Mr Sarvan Kumar Goel, New Delhi V. ITO, New Delhi

ITA 4462/DEL/2009

• Counselvise Citation: 446220114 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-06-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 23-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTYDR
• Keywords: Income from undisclosed sources; Principle of natural justice; Question of law; Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENC H BEFORE SHRI G.C. GUPTA,VP & SHRI A.N. PAHUJA,AM ITA NO.4462/DEL./2009 ASSESSMENT YEAR: 2004-05 SARAN KUMAR GOEL, PROP.,GANPATI PLYWOOD INDUSTRIES,S-3, SHIVAJI PARK, NEW DELHI VS. INCOME-TAX OFFICER WARD-25(3), NEW DELHI (PAN AAOPG 1335 L ] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SAMEER KAPOOR, AR REVENUE BY SMT. SURJANI MOHANTY,DR DATE OF HEARING 04-06-2012 DATE OF PRONOUNCEMENT 08-06-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 23.11.2009 BY THE ASSESSEE AGA INST AN ORDER DATED 22.09.2009 OF THE CIT(A)-XXIV, NEW DELHI, RAI SES THE FOLLOWING GROUNDS:- 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. AO LEVY ING PENALTY U/S 271(1)(C). 2) THE ASSESSEE MAY PLEASE BE ALLOWED TO ADD, DELET E, ALTER AND MODIFY ANY GROUND OF APPEAL. 2. THIS APPEAL EARLIER DISPOSED OF EXPARTE VIDE O RDER DATED 6 TH SEPTEMBER, 2011 WAS RECALLED VIDE ORDER DATED 2 ND MARCH, 2012 IN M.A. NO.327/DEL./2011. 3. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING INCOME OF ` 75,180/- FILED ON 01.02.2005 BY THE ASSESSEE, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT, WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT, ISSUED ON ITA NO.4462/DEL./2009 2 14.11.2005. IN THIS CASE, A SURVEY WAS CONDUCTED U /S 133A OF THE ACT ON 12 TH DECEMBER, 2003 IN THE BUSINESS PREMISES OF THE ASS ESSEE, WHEN THE ASSESSEE DISCLOSED ADDITIONAL INCOME OF ` ` 10,39,079/- ON ACCOUNT OF UNACCOUNTED RAW MATERIAL AND MACHINERY. HOWEVER, THE ASSESSEE DID N OT DISCLOSE THE SURRENDERED AMOUNT IN HIS RETURN FILED ON 01.02.2005. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, TO A QUERY BY THE ASSESSING OFFICER[A O IN SHORT] THE ASSESSEE REPLIED THAT TAX WAS PAID ON THE SURRENDERED AMOUN T AND ENTRIES PASSED IN THE RELEVANT ACCOUNTS. THE ASSESSEE ALSO SUBMITTED REVI SED COMPUTATION OF INCOME[PG 15 OF THE PB] ,WHEREIN TOTAL INCOME OF ` 11,07,480/- HAS BEEN WORKED OUT. HOWEVER, IN THE ASSESSMENT ORDER TAXABLE INC OME AS PER REVISED COMPUTATION HAS BEEN SHOWN AT ` 11,14,254/- IN THE BODY OF THE ORDER AND 11,14,225/- IN THE COMPUTATION OF INCOME.. THE ASSE SSEE ALSO SUBMITTED THAT DURING THE SURVEY, EXCESS STOCK TO THE TUNE OF ` `5,28,050/- AND UNACCOUNTED MACHINERY PURCHASED OUTSIDE THE BOOKS TO THE TUNE OF ` `5,11,000/-WAS DISCLOSED AND IS ACCOUNTED FOR IN THE REVISED COMPUTATION. AC CORDINGLY, THE AO COMPLETED THE ASSESSMENT VIDE ORDER DATED 27.12.2006 U/S 143( 3) OF THE ACT IN TERMS OF THE REVISED COMPUTATION. INTER ALIA, PENALTY PROCEEDIN GS U/S 271(1)(C) OF THE ACT WERE INITIATED ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING THE SURRENDERED AMOUNT AND FOR CONCEALMENT OF INCOME DE TECTED DURING THE COURSE OF SURVEY. LATER, IN RESPONSE TO A SHOW CAUSE NOTIC E DATED 25.5.2007, THE ASSESSEE REPLIED THAT SURRENDER WAS MADE BEFORE THE DEPARTMENT TO MAINTAIN PEACE AND AVOID LITIGATION AND ON THE CONDITION THA T NO PENALTY WOULD BE LEVIED. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF T HE ASSESSEE ON THE GROUND THAT SURRENDERED AMOUNT WAS NOT DISCLOSED VOLUNTARI LY IN THE RETURN FILED ON 1.2.2005 AND REVISED COMPUTATION WAS FILED ONLY WHE N THE ASSESSEE WAS CONFRONTED. ACCORDINGLY, THE AO IMPOSED A PENALTY OF ` 3,63,133/-U/S 271(1)(C) OF THE ACT, INVOKING, INTER ALIA, EXPLANATION 1 TO SEC TION 271(1)(C) OF THE ACT. 4. ON APPEAL, THE LD. CIT(A) UPHELD THE LEVY OF PENALTY IN THE FOLLOWING TERMS:- ITA NO.4462/DEL./2009 3 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE SUBMISSIONS OF THE APPELLANT. THE PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN LEVIED ON THE ISSUE OF NON-DECLARATION OF A PART OF INCOME WHILE FILING THE RETURN OF INCOME. THAT PAR T OF INCOME CORRESPONDS TO THE AMOUNT SURRENDERED AT ` `10,39,079/- BY THE APPELLANT DURING THE COURSE OF SURVEY PROCEEDINGS U /S 133A OF THE ACT. FOR PROPER APPRECIATION OF THE ISSUE, THE REL EVANT FACTS HAVE TO BE TAKEN INTO CONSIDERATION. FIRSTLY, THE DISCOVER Y OF THE CONCEALMENT, BY WAY OF STOCK AND MACHINERY NOT RECO RDED IN BOOKS OF ACCOUNTS WAS MADE BY THE AO PRIOR TO CONCLUSION OF THE ASSESSMENT PROCEEDINGS I.E. AT THE TIME OF SURVEY O PERATION ITSELF. SECONDLY, THE AO FOUND OUT THAT THE ASSESSEE HAD NO T RETURNED THE SURRENDERED INCOME FOR THE YEAR UNDER CONSIDERATION AND IT THEREFORE, AMOUNTED TO CONCEALMENT AND FURNISHING O F INACCURATE PARTICULARS OF INCOME. 4.1 THE COUNSEL OF THE APPELLANT HAS MAINLY MADE T WO ARGUMENTS. FIRSTLY, CERTAIN MATERIAL OF INVENTORY AND MACHINERY OF ` `10,39,079/- FOUND UNRECORDED IN THE BOOKS OF ACCOU NTS WAS OWING TO THE FACT THAT THE SAME WAS PENDING TO BE E NTERED IN THE BOOKS OF ACCOUNTS, AS A USUAL PRACTICE OF BUSINESS. SECONDLY, NON- INCLUSION OF ` 10,39,079/- IN THE INCOME WHILE FILING THE RETURN O F INCOME WAS NOT A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE RATHER IT WAS DUE TO OMISSION AND THE ASSESSEE HAD ALREADY PAID TAXES ON THE SURRENDERED AMOUNT WITH THE CONDITION THAT NO PENALTY PROCEEDINGS WOULD BE INITIATED AGAINST HIM. THE AS SESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 271(1)(C) MER ELY BY TAKING AN ADVERSE VIEW OF NON-DECLARATION OF THE SURRENDERED INCOME. 4.2 AS FAR AS THE ARGUMENT, THAT THE MATERIAL OF I NVENTORY AND MACHINERY OF ` ` 10,39,079/- FOUND UN-RECORDED IN THE BOOKS OF ACCOUNTS WAS PENDING TO BE ENTERED IN THE BOOKS IN THE USUAL COURSE OF BUSINESS; IS CONCERNED. I FIND THE CONTE NTION OF THE ASSESSEE A FAR FETCHED IDEA. IF THE SAME WAS NOT E NTERED IN THE BOOKS TILL THE DATE OF SURVEY, IT COULD HAVE BEEN D ONE WHILE DRAWING THE TRADING ACCOUNT AND BALANCE SHEET DURING THE SU RVEY PROCEEDINGS. EVEN, FOR THE SAKE OF NATURAL JUSTICE IT MIGHT BE UNDERSTOOD THAT THE ASSESSEE WAS IN DURESS AND TENS E AT THE TIME OF SURVEY, THE ASSESSEE WAS FREE TO RECTIFY THIS MI STAKE AND POINT OUT THE SAME BEFORE THE ASSESSING OFFICER IN A FOLL OW-UP AFTER COMPLETION OF SURVEY PROCEEDINGS. NEITHER THE ASSE SSEE OPTED TO ENTER THE SAME IN THE BOOKS OF ACCOUNT AND RETRACT FROM HIS SURRENDER NOR THE ASSESSEE OPTED TO ACCOUNT FOR THE ALLEGED PENDING ENTRIES TO STREAMLINE HIS BOOKS OF ACCOUN TS AND SUBMIT HIS RETURN OF INCOME ACCORDING TO THE SAME. ITA NO.4462/DEL./2009 4 4.3 THE EXISTING FACTS OF THIS MATTER CLEARLY INDI CATE THAT ` ` 10,39,079/- WAS NOTHING BUT UNACCOUNTED INCOME OF T HE ASSESSEE AS PURCHASES OF THE STOCK IN TRADE AND MACHINERIES WERE KEPT UNDISCLOSED TO EVADE TAX AND THE SAME WAS DISCOVERE D DURING THE COURSE OF SURVEY OPERATION AND THE ASSESSEE DID NOT CHALLENGE THIS FACT EITHER AFTER THE SURVEY OR IN RETURN OF INCOME OR DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS NOT CHALL ENGED THE FINDINGS OF THE ASSESSING OFFICER REGARDING FACTUM OF CONCEALED INCOME BEFORE ME EITHER, IN THE COURSE OF THESE PRO CEEDINGS, WHICH IS EVIDENT FROM THE ARGUMENTS PUT FORTH BY THE COUN SEL OF THE APPELLANT. THEREFORE, IT WAS CONCLUSIVELY PROVED B Y THE AO THAT THE ASSESSEE HAD DERIVED INCOME OF ` `10,39,079/- OUT OF THE BOOKS WHICH WAS FOUND INVESTED IN INVENTORY AND MACHINERY . THIS INCOME WOULD HAVE NOT BEEN OFFERED FOR TAX IF SURVEY WOULD HAVE NOT CONDUCTED. AT THIS STAGE, THE ARGUMENT THAT THE UN ACCOUNTED INVENTORY AND MACHINERY WAS PENDING FOR INCLUSION, FAILS IN ITS ENTIRETY. 4.1 THEREAFTER, THE LD. CIT(A) WHILE REFERRING TO A NUMBER OF DECISIONS IN KC BUILDERS VS. ACIT,265 ITR 562(SC);BA BALASUBRAMANIA M & BROS VS.CIT,236 ITR977(SC);UOI VS. DHARMENDRA TEXTILE PROCESSORS,29 5 ITR 244(SC);JASWANT RAI & ANOTHER VS. CBDT,133 ITR 19(DEL.);ACIT VS. JA SUBHAI BUSINESS SERVICE (P) LTD,5 SOT 36(MUM);DCIT VS. KR MALAIMATHI,99 ITD 359(CHENNAI);SREE NITHYA KALYANI TEXTILES LTD. VS. DCIT,282 ITR154(MA D.);CIT VS. MASTER SUNIL R KALRO,292 ITR 86(KAR);DURGA TIMBER WORKS VS. CIT,79 ITR 63(DEL.);BANARAS CHEMICAL FACTORY VS. CIT,108 ITR 96(ALL.);INDIA SEA FOODS VS. CIT,114 ITR 124(KER);CIT VS. PB SHAH & CO(P) LTD.,113 ITR 587(C AL.),KRISHNA KUMARI CHAMANLAL VS. CIT,217 ITR 645(BOM.);CK RAO VS. C. S UBBARAO,AIR 1971 SC 1542;WESTERN AUTOMOBILES(INDIA) VS. CIT,112 ITR 10 48(BOM.);ADDL. CIT VS.SMT. CHANDRAKANTA & ANR.,205 ITR 607(MP);SS RATANCHAND B HOLANATH VS. CIT,210 ITR 682(MP);CIT VS. SREE KRISHNA TRAINING CO.,253 I TR 645(KER);ELECTRICAL AGENCIES CORPORATION VS. CIT,253 ITR 619(DEL.) & KP MADHUSUDANAN VS. CIT,251 ITR 99(SC) HELD THAT THE AO HAS CONCLUSIVE LY ESTABLISHED THE CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS THEREOF. ITA NO.4462/DEL./2009 5 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE WHILE CARRYING US THROUGH THE IMPUGNED ORDER CONTENDED THAT THE AS SESSEE HAD NO INTENTION OF CONCEALMENT OF INCOME IN THE RETURN, AMOUNT HAVING BEEN SURRENDERED AT THE TIME OF SURVEY AND DISCLOSED IN THE REVISED COMPUTA TION OF INCOME FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. TO A QUERY B Y THE BENCH, THE LD. AR REPLIED THAT THE ASSESSEE HAD ALSO PAID ADVANCE TAX OF ` `3 LACS THROUGH POST DATED CHEQUES HANDED OVER DURING THE SURVEY IN INS TALMENTS OF ` 1 LAC EACH ON 19.12.2003,20.2.2004 & 23.12.2004.. WHILE RELYING UPON DECISIONS IN CIT VS. V NARSIMHA PRASAD, 250 ITR 852 (KARNATAKA); & CIT VS. S.A.S. PHARMACEUTICALS, 335 ITR 259(DEL.), THE LD. AR VEHEMENTLY ARGUED THA T LEVY OF PENALTY WAS NOT JUSTIFIED. 6. ON THE OTHER HAND, THE LD. DR SUPPORTED THE IMP UGNED ORDER OF THE LD.CIT(A) WHILE RELYING D UPON THE DECISIONS IN CIT VS. K. P. SAMPATH REDDY , 197 ITR 232 (KARNATAKA) & CIT VS. C ANANTHAN CHETTIAR,2 73 ITR 401 (MADRAS).THE LD. DR ADDED THAT MERE SURRENDER OF THE AMOUNT DOES NOT ABSOLVE THE ASSESSEE FROM LEVY OF PENALTY. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISIONS. INDISPUTA BLY, THE DISCLOSURE OF AN AMOUNT OF ` 10,39,079 WAS MADE DURING THE COURSE OF SURVEY U/S 133A OF THE ACT CONDUCTED IN THE PREM ISES OF THE ASSESSEE ON 12.12.2003(WRONGLY MENTIONED 12.12.2005 IN THE PENALTY ORDER AND IMPUGNED ORDER) AND THE ASSESSEE IS ALSO STATED TO HAVE PAID TAX OF ` 3 LACS IN THREE INSTALMENTS OF ` 1 LAC EACH ON 19.12.2003,20.2.2004 & 23.12.2004 BEFORE FILING THE RETURN. HOWEVER, INADVERTENTLY, THE SURRENDERED AMOUNT WAS NOT DISCLOSED IN THE RETURN FILED ON 1.2.2005 NOR CREDIT FOR TAX OF ` 3 LACS PAID BY THE ASSESSEE BEFORE FILING THE RETURN, WAS SOUGHT. WHEN CONFRONTED, THE ASSESSEE IMMEDIATELY SUBMITTED A REVISED COMPUT ATION OF ITA NO.4462/DEL./2009 6 INCOME, DISCLOSING THE SURRENDERED AMOUNT AND TAX P AID THEREON. .THE AO ,ACCORDINGLY, COMPLETED THE ASSESSMENT ON T HE BASIS OF REVISED COMPUTATION OF INCOME. SINCE THE ENTIRE AMO UNT DISCLOSED DURING THE COURSE OF SURVEY WAS OFFERED TO TAX DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS AND TAX WAS PAID ON THE SURR ENDERED AMOUNT BEFORE FILING THE RETURN FOR THE YEAR UNDER CONSIDERATION , WE ARE OF THE OPINION THAT NO PENALTY IS LEVIABLE IN S UCH SITUATION. IT IS WELL ESTABLISHED THAT THE CONCEALMENT OF THE PARTIC