURT, THE ASSESSING OFFICER, HAD R ECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND WAS LIABLE FOR PENALTY PROCEEDINGS U/S. 271 READ WITH SECTION 274 OF THE INCOME - TAX ACT, 1961. ACCORDING TO THE SUPREME COURT, THE ASSESSING OFFICER HAS TO SATISFY WHETHER THE PENALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING . 7. THE EXPL ANATION I APPENDED TO SECTION 271(1)(C) IS APPLICABLE TO THE FACTS OF THIS CASE. HENCE, WE CONFIRM THE FINDING OF LD. CIT(A) ON THIS ISSUE. 16 8. REGARDING THE ADDITION OF RS. 2,71,000/ - U/S 68 OF THE ACT, THE POSITION IS THE SAME. THE ASSESSEE HAS NOT OF FERED ANY EXPLANATION IN THIS REGARD, THEREFORE, THE PENALTY QUA THIS ADDITION IS ALSO CONFIRMED. WE HOLD THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRON OUNCED IN THE CO URT ON 25 TH JULY , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEM B ER DATED : 25 TH JULY , 201 4 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR