G. Suresh, Trivandrum V. ACIT, Kollam

ITA 302/COCH/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58229 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 04-01-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 25-05-2009
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Depreciation; Bonafide belief; Onus to prove; Revised return; Set aside
• Section: 271(1)(c); 142(1); 148

Judgement Text

ITA NO. 302 & 303/COCHIN/2009 G.SURESH 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE: SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.302 AND 303/COCH/2009 ASSESSMENT YEARS : 1999-2000 AND 2005-06 G SURESH, LAXMI, MOOLAYIL LANE, SASTHAMANGALAM, TRIVANDRUM THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - !, KOLLAM (APPELLANT) VS. (RESPONDENT) P.A. NO. AEAPP7717B APPELLANT BY: SHRI T.M.SREEDHARAN, ADVOCATE RESPONDENT BY: MS. S.VIJAYAPRABHA, JR. D.R DATE OF HEARING: 04-01-2012 DATE OF PRONOUNCEMENT: 20-01-2012 ORDER PER SHRI B.R.BASKARAN, ACCOUNTANT MEMBER:- THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS PASSED BY LEARNED CIT(A) FOR THE TW O YEARS MENTIONED ABOVE. THE ASSESSEE IS ASSAILING THE DECISION OF L EARNED CIT(A) IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE A CT. SINCE BOTH THE APPEALS WERE HEARD TOGETHER, THEY ARE DISPOSED OF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, WE PREFER TO ADJUDICATE T HE APPEALS ONE BY ONE. (A) ITA NO.302/COCH/2009 :- 2. THE FACTS PREVAILING IN THE APPEAL RELATING TO THE ASSESSMENT YEAR 1999- 2000 ARE STATED IN BRIEF. THE ASSESSEE IS A CINE A CTOR. HE FILED HIS RETURN OF INCOME FOR THE ABOVE SAID YEAR DISCLOSING A TOTAL I NCOME OF RS.26,68,430/-. IN THE STATEMENT ACCOMPANYING THE RETURN OF INCOME, THE ASSESSEE FURNISHED THE DETAILS OF REMUNERATION AGGREGATING TO RS.45,44 ,701/- RECEIVED FROM FILM PRODUCERS. FROM THE SAID DETAILS OF REMUNERATION, T HE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD OFFERED THE ADVANCE RECEIPTS ALSO AS INCOME. THE A.O NOTICED THAT THE ASSESSEE WAS TREATING THE ADVANCE RECEIPTS AS ITA NO302 & 303/COCHION/2009 G. SURESH 2 LIABILITY AND OFFERING THE SAME AS INCOME ONLY IN T HE YEAR IN WHICH THE CONCERNED FILM WAS RELEASED FOR SCREENING. WHEN QU ESTIONED, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAD CHANGED THE ACCOUNTING SYSTEM FROM THE INSTANT YEAR ONWARDS, BY WHICH THE ASSESSEE WOULD OFFER ALL THE RECEIPTS, WHETHER THE SAME IS A N ADVANCE OR FINAL SETTLEMENT, AS INCOME IRRESPECTIVE OF THE DATE OF R ELEASING OF THE CONCERNED FILM. THE STATEMENTS OF ACCOUNTS FURNISHED ALONG W ITH THE RETURN OF INCOME DEPICTED OPENING BALANCE OF ADVANCE RECEIPTS AGGR EGATING TO RS.19.40 LAKHS, WHICH HAD BEEN RECEIVED IN THE EARLIER YEARS , I.E. FROM 1991-92 TO 1997-98 AND IT WAS CONTINUED TO BE SHOWN AS LIABILI TY IN THE INSTANT YEAR ALSO. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESS EE SHOULD HAVE OFFERED THE ABOVE SAID AMOUNT OF RS.19.40 LAKHS ALSO AS INCOME DURING THE INSTANT YEAR, EVEN THOUGH IT PERTAINS TO THE EARLIER YEARS, AS TH E ASSESSEE HAS CHANGED THE SYSTEM OF ACCOUNTING OF SUCH ADVANCES. ACCORDINGLY , THE ASSESSING OFFICER ADDED THE ABOVE SAID AMOUNT OF RS.19.40 LAKHS TO TH E TOTAL INCOME OF THE ASSESSEE. THE SAID ADDITION WAS CONFIRMED BY THE T RIBUNAL AND ALSO BY HON'BLE HIGH COURT OF KERALA. 3. THE ASSESSING OFFICER, AFTER THE RECEIPT OF ORDER OF THE TRIBUNAL, LEVIED A PENALTY OF RS.11,70,906/- REPRESENTING 200% OF THE TAX SOUGHT TO BE EVADED U/S 271(1)(C) OF THE ACT, WHICH WAS CONFIRMED BY LE ARNED CIT(A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THERE IS NEITHER CONCEALMENT OF PARTICULARS OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE, AS THE INFOR MATION ABOUT THE IMPUGNED ADVANCES OF RS.19.40 LAKHS WERE COLLATED B Y THE ASSESSING OFFICER ONLY FROM THE STATEMENTS OF INCOME FILED BEFORE HIM . HE FURTHER SUBMITTED THAT THE ASSESSEE HAD BEEN FOLLOWING THE SYSTEM OF OFFERING THE ADVANCES AS INCOME ONLY IN THE YEAR IN WHICH THE CONCERNED FILM WAS RELEASED FOR SCREENING. AS PER THE SAID ACCOUNTING SYSTEM, THE IMPUGNED AMOUNT OF RS.19.40 LAKHS WAS TO BE SHOWN AS A LIABILITY AND W AS NOT TO BE OFFERED AS INCOME. HOWEVER, FROM THE INSTANT YEAR ONWARDS, THE ASSESSEE DECIDED TO ITA NO302 & 303/COCHION/2009 G. SURESH 3 OFFER EVEN SUCH TYPES OF ADVANCE RECEIPTS ALSO AS H IS INCOME IRRESPECTIVE OF THE DATE OF RELEASE OF CONCERNED FILM. IN ANY CASE , THE IMPUGNED ADVANCES WERE RECEIVED BY THE ASSESSEE IN THE EARLIER YEARS AND NOT DURING THE YEAR UNDER CONSIDERATION. EVEN THOUGH THE ADDITION OF R S.19.40 LAKHS WAS CONFIRMED BY THE TRIBUNAL AND ALSO BY THE HIGH COUR T, IT WOULD NOT GIVE RISE TO ANY PENALTY UNDER SECTION 271(1)(C) OF THE ACT, AS THE IMPUGNED ADDITION IS MADE ONLY DUE TO THE DIFFERENT VIEW TAKEN BY THE ASSESSING OFFICER. IN THIS REGARD, THE LEARNED COUNSEL RELIED UPON THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS REPORT ED IN 322 ITR 158 (S.C). 5. ON THE CONTRARY, THE LEARNED D.R SUBMITTED T HAT THE ASSESSEE HAS FAILED TO DISCLOSE THE IMPUGNED AMOUNT OF RS.19.40 LAKHS A S HIS INCOME EVEN THOUGH THE ASSESSEE WAS CONSTRAINED TO OFFER THE SA ME DUE TO CHANGE IN THE SYSTEM OF ACCOUNTING OF FILM RECEIPTS. SHE FURTHER SUBMITTED THAT THE ASSESSEE HAS EFFECTED THE CHANGE WITH REGARD TO THE ACCOUNTING OF FILM RECEIPTS ONLY. SHE FURTHER SUBMITTED THAT THE DISC LOSURE OF THE ADVANCE RECEIPTS IN THE BALANCE SHEET CANNOT BE CONSIDERED AS DUE DISCLOSURE AS PER THE PROVISIONS OF THE ACT. ACCORDINGLY SHE DEFENDE D THE ORDER OF LEARNED CIT(A) IN CONFIRMING THE LEVY OF IMPUGNED PENALTY. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE ORDER OF LOWER AUTHORITIES. IT IS AN ADMITTED FACT THAT THE ADDITION OF RS.19.40 LAKHS, ON WHICH THE IMPUGNED PENALTY WAS LEVIED, HAS BEEN CONFIRMED BY THE TRIBUNAL AND HON'BLE HIGH COURT OF KERALA. HOWEVER , IT IS A SETTLED PROPOSITION OF LAW THAT ANY ADDITION MADE DURING TH E COURSE OF ASSESSMENT PROCEEDING WOULD NOT AUTOMATICALLY GIVE RISE TO LEV Y OF PENALTY. THE FOLLOWING OBSERVATIONS MADE BY HON'BLE SUPREME COURT IN THE C ASE OF T.ASHOK PAI VS. CIT (292 ITR 11) ARE OF WORTH MENTIONING HERE. .SINCE THE BURDEN OF PROOF IN PENALTY PROCEEDING S VARIES FROM THAT IN THE ASSESSMENT PROCEEDING, A FINDING IN AS ASSESSMENT PROCEEDING THAT A PARTICULAR RECEIPT IS INCOME CANN OT AUTOMATICALLY BE ADOPTED, THOUGH A FINDING IN THE ASSESSMENT PROC EEDING CONSTITUTES GOOD EVIDENCE IN THE PENALTY PROCEEDING . IN THE PENALTY PROCEEDINGS, THUS, THE AUTHORITIES MUST CON SIDER THE MATTER AFRESH AS THE QUESTION HAS TO BE CONSIDERED FROM A DIFFERENT ANGLE. ITA NO302 & 303/COCHION/2009 G. SURESH 4 7. AT THE SAME TIME, IT IS THE BOUNDEN DUTY OF THE ASSESSEE TO OFFER EXPLANATION AS REQUIRED UNDER EXPLANATION 1 TO SEC. 271(1) OF THE ACT AS HELD BY HON'BLE S.C IN THE CASE OF K.P. MADHUSUDHANAN VS . CIT (251 ITR 99), AS THE SAID EXPLANATION-1 PLACES THE BURDEN UPON THE A SSESSEE. THE SAID EXPLANATION-1 READS AS UNDER: EXPLANATION 1:- WHERE IN RESPECT OF ANY FACTS MAT ERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT A BLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INC OME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 8. NOW WE SHALL CONSIDER THE EXPLANATION FURNIS HED BY THE ASSESSEE DURING THE PENALTY PROCEEDINGS. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT IMPUGNED ADVANCE AMOUNTS AGGREGATING TO RS.19.40 LA KHS, WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE, WERE RECEIVED IN THE EARLIER YEARS. HENCE, AS PER THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IN THOSE YEARS, THE SAID ADVANCE AMOUNTS WERE TREATED AS A L IABILITY. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS CLAIMED TO HA VE CHANGED THE METHOD OF ACCOUNTING, BY WHICH HE WAS OFFERING SUCH ADVANC E AMOUNTS ALSO AS HIS INCOME. NOW THE QUESTION THAT ARISES IS WHETHER TH E ASSESSEE IS REQUIRED TO OFFER THE OPENING BALANCE OF ADVANCES ACCOUNT, WH ICH WERE RECEIVED IN EARLIER YEARS, AS HIS INCOME DURING THE YEAR UNDER CONSIDERATION? THE A.O HAS TAKEN THE VIEW THAT THE OPENING BALANCE OF ADVA NCES OF RS.19.40 LAKHS WAS ASSESSABLE AS INCOME, WHICH WAS ALSO CONFIRMED BY THE TRIBUNAL AND HON'BLE HIGH COURT. HOWEVER, IN PENALTY PROCEEDING S, THE ASSESSEE HAS OFFERED FOLLOWING EXPLANATIONS:- ITA NO302 & 303/COCHION/2009 G. SURESH 5 IN THE ASSESSMENT YOU HAVE ADDED RS.19,40,000/- AD VANCE RECEIVED FROM FILMS AND STANDING AS OPENING BALANCE . SINCE I AM FOLLOWING MERCANTILE SYSTEM, THE ADVANCES RECEIVED WERE SHOWN AS ADVANCE AND NOT AS REMUNERATION IN THE PREVIOUS YEARS. IT IS IN YOUR OPINION THAT THOSE ADVANCES SHOULD BE INCOM E FOR THE ASSESSMENT YEAR. YOUR OPINION CANNOT BE TERMED AS CONCEALMENT OF INCOME. IF WE CONSIDER THE EXPLANATIONS OFFERED BY THE ASSES SEE, FROM THE POINT OF VIEW OF EXPLANATION-1 TO SEC. 271(1), WE COULD SEE THAT WE COULD NOT FIND FALSE WITH THE SAID EXPLANATION OFFERED BY THE ASSE SSEE. THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT THE CHANGE IN THE SY STEM OF ACCOUNTING THE FILM RECEIPTS IS EFFECTIVE FROM THE YEAR UNDER CONS IDERATION AND IT WILL NOT AFFECT THE EARLIER YEAR RECEIPTS. HENCE, IN OUR VI EW, THE DEEMING PROVISIONS OF EXPLANATION-1 TO SEC. 271(1) DO NOT APPLY TO THE FA CTS OF THE INSTANT CASE. 9. DURING THE COURSE OF ARGUMENTS, THE LEARNED A. R INVITED OUR ATTENTION TO THE ORDER PASSED BY HON'BLE KERALA HIGH COURT, WHER E IN THE HON'BLE HIGH COURT HAS GIVEN PRIVILEGE TO THE ASSESSEE TO SEEK D EDUCTION OF THE AMOUNT OF ADVANCE, IF ANY, REFUNDED BY THE ASSESSEE. THE LEA RNED A.R SUBMITTED THAT THE ASSESSEE HAS, IN FACT, REFUNDED CERTAIN PORTION OUT OF THE IMPUGNED ADDITION OF RS.19.40 LAKHS. THE ABOVE SAID CONTENT IONS OF THE ASSESSEE ALSO SUPPORT THE CASE OF THE ASSESSEE UNDER EXPLANATION- 1 TO SEC. 271(1) OF THE ACT. 10. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AS SUBMITTED BY LEARNED A.R, THE DETAILS OF IMPUGNED ADVANCE AMOUNT OF RS.19.40 LAKHS WERE VERY MUCH AVAILABLE IN THE STATEMENTS OF ACCOUNT/BALANCE SHEET FILED ALONG WIT H THE RETURN OF INCOME. THE SIMPLE ISSUE DURING THE COURSE OF ASSESSMENT PR OCEEDING WAS RELATED TO THE ASSESSABILITY OF THE SAME, WHICH WAS SHOWN AS O PENING BALANCE IN THE BALANCE SHEET UNDER THE HEAD ADVANCE RECEIPTS. I T IS ALSO A FACT THAT AS PER THE SYSTEM OF ACCOUNTING FOLLOWED IN THE EARLIE R YEARS, THE SAID ADVANCE RECEIPTS WERE NOT TO BE TREATED AS INCOME. IN THESE CIRCUMSTANCES, IN OUR VIEW, THE QUESTION OF FURNISHING OF INACCURATE PART ICULARS OF INCOME DOES NOT ITA NO302 & 303/COCHION/2009 G. SURESH 6 ARISE IN THE INSTANT CASE, AS THE ENTIRE PARTICULAR S OF THE IMPUGNED RECEIPTS ARE AVAILABLE ON RECORD. 11. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS N OT EXIGIBLE ON THE IMPUGNED ADDITION OF RS.19.40 LAKHS. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY LEVIED IN THE ASSESSMENT YEAR 1999-2000. (B) ITA 303/COCHIN/2009:- 12. THIS APPEAL OF THE ASSESSEE PERTAINS TO THE AS SESSMENT YEAR 2005-06. IN THIS YEAR, THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME VOLUNTARILY EVEN THOUGH HE WAS HAVING TAXABLE INCOME. THE ASSESSEE DID NOT RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT ALSO. O NLY AFTER ISSUING NOTICE U/S 142(1) OF THE ACT, THE ASSESSEE FILED RETURN OF INC OME DECLARING A TOTAL INCOME OF RS.2,80,011/-. DURING THE COURSE OF ASSE SSMENT PROCEEDING, THE ASSESSEE WAS REQUESTED TO RECONCILE THE ADVANCES A CCOUNT. AT THAT POINT OF TIME, THE ASSESSEE CONCEDED THAT THERE WAS UNDERSTA TEMENT OF FILM RECEIPTS TO THE TUNE OF RS.14.00 LAKHS. ALSO THERE WAS ONE MORE MISTAKE IN THE RETURN OF INCOME, I.E., THE ASSESSEE HAD WRONGLY SHOWN THE SALE CONSIDERATION OF RS.16.00 LAKHS RECEIVED ON SALE OF CAR AS HIS INCOM E. THE ASSESSING OFFICER ADDED THE OMITTED FILM RECEIPTS OF RS.14.00 LAKHS T O THE TOTAL INCOME AND ALSO DEDUCTED THE SALE CONSIDERATION OF CAR OF RS.16.00 LAKHS FROM IT. ACCORDING TO ASSESSEE, THE ASSESSING OFFICER ALSO CARRIED OUT NE CESSARY ADJUSTMENT IN THE DEPRECIATION CLAIM OF THE ASSESSEE, AS A RESULT OF WHICH THE DEPRECIATION CLAIM GOT REDUCED FROM RS.5,53,914/- TO RS.3,44,312/-. THE ASSESSING OFFICER ALSO MADE CERTAIN SMALL ADDITIONS TO THE TOTAL INCOME, A S A RESULT OF WHICH, THE TOTAL INCOME WAS FINALLY DETERMINED AT RS.4,04,591/ -. 13. THE ASSESSING OFFICER, IN THE PENALTY PROCE EDINGS, LEVIED A PENALTY OF RS.9,09,036/- ON THE CONCEALED INCOME OF RS.14.00 L AKHS, CALCULATED AT 200% OF THE TAX ON THE SAID INCOME. THE LEARNED CIT(A) ALSO CONFIRMED THE PENALTY ORDER. HENCE THE ASSESSEE IS IN APPEAL BEF ORE US. ITA NO302 & 303/COCHION/2009 G. SURESH 7 14. THE LEARNED A.R SUBMITTED THAT THE ASSESSEE HAS MADE CLERICAL MISTAKES WHILE PREPARING THE RETURN OF INCOME, WHIC H RESULTED IN OMISSION OF INCOME OF RS.14.00 LAKHS AND INCLUSION OF SALE VALU E OF CAR OF RS.16.00 LAKHS. HE FURTHER SUBMITTED THAT THESE MISTAKES WERE POINT ED OUT BY THE ASSESSEE HIMSELF. ACCORDINGLY HE CONTENDED THAT SUCH TYPE O F CLERICAL MISTAKES CANNOT BE CONSIDERED AS CONCEALMENT OF INCOME. HE FURTHER SUBMITTED THAT THE TOTAL INCOME WAS DETERMINED AT RS.4,04,591/-, AS AGAINST THE RETURNED INCOME OF RS.2,80,011/-. THIS HAS RESULTED IN THE INCREASE O F TOTAL INCOME BY ONLY RS.1,24,580/-. HE FURTHER SUBMITTED THE ASSESSEES CLAIM OF DEPRECIATION WAS REDUCED FROM RS.5,53,914/- TO RS.3,44,312/-, AS A RESULT OF REDUCTION OF SALE VALUE OF CAR FROM THE BLOCK OF ASSETS. ACCORDINGL Y HE SUBMITTED THAT THE ENTIRE INCREASE OF TOTAL INCOME MAY BE TAKEN AS A R ESULT OF REDUCTION IN THE DEPRECIATION CLAIM, IN WHICH CASE, THE PENALTY U/S 271(1)(C) IS NOT EXIGIBLE. THE LEARNED A.R FURTHER SUBMITTED THAT THE ASSESSIN G OFFICER HAS LEVIED PENALTY ON THE ADDITION OF RS.14.00 LAKHS BY TREATI NG THE SAME AS THE TOTAL INCOME OF THE ASSESSEE, WHICH IS NOT CORRECT IN TER MS OF EXPLANATION-4 TO SEC. 271(1) OF THE ACT. 15. ON THE CONTRARY, THE LEARNED D.R SUBMITTED THAT THE FACT REMAINS THAT THE ASSESSEE HAS OMITTED TO DISCLOSE THE IMPUGNED A MOUNT OF RS.14.00 LAKHS WHILE COMPUTING THE INCOME AND HE CAME FORWARD TO O FFER THE SAME ONLY AS A RESULT OF ENQUIRY CONDUCTED BY THE ASSESSING OFFICE R. HENCE, IT CANNOT BE CONSIDERED AS A MERE CLERICAL MISTAKE. THE LEARNED D.R, BY PLACING RELIANCE ON THE DECISION OF JURISDICTIONAL KERALA HIGH COURT IN THE CASE OF P.C.JOSEPH & BROS. VS. CIT (240 ITR 818)(KER), SUBMITTED THAT TH E ASSESSEE CANNOT ESCAPE FROM PENALTY UNDER SECTION 271(1)(C), SIMPLY BECAUS E HE HAS AGREED TO ADDITION OF THE CONCEALED INCOME AFTER DETECTION TH ERE OF. LEARNED D.R ALSO SUBMITTED THAT THE ASSESSEE WOULD BE LIABLE FOR PEN ALTY FOR THE ADDITIONAL INCOME OFFERED IN THE REVISED RETURN, IF HE IS NOT ABLE TO ESTABLISH INADVERTENT MISTAKE OR OMISSIONS MADE IN THE ORIGINAL RETURN OF INCOME AND IN SUPPORT OF THIS PROPOSITION, SHE RELIED UPON THE DECISION OF H ON'BLE S.C IN THE CASE OF G.C.AGARWAL VS. CIT (186 ITR 571)(S.C). ITA NO302 & 303/COCHION/2009 G. SURESH 8 16. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAS FAILE D TO OFFER THE IMPUGNED FILM RECEIPTS OF RS.14.00 LAKHS IN THE RETURN OF INCOME FILED BY HIM. IT IS ALSO A FACT THAT HE CAME FORWARD TO OFFER THE SAID INCOME ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE EXPLANATION OF THE ASS ESSEE THAT THE SAID OMISSION HAS OCCURRED AS A RESULT OF CLERICAL MISTA KE IS VERY BALD AND NOT CONVINCING. AS DISCUSSED IN PARA 7 (SUPRA), IT IS THE RESPONSIBILITY OF THE ASSESSEE TO PROVE THAT HIS CASE DOES NOT FALL IN TH E AMBIT OF EXPLANATION 1 TO SEC. 271(1). IN THE INSTANT CASE, EVEN THOUGH THE A SSESSEE HAS EXPLAINED THE IMPUGNED OMISSION AS A CLERICAL MISTAKE, HE HAS FAI LED TO BRING IN ANY CREDIBLE EVIDENCE IN SUPPORT OF THE SAME. THUS, IN OUR CONS IDERED VIEW, THE ASSESSEE HAS FAILED TO OFFER ANY SATISFACTORY EXPLANATION WI TH REGARD TO THE OMISSION OF IMPUGNED AMOUNT OF RS.14.00 LAKHS. ACCORDINGLY, IN OUR VIEW, PENALTY U/S 271(1)(C) IS EXIGIBLE ON THE SAID OMISSION. 17. ALTERNATIVELY, THE LEARNED. A.R HAS TAKEN A PLEA THAT THE QUANTUM OF PENALTY LEVIABLE U/S 271(1)(C) SHOULD BE CALCULATED IN ACCORDANCE WITH EXPLANATION 4 TO SECTION 271(1) OF THE ACT, MORE PA RTICULARLY CLAUSE (C) OF THAT EXPLANATION. ACCORDING TO CLAUSE (C) OF THE EXPLAN ATION 4 TO SEC. 271(1), THE PENALTY COULD BE CALCULATED ONLY ON THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE B EEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME I N RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTI CULARS HAVE BEEN FURNISHED. ACCORDINGLY, THE CONTENTION OF LEARNED A.R IS THAT THE A.O HAS COMMITTED ERROR IN TAKING THE AMOUNT OF RS.14.00 LA KHS AS THE TOTAL INCOME OF THE ASSESSEE FOR THE PURPOSE OF LEVYING THE IMPUGNE D PENALTY. WE HAVE PERUSED THE ORDER OF LOWER AUTHORITIES VIS--VIS TH E SAID ALTERNATIVE CONTENTION OF THE ASSESSEE AND NOTICE THAT THE ASSESSEE HAS RA ISED THIS ALTERNATIVE CONTENTION FOR THE FIRST TIME BEFORE US. SINCE THE ALTERNATIVE CONTENTION RAISED FOR THE FIRST TIME BEFORE US INVOLVES DETERMINATION OF QUANTUM OF PENALTY TO BE COMPUTED, IN OUR VIEW, IT NEEDS TO BE CONSIDERED AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THIS MATTER TO THE FILE OF THE ITA NO302 & 303/COCHION/2009 G. SURESH 9 ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ALTERNATIVE PLEA OF THE ASSESSEE AND TAKE APPROPRIATE DECISION WITH REGARD TO THE QUANTUM OF PENALTY TO LEVIED IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IN ACCORDANCE WITH THE LAW. THE ORDER OF LEARNED CIT( A) STANDS MODIFIED TO THAT EXTENT. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE FO R THE ASSESSMENT YEAR 1999- 2000 IS ALLOWED AND THE APPEAL RELATING TO THE ASSE SSMENT YEAR 2005-06 IS TREATED AS PARTLY ALLOWED. PRONOUNCED ON 20/01/2012 (N.R.S.GANESAN) (BR BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN, DATED 20 TH JANUARY, 2012 COPY TO 1 ACIT, CIRCLE-2(1), KOLLAM 2 G. SURESH GOPI, LAXMI, MOOLAYIL LANE, SASTHAMANGA LAM, TRIVANDRUM 3 CIT, TRIVANDRUM 4 5 THE CIT(A)-II, KOCHI. THE CIT(A)- 1, TRIVANDRUM 6 THE DR, ITAT, COCHIN. 7 GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL COCHIN