ULARS OF INCOME IS EFFECTED ONLY WHEN AN ASSESSEE FILES THE RETURN O F INCOME AND DOES NOT DISCLOSE THE PARTICULARS OF INCOME OF THAT YEAR [BRIJ MOHAN VS. CIT, 120 ITR 1(SC),CIT VS. ONKAR SARAN & SONS,195 ITR1(SC),B.N.S HARMA VS. CIT,226 ITR 442(SC)]. THE BASIS FOR LEVY OF PENALTY IS RETURN OF INCOME. IF ANY AMOUNT HAS BEEN SHOWN IN THE RETURN OF INCOME THEN IT CANNOT B E SAID THAT ASSESSEE HAS CONCEALED ANY PARTICULARS OF THAT INCOME OR FURNISH ED INACCURATE PARTICULARS THEREOF. THERE CANNOT BE ANY CONCEALMENT PRIOR TO F ILING OF RETURN AND CERTAINLY NOT DURING THE SURVEY PROCEEDINGS AS HELD IN S.A.S. PHARMACEUTICALS(SUPRA). HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. UNIQUE PRECURED RETRADERS [2008] 13 DTR (RAJ) 215 CONCLUDE D THAT NO PENALTY IS LEVIABLE IN RESPECT OF DISCLOSURE OF ADD ITIONAL INCOME AFTER THE SURVEY. 7.1 NOW ADVERTING TO DECISIONS RELIED UPON BY THE L D. DR. IN K. P. SAMPATH REDDY(SUPRA) THE ASSESSEE HAD FILED A RETURN OF HIS INCOME AT ` . 11,310/- FOR THE ASSESSMENT YEAR 1976-77 FROM HIS BUSINESS IN KIRANA . THE ITO SUSPECTED THE CORRECTNESS OF THIS RETURN. THEREAFTER, THE ASSESSE E FILED A REVISED RETURN SHOWING AN INCOME OF ` 69,800. DURING THE SURVEY OF HIS BUSINESS, BOOKS O F ACCOUNTS WERE IMPOUNDED, WHICH RECORDED SEVERAL ERRONEOUS EN TRIES. WHILE THE INVESTIGATION WAS IN PROGRESS AS TO THE STOCKS, SAL ES AND VARIOUS CASH CREDIT ENTRIES, THE ASSESSEE FILED HIS REVISED RETURNS FOR THE YEARS 1972-73, 1973-74 AND 1974-75, IN RESPONSE TO A NOTICE ISSUED UNDER SECTI ON 148, IN WHICH THE ASSESSEE DISCLOSED A TOTAL INCOME OF ` . 3,00,840 FOR THE THREE YEARS. THE ITO ITA NO.4462/DEL./2009 7 FOUND THE BOOKS OF ACCOUNT NOT DEPENDABLE AND THE I NCOME STATED IN THE REVISED RETURNS UNACCEPTABLE. ULTIMATELY, ON A CONSIDERATIO N OF SEVERAL FACTORS, THE TOTAL INCOME FOR THE YEARS 1972-73 TO 1977-78 WAS ESTIMAT ED AT ` . 6,00,000 FOR THE ASSESSMENT YEAR 1976-77, THE INCOME ALLOCATED FOR T HE PERIOD THUS ARRIVED AT WAS ` . 1,44,000.ON THE DATE OF THE ASSESSMENT, THE ASSES SEE GAVE A LETTER TO THE ITO, AGREEING TO THE TOTAL INCOME OF ` . 6,00,000 AS ESTIMATED BY THE INCOME-TAX OFFICER. THE ITO, ACCORDINGLY, CONCLUDED THE ASSESS MENTS AND THEN SIMULTANEOUSLY PENALTY PROCEEDINGS WERE INITIATED, INTER ALIA, U/S 271(1)(C) FOR CONCEALMENT OF INCOME BY THE ASSESSEE IN THE RETURN S FILED BY THE ASSESSEE ; SUBSEQUENTLY, PENALTY WAS LEVIED AT 100 PER CENT. O F THE TAX LEVIED. THE ASSESSEE APPEALED AND CONTENDED THAT HE AGREED TO HAVE THE A SSESSMENTS MADE ON A TOTAL INCOME OF ` . 6,00,000 FOR THE YEARS 1972-73 TO 1977-78, AND TH E ASSESSMENT ORDER WAS THE RESULT OF THE AGREEMENT WI TH THE REVENUE AND, THEREFORE, PENALTY OUGHT NOT TO HAVE BEEN LEVIED. T HE ALLEGED AGREEMENT WAS HELD NOT PROVED BEFORE THE COMMISSIONER (APPEALS). THE ITAT, HOWEVER, CANCELLED THE PENALTY ON THE GROUND THAT THE ASSESS MENT ORDER DID NOT SHOW ANY OTHER BASIS FOR DETERMINING THE INCOME ASSESSABLE F OR THIS ASSESSMENT YEAR, EXCEPT THE LETTER DATED MARCH 28, 1979. ACCORDINGLY , IT WAS CONCLUDED PENALTY COULD NOT BE IMPOSED ON THE BASIS OF THE LETTER OF THE ASSESSEE. HOWEVER, ,THE HONBLE HIGH COURT HELD THAT THE APPELLATE TRIBUNAL COMPLETELY IGNORED THE ASSESSMENT ORDER WHICH WAS NOT BASED ON ANY CONCESS ION BY THE ASSESSEE; CONCEALMENT OF INCOME IN THE RETURN FILED BY THE AS SESSEE BEING A GLARING FACT AND IT WAS NOT POSSIBLE TO INFER ANY AGREEMENT BY T HE REVENUE, EITHER IN CLEAR TERMS OR BY NECESSARY IMPLICATION, TO ACT ON THE BA SIS OF THE ASSESSEE'S LETTER. BUT SUCH ARE NOT THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE, WHEREIN INCOME SURRENDERED DURING THE COURSE OF SURVEY WAS, INADV ERTENTLY, NOT SHOWN IN THE SUBSEQUENT RETURN. THE ASSESSEE BEFORE US HAD EVEN PAID THE TAX DUE ON THE SURRENDERED AMOUNT AND IMMEDIATELY ON BEING POINTE D OUT, THE ASSESSEE REALIZED THE MISTAKE AND FILED REVISED COMPUTATION OF INCOME. THUS, RELIANCE BY THE LD. DR ON THE AFORESAID DECISION IS TOTALLY MIS PLACED. ITA NO.4462/DEL./2009 8 7.2 FACTS, IN THE OTHER DECISION RELIED ON BY THE LD. DR IN C ANANTHAN CHETTIAR(SUPRA) ARE THAT CONSEQUENT TO A SEARCH I N THE ASSESSEE'S SHOP AND RESIDENCE ON NOVEMBER 22,1985, WHEN CASH, JEWELLERY AND CERTAIN DOCUMENTS WERE SEIZED, A REVISED RETURN FOR THE AY 1986-87WAS FILED BY THE ASSESSEE FOR THIS ASSESSMENT YEAR, WHICH RETURN WAS ACCEPTED AND ASSESSMENT MADE ON THE BASIS OF THAT RETURN. IN RESPONSE TO A NOTICE SEEK ING TO IMPOSE PENALTY, THE ASSESSEE TOOK THE STAND THAT THERE WAS NO CONCEALME NT AND IT WAS ONLY FOR THE PURPOSE OF BUYING PEACE WITH THE DEPARTMENT THAT TH E ADDITIONAL INCOME WAS DISCLOSED AND THE RETURN FILED. THE TRIBUNAL, RELYI NG ON THE DECISION OF THE SUPREME COURT IN THE CASE OF SIR SHADILAL SUGAR AND GENERAL MILLS LTD. V. CIT [1987] 168 ITR 705 , HELD THAT NO PENALTY WAS IN THE CIRCUMSTANCES LEV IABLE. HONBLE HIGH COURT WHILE RELYING UPON EXPLANATION T O SECTION 271(1)(C) OF THE ACT AND THE DECISION IN THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99 (SC), UPHELD THE LEVY OF PENALTY, THE REASON FOR NO T HAVING DISCLOSED THE INCOME EARLIER HAVING NOT BEEN STATED. AS IS APPARENT FROM THESE FACTS, SUCH IS NOT THE SITUATION IN THE CASE BEFORE US NOR THE LD. DR DEMO NSTRATED BEFORE US AS TO HOW THIS DECISION HELPS THE REVENUE. 8. MERE ENQUIRY ABOUT SURRENDERED INCOME HAVING NOT BEEN SHOWN IN THE RETURN, DOES NOT TANTAMOUNT TO DETECTION OF CONCEAL MENT OF INCOME U/S. 271(1)(C) OF THE ACT . HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF C IT V. S.V. ELECTRICALS P. LTD., 155 TAXMAN 158 AND HONBLE JH ARKHAND HIGH COURT IN CIT V. ASHIM KUMAR AGARWAL, 153 TAXMAN 226 HELD THAT WHER E THE ASSESSEE SURRENDERS HIS FULL INCOME, THOUGH AT A LATER STAGE , THERE WAS NO QUESTION OF ANY CONCEALMENT ON HIS PART AND CONSEQUENTLY NO PENALTY UNDER SECTION 271(1)(C) WAS LEVIABLE, AND THAT A OMISSION FROM RETURN OF IN COME DID NOT AMOUNT TO CONCEALMENT. HONBLE JURISDICTIONAL HIGH COURT WHIL E ADJUDICATING THE ISSUE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IN THE CAS E OF CIT VS. HARNARAIN IN THEIR DECISION DATED 31 ST OCTOBER,2011 IN ITA NO.2072/2010 CONCLUDED THAT SURRENDER OF THE AMOUNT BY THE ASSESSEE AFTER RECEIPT OF THE QUESTIONNAIRE COULD NOT LEAD TO AN INFERENCE THAT IT WAS NOT VOLUNTARY, IN THE ABSE NCE OF ANY MATERIAL ON RECORD TO ITA NO.4462/DEL./2009 9 SUGGEST THAT IT WAS BOGUS OR UNTRUE. IT IS FURTHER EVIDENT THAT THERE WAS NEITHER ANY DETECTION NOR ANY INFORMATION IN THE POSSESSION OF THE REVENUE WHICH MIGHT LEAD TO A CONCLUSION THAT THERE WAS A DETECTION BY THE REVENUE OF CONCEALMENT. ACCORDINGLY, THE QUESTION OF LAW FRAMED IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 8.1. IN THE INSTANT CASE, NOT ONLY THE ASSESSEE S URRENDERED THE INCOME DURING THE COURSE OF SURVEY, HE PAID TAX OF 3 LACS THEREON BEFORE FILING THE RETURN ON 1.2.2005.INADVERTENTLY, THE ASSESSEE DID NOT REFLECT THE SURRENDERED AMOUNT AND TAX PAID THE REON, IN THE SAID RETURN. IMMEDIATELY ON BEING POINTED OUT, A REVISED COMPUTATION OF INCOME WAS FILED, REVEALING THE SURRENDERED AMOUNT AND TAX PAID THEREON. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID T HAT SURRENDER OF INCOME WAS NOT VOLUNTARY OR THAT THE ASSESSEE WANTE D TO CONCEAL THE INCOME, ON WHICH TAX HAD ALREADY BEEN PAID. 9. IN VIEW OF THE FOREGOING, WE ARE OF THE OPINIO N THAT MERE INADVERTENCE IN NOT SHOWING THE AMOUNT SURRENDERED DURING THE COURSE OF SURVEY, ON WHICH TAX HAD ALSO BEEN PAID B EFORE FILING THE RETURN ,IN THE ABSENCE OF ANY CONCEALMENT OR FURNIS HING OF INACCURATE PARTICULARS, IS NO GROUND FOR LEVYING PE NALTY, ESPECIALLY WHEN THERE IS NOTHING ON RECORD TO SHOW THAT ANY MA TERIAL PARTICULARS WERE CONCEALED OR FURNISHED INACCURATE . IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT LEVY O F PENALTY IS NOT JUSTIFIED. CONSEQUENTLY, WE HAVE NO HESITATION IN VACATING THE FINDINGS OF THE LOWER AUTHORITIES. THEREFORE, GROUN D NO.1 IN THE APPEAL IS ALLOWED. 10. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS DISMISSED. ITA NO.4462/DEL./2009 10 11. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 12. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (G.C. GUPTA) ( A.N. PAHUJA) VICE PRESIDENT ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. INCOME-TAX OFFICER,WARD-25(3),NEW DELHI 3. CIT CONCERNED 4. CIT (APPEALS)-XXIV, NEW DELHI 5. DR, ITAT,G BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI