SUMITA SHREEGOPAL BARASIA, MUMBAI V. ASST CIT RG 16(1), MUMBAI

ITA 4909/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0225 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 14-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: SUNIL S JHUNJHUNWALA
• Keywords: Residential status; Bonafide belief; Initiation of penalty proceedings; Revised return
• Section: 143(3); 153A; 133(6)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SH. RAJENDRA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 4909/MUM/2015 ( / ASSESSMENT YEAR: 2008 - 09 ) SUNITA SHREEGOPAL BARASIA 151 - C, GRAND PRADY APARTMENTS, AUGUST KRANTI MARG, MUMBAI - 400036 / VS. A C IT RG 1 6(1 ) MUMBAI ./ ./ PAN NO. AFQPB9010G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SUNIL S. JHUNJHUNWALA / RESPONDENTBY : S HRI M. C. OMI NINGSHEN / DATE OF HEARING : 09/02/2018 / DATE OF PRONOUNCEMENT : 21/02/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 30, MUMBAI DATED 31.07 .15 F OR AY 2008 - 09 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS. 25,00,000/ - LEVIED U/S 271(L)(C) OF THE INCOME TAX ACT, 1961. 2) THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT CONSIDERING APPELLANT'S CLAIM OF BONAFIDE BELIEF THAT SHE WAS A NON - RESIDENT UNDE R FEMA. 4) THE APPELLANT SUBMITS THAT THE PENALTY LEVIED IS EXCESSIVE AND UNREASONABLE. 5) THE APPELLANTS CRAVE LEAVE TO ALTER, AMEND AND / OR ADD ANY OTHER GROUND OF APPEAL. 2. THE B RIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY AND OTHER SOURCES. THE RETURN OF INCOME FOR THE YEAR UNDER APPEAL WAS FILED ON 31.07.08 DECLARING TOTAL INCOME OF RS. 43,12,063/ - . THEREAFTER ASSESSMENT U/S 143(3) WAS COMPLETED BY THE LD. AO ON 28.12.10 DETERMINING THE TOTAL INCOME AT RS. 2,62,21,860/ - . 3 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. (1 TO 4 ) 3. SINCE ALL THE ABOVE GROUNDS RAISED BY THE ASSESSEE ARE INTER - CONNECTED AND INTER - RELATED AND RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN CONFIRMING THE PENALTY OF RS. 25,00,000/ - LEVIED U/S 271(L )(C) OF THE INCOME TAX ACT, 1961 , THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME THROUGH THE PRESENT COMMON ORDER. 4. LD. AR APPEARING ON BEHALF OF THE ASSESSEE REITERATED THE SAME ARGUMENTS BEFORE US AS WERE RAISED BEFORE LD. CIT( A). LD. AR ALSO DRAWN OUR ATTENTION TO THE WRITTEN SUBMISSIONS FILED BEFORE LD. CIT(A) WHICH IS CONTAINED IN PARA NO. 2.3.1. IT WAS FURTHER SUBMITTED BY LD. AR THAT THE ASSESSEE IS AN INDIVIDUAL BORN IN INDIA AND IN THE YEAR 1986 SHIFTED TO AUSTRALIA. IT W AS 4 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA FURTHER SUBMITTED THAT ASSESSEE IS HOLDING AUSTRALIAN PASSPORT AND IS A CITIZEN OF INDIA. HOWEVER, AROUND THE YEAR 2005, THE ASSESSEE HAD COME TO INDIA TO FIND SUITABLE MATCH FOR HER CHILDREN BUT DUE TO SOME FAMILY REASONS, HER STAY IN INDIA EXTENDED FO R SOME TIME BUT THE ASSESSEE WAS HAVING ALL THE INTENTIONS TO RETURN AUSTRALIA AND FOR THAT PURPOSE, THE ASSESSEE HAD APPLIED TO THE DEPARTMENT FOR SEEKING PERMISSION TO RESIDE IN INDIA FOR A LONGER PERIOD. IT WAS FURTHER SUBMITTED BY LD. AR THAT IF THE IN TENTION OF THE ASSESSEE WAS TO RESIDE IN INDIA THEN IN THAT EVENTUALITY, THE PERMISSION IS NOT REQUIRED. LD. AR FURTHER SUBMITTED THAT DURING THE FINANCIAL YEAR 2007 - 08, SOME OF THE FIXED DEPOSITS MAINTAINED BY THE ASSESSEE WERE MATURED AND THE MATURITY AMOUNT WAS CREDITED TO THE CAPITAL ACCOUNT BY THE ASSESSEE. THE ASSESSEE HAD CLAIMED EXEMPTION U/S 10(4)(II) OF THE I.T. ACT IN RESPECT OF INTEREST ON FIXED DEPOSITS BUT THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT ASSESSEE IS NOT A P ERSON TO RESIDE OUTSIDE INDIA AND AS PER THE PROVISIONS OF FEMA AND IS THUS NOT ENTITLED FOR EXEMPTION U/S 10(4)(II) OF THE ACT AND ACCORDINGLY MADE ADDITION TO THE ASSESSED INCOME. 5 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA LD. AR FURTHER SUBMITTED THAT ALTHOUGH THE ASSESSEE FILED THE APPEAL AGAI NST THE ASSESSMENT ORDER BEFORE LD. CIT(A), SHE WAS ADVISED BY THE TAX ADVISORS THAT IT WOULD BE A LONG LEGAL LITIGATION. HENCE IT WAS ADVISED TO REWORK THE INTEREST ON ACCRUAL BASIS AND OFFER THE SAME FOR THE TAX IN RESPECTIVE YEARS, THEREFORE NECESSARY T AX ON ACCRUAL BASIS WAS DEPOSITED BY THE ASSESSEE. LD. AR FURTHER SUBMITTED THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT T HE INTEREST RECEIPT WAS EXEMPT U/S 10(4)(II) OF THE I.T. ACT AS THE ASSESSEE IS AN NRI. IT WAS ALSO SUBMITTED THAT MERE MAKING A CLAIM WHICH DOES NOT SUSTAINABLE IN LAW BY ITSELF, WILL NOT AMOUNT TO FURNISH INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISH INACCURATE PARTICULARS AND THEREFORE, IT WAS REQUESTED BY LD. AR TO ALLOW THE APPEAL AND TO SET ASIDE THE ORDER OF PENALTY PASSED BY THE REVENUE AUTHORITIES. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS PASSED BY REVENUE AUTHORITIES. 6 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 6 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO P ERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAISED BY THE R EVENUE IN ITS DETAILED ORDER. THE OPERATIVE PORTION OF THE ORDER OF LD. CIT(A) IS CONTAINED IN PARA NO. 3.1 TO 3.22 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 3.1 ALL THE GROUNDS OF APPEAL ARE IN RESPECT OF IMPOSITION OF PENALTY OFRS, 25,00,000/ - U/S .271(1)(C) OF THE LT. ACT, 1961. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE APPELLANT HAD SHOWN RS. 31,44,35,710/ - IN HER CAPITAL ACCOUNT AS FUNDS TRANSFERRED FROM NRE BANK ACCOUNT WHICH INCLUDED AN AMOUNT OF RS. 2,19,09,166/ - BEING INTEREST ON NRE FIXED DEPOSITS. IT WAS FURTHER NOTED THAT THE APPELLANT HAD STAYED IN INDIA FOR MORE THAN 182 DAYS DURING THE F.Y. 2007 - 08 RELEVANT TO THE A.Y. 2008 - 09. HENCE, THE APPELLANT WAS A RESIDENT ACCORDING TO SECTION 6 OF THE I.T. ACT, 196 1 AND HAD TO OFFER HER GLOBAL INCOME FOR TAXATION FOR WHICH THE APPELLANT HAD GIVEN AN AFFIDAVITSTATING THAT THE GLOBAL INCOME HAD BEEN OFFERED FOR TAXATION. SUBJECT TO THEDETAILED DISCUSSION AND MARSHALLING OF THE FACTS, LD. AO DENIED THE APPELLANT'S CLAI M OF EXEMPTION U/S. 10(4)(II) OF THE ACT AND ADD AN AMOUNT OF RS. 2,19,09,166/ - 7 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA THE AO FURTHER LEVIED PENALTY OF RS. 25,00,000/ - U/S. 271(1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME. 3.2 IT IS SUBMITTED THAT BY THE APPELLANT IS HOLDING AUSTRA LIAN PASSPORT ANDIS A CITIZEN OF AUSTRALIA. THE APPELLANT HAS COME TO INDIA AROUND 2005 TO FIND SUITABLE MATCH FOR HER CHILDREN. DUE TO SOME FAMILY REASONS HER STAY IN INDIA EXTENDED FOR SOME TIME BUT SHE WAS HAVING ALL THE INTENTIONS TO RETURN TO AUSTRALI A. THE APPELLANT APPLIED TO THE CONCERNED AUTHORITY FOR PERMISSION TO RESIDE IN INDIA FOR A LONGER PERIOD. THE FOREIGNERS REGIONAL REGISTRATION OFFICER, MUMBAI GRANTED THE PERMISSION TO THE APPELLANT TO STAY UP TO 5TH JUNE, 2020. THIS PERMISSION IS REQUIRE D WHEN THE PERSON INTENDS TO RESIDE TEMPORARILY IN INDIA AND WANTS TO GO BACK OVERSEAS. IF THE INTENTION WAS TO RESIDE PERMANENTLY IN INDIA THEN THIS PERMISSION WAS NOT REQUIRED. THE APPELLANT HAS PLACED SOME NRE FIXED DEPOSITS DURING MARCH APRIL, 2000 FOR THE PERIOD OF 10 YEARS. ALSO SOME DEPOSITS WERE PLACED IN THE YEAR 2003 AND 2004. THE APPELLANT ACCRUED THE INTEREST ON THE SAME YEAR ON YEAR AND DURING THE FINANCIAL YEAR 2007 - 08 SOME OF THE FIXEDDEPOSITS MATURED AND THE MATURITY AMOUNT (I.E. PRINCIPLE A MOUNT PLUS INTEREST) WERE CREDITED TO CAPITAL ACCOUNT OF THE APPELLANT. THE APPELLANT HAS CLAIMED EXEMPTION U/S 10(4)(II) OF THE ACT IN RESPECT OF INTEREST ON FIXED DEPOSITS. THE SECTION PROVIDES AS UNDER: 'IN THE CASE OF AN INDIVIDUAL, ANY INCOME BY WAY OF INTEREST ON MONEYS STANDING TO HIS CREDIT IN A NON - RESIDENT (EXTERNAL) ACCOUNT IN ANY BANK IN INDIA IN ACCORDANCE WITH THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 (42 OF 1999)1 AND THE RULES MADE THERE UNDER. PROVIDED THAT SUCH INDIVIDUAL IS A PERSON RESI DENT OUTSIDE INDIA AS DEFINED IN CLAUSE (Q) OF SECTION 2 OF THE SAID ACT OR IS A PERSON WHO HAS BEEN 8 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA PERMITTED BY THE RESERVE BANK OF INDIA TO MAINTAIN THE AFORESAID ACCOUNT.' 3.3 IT IS SUBMITTED THAT BY THE APPELLANT WAS UNDER A BONAFIDE BELIEF THATSINCE HER INTENTION IS TO GO BACK TO AUSTRALIA, SHE CONTINUES TO BE A PERSON RESIDENT OUTSIDE INDIA AS PER PROVISIONS OF SECTION 2(Q) OF FEMA. ACCORDINGLY, SHE HAS CLAIMED EXEMPTION OF INTEREST INCOME IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE APPELLANT HAS ALSO RELIED ON A DECISION OF FOREIGN EXCHANGE REGULATION APPELLATE BOARD IN THE CASE OF RA MINDER SINGH DUGGAL V/S DIRECTOR OF ENFORCEMENT. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) OF THE ACT TO UNION BANK OF INDIA AND STA TE BANK OF INDIA. BOTH THE BANKS HAVE CONFIRMED THAT THE APPELLANT HAS NRI (EXTERNAL) ACCOUNT WITH THE BANK FIXED DEPOSITS HAVE BEEN MADE OUT OF NRI FUNDS. STATUS OF ACCOUNT WAS NRI (EXTERNAL) ACCOUNT IN FINANCIAL YEAR 2007 - 08 3.4 IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT ACCEPTEDTHE CONTENTION OF THE APPELLANT AND HELD THAT THE ASSESSEE IS NOT A PERSON RESIDING INDIA AS PER THE PROVISIONS OF FEMA AND THEREFORE, THEAPPELLANT IS NOT ENTITLED TO EXEMPTION U/S 10(4)(II) OF THE AC T. HE ACCORDINGLY MADE AN ADDITION OF RS, 2,19,09,166/ - TO THE ASSESSED INCOME AS INTEREST RECEIVED ON FIXED DEPOSIT ON CASH BASIS. THE APPELLANT FILED AN APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF ADD ITION OF FULL AMOUNT OF RS. 2,19,09,166/ - . THEREAFTER, BEFORE THE HEARING OF THE APPEAL, THE APPELLANT CONSULTED TAX COUNSELS DURING THE YEAR 2010 - 11. THE LOT OF TIME HAS PASSED AND DUE TO FAMILY REASONS SHE CONTINUED TO STAY IN INDIA. UNDER THESE CIRCUMST ANCES, SHE WAS ADVISED THAT IT WOULD BE LONG 9 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA LEGAL LITIGATION. THE APPELLANT THEREAFTER REWORKED THE INTEREST ON ACCRUAL BASIS AND OFFERED THE SAME FOR THE TAX IN RESPECTIVE YEARS. THE APPELLANT ALSO FILED THE ADDITIONAL GROUND OF APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) FOR THE A.Y. 2008 - 09 WHEREIN SHE HAS OFFERED FOR TAX INTEREST OF RS. 1,20,22,528/ - CALCULATED ON ACCRUAL BASIS. THE APPELLANT ALSO CLAIMED IN THE ADDITIONAL GROUND THAT THE RATE OF TAX ON THIS NRI DEPOSIT WOULD BE 20% AS PER S ECTION 115E OF THE ACT. 3.5 THE APPELLANT ALSO FILED DETAILS OF INCOME OFFERED IN OTHER YEARS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE LETTER DATED 17TH JULY, 2012. CONSIDERING THE FACTS OF THE CASE AND SUBMISSION OF THE APPELLANT, THE THEN LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) - 27 VIDE HIS ORDER DATED 24TH JULY 2012 HAS HELD AS UNDER - '6.1) IN VIEW OF THE ABOVE DISCUSSION, IN THE GIVEN FACTS AND CIRCUMSTANCES, / AM OF THE CONSIDERED OPINION THAT THE APPELLANT'S REQUEST FOR TAXING THE E D INTEREST INCOME ON ACCRUAL BASIS IS REASONABLE. ACCORDINGLY, THE A.O IS DIRECTED TO VERIFY THE WORKINGS OF THE FD INTEREST FURNISHED BY THE APPELLANT AND BRING THE APPROPRIATE AMOUNT TO TAX ON ACCRUAL BASIS. FURTHER, THE A.O IS AT LIBERTY TO TAKE APPROPR IATE ACTION FOR THE ASSESSMENT YEARS TO BRING THE ED INTEREST INCOME TO TAX ON ACCRUAL BASIS. ACCORDINGLY, THE APPELLANT'S GROUND FOR TAXING THE ADDITIONAL ED INTEREST INCOME ON ACCRUAL BASIS IS ALLOWED.' '71) FROM THE ABOVE READING OF THE SECTION, IT IS C LEAR THAT THE PROVISIONS OF SECTION 115E SHALL BE MADE APPLICABLE TO THE APPELLANT ALSO IN CASE SHE FURNISHES A DECLARATION AS REQUIRED UNDER SECTION 115H. IN OTHER WORDS, THE PROVISIONS OF SECTION 115E WHICH ARE APPLICABLE IN THE NORMAL COURSE 10 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA TO A NON - RE SIDENT INDIAN ARE APPLICABLE TO A RESIDENT ALSO IF HE OR SHE FULFILLS THE CONDITIONS LAID DOWN IN SECTION 115H. SECONDLY, IT IS AN UNDISPUTED FACT THAT THE IMPUGNED FIXED DEPOSITS IN THE PRESENT CASE WERE MADE OUT OF FUNDS AVAILABLE IN THE APPELLANT'S NRE ACCOUNTS AND THEREFORE, THE SAME CONSTITUTES A FOREIGN EXCHANGE ASSET AS DEFINED IN CLAUSE (B) OF SECTION 115C RE CLAUSE (F) OF THE SAID SECTION, THIRDLY, AS PER PROVISIONS OF SECTION 115C (F)(III), THE DEPOSITS WITH AN INDIAN COMPANY, WHICH IS NOT A PRIVA TE COMPANY AS DEFINED IN THE COMPANY ACT, ORE REGARDED AS SPECIFIED ASSETS FOR THIS PURPOSE AND THEREFORE, THE DEPOSITS PLACED WITH THE BANKS NAMELY UB!, SB! AND TMB IN THE PRESENT CASE, WHICH ARE NOT PRIVATE COMPANIES, FALL IN THE CATEGORY OF SPECIFIED AS SETS FOR THE PURPOSE OF THIS CHAPTER. ACCORDINGLY, / AM OF THE CONSIDERED OPINION THAT THE INTEREST EARNED BY THE APPELLANT ON FDS PLACED WITH THE AFORESAID BANK IS AN ELIGIBLE INCOME TO BE TAXED AT 20% U/S. 115E OF THE ACT.' 3.6 THE APPELLANT WAS UNDER A BONAFIED BELIEF THAT SHE WAS A 'NON - RESIDENT' UNDER FEMA. THE APPELLANT HAS RECEIVED INTEREST ON NRE DEPOSITS. BASED ON HER UNDERSTANDING THAT SHE IS A NON - RESIDENT UNDER FEMA, SHE HAS CLAIMED EXEMPTIONS U/S 10(4)(II) OF THE ACT FOR THIS INTEREST. THE BE LIEF OF THE APPELLANT FURTHER FORTIFIED BY THE FACT WHEN THE BANK ALSO DID NOT DEDUCT TAX AT SOURCE ON THE MATURITY VALUE OF THE FIXED DEPOSIT. THE NON DISCLOSURE OF INTEREST WAS UNDER THE BONAFIDE BELIEF THAT THE SAME IS EXEMPT U/S 10(4) OF THE ACT. 3.7 IT WAS A BONAFIDE BELIEF SUPPORTED BY FACTS AND CIRCUMSTANCES. ONRECEIPT OF THE ASSESSMENT ORDER FOR AY 2008 - 09, THE APPELLANT REVIEWED THE WHOLE THING WITH HER TAX CONSULTANTS. SHE WAS ADVISED THAT CLAIMING EXEMPTION U/S 10(4)(II) WILL LEAD TO A LONG LITI GATION. TO END THE LITIGATION AND BUY PEACE, THE 11 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA APPELLANT IMMEDIATELY ON ADVICE OF TAX CONSULTANT CALCULATEDINTEREST INCOME ON ACCRUAL BASIS AND OFFERED IT FOR TAX FOR ALL THE YEARS ANDPAID THE TAXES ON THE SAME WITH INTEREST. 3.8 THERE IS NO DISPUTE ON T HE FACT THAT THE APPELLANT HAD RECALCULATED THEINTEREST BY HER ON THE RECEIPT OF THE ASSESSMENT ORDER FOR AY 2008 - 09, THE APPELLANT REVIEWED THE WHOLE THING WITH HER TAX CONSULTANTS. SHE WAS ADVISED THAT CLAIMING EXEMPTION U/S 10(4)(II) WILL LEAD TO A LONG LITIGATION. TO END THE LITIGATION AND BUY PEACE, THE APPELLANT IMMEDIATELY ON ADVICE OF TAX CONSULTANT CALCULATED INTEREST INCOME ON ACCRUAL BASIS AND OFFERED IT FOR TAX FOR ALL THE YEARS AND PAID THE TAXES ON THE SAME WITH INTEREST. THIS ADMISSION ON THE PART OF THE APPELLANT ITSELF CONFIRM THAT PRIOR TO A.Y.2008 - 09, THE APPELLANT ADMITTEDLY FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND REALIZING THIS SHE REVIEWED THE WHOLE INCOME AND INTEREST THEREON ON ACCRUAL BASIS AND OFFERED IT FOR TAX FOR ALL THE YEARS AND PAID THE TAXES ON THE SAME WITH INTEREST. 3.9 IT IS A WELL SETTLED LAW THAT PENALTY PROCEEDINGS UNDER SECTION271(1)(C) CAN BE INITIATED ONLY IF THE A.O OR THE FIRST APPELLATE AUTHORITY IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THE A CT AS PER CLAUSE (C) THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE SUM MENTIONED IN SUB - CLAUSE (III) OF CLAUSE (C). THE EXPRESSION USED IN CLAUSE (C) IS HAS CONCEALED THE PARTICULARS OF HIS INCOME' OR 'FURNISHED INACCURATE PARTICULARS OF SUCH INCOME'. THEREFORE, IN BOTH CASES OF CONCEALMENT AND INACCURACY, THE PHRASE PARTICULARS OF INCOME' ARE USED. IT WILL BE NOTED THAT AS REGARDS 'CONCEALMENT', THE EXPRESSION IN CLAUSE (C) IS 'HAS CONCEALED THE PARTICULARS OF HIS INCOME' AND NOT 'HAS CONCEALED HIS INCOME'. THE EXPRESSIONS 'HAS CONCEALED THE 12 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NO T BEEN DEFINED EITHER IN SECTION 271(1)(C)OR ELSEWHERE IN THE ACT. ONE THING IS CERTAINTHAT THESE TWO CIRCUMSTANCES ARE NOT IDENTICAL IN DETAIL ALTHOUGH THEY MAY LEAD TO THE SAME EFFECT, NAMELY, KEEPING OFF ANY PORTION OF INCOME. THE FORMER IS DIRECT AND T HE LATTER MAY BE INDIRECT IN ITS EXECUTION. 3.10 THE WORD 'CONCEAL' IS DERIVED FROM THE LATIN 'CONCEKIRE' WHICHIMPLIES CON+CELARE I.E. TO HIDE. IN WEBSTER'S NEW INTERNATIONAL DICTIONARY IT IS EQUATED WITH THE MEANING 'TO HIDE OR WITHDRAW FROM OBSERVATION, TO COVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF; TO WITHHOLD KNOWLEDGE OF'. THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME - TAX AUTHORITIES. THERE IS STRICT LIABI LITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING THE RETURN. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY. IT IS OBVIOUS THAT T HE PENAL PROVISIONS WOULD OPERATE WHEN THERE IS CONCEALMENT OF PARTICULARS OF INCOME OR A FAILURE OF DUTY TO DISCLOSE FULLY AND TRULY PARTICULARS OF INCOME, IMPOSED UNDER THE ACT AND THE RULES THERE UNDER. THE DUTY IS ENJOINED UPON A PERSON TO MAKE A CORRE CT AND COMPLETE DISCLOSURE OF HIS INCOME AND IT IS ONLY WHEN HE FAILS IN HIS DUTY BY NOT DISCLOSING HIS INCOME OR PART THEREOF, HE CONCEALS THE PARTICULARS OF HIS INCOME. THE DUTY IS ENJOINED UPON HIM TO MAKE A COMPLETE DISCLOSURE OF HIS INCOME AS WELL AS A CORRECT DISCLOSURE. THEREFORE, IF THE DISCLOSURE MADE - OF THE PARTICULARS OF INCOME IS INCORRECT, THEN ALSO HE COMMITS BREACH OF HIS DUTY. SUCH DEFAULTS ENTAIL THE PENAL CONSEQUENCES CONTEMPLATED BY SECTION 271(1)(C)(III). 3.11 THERE CANNOT HOWEVER, BE A STRAIGHT JACKET FORMULA FOR DETECTION OFTHESE DEFAULTS OF CONCEALMENT OR OF FURNISHING INACCURATE PARTICULARS OF INCOME AND 13 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA INDEED CONCEALMENT OF PARTICULARS OF INCOME AND INACCURATE PARTICULARS OF INCOME MAY AT TIMES OVERLAP. IT DEPENDS UPON THE FACTS OF THE EACH CASE. IN THEASSESSMENT PROCEEDINGS, THE AD WHILE ASCERTAINING THE TOTAL INCOME CHARGEABLE TO TAX WOULD BE IN A POSITION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCOME CONCEALED OR OF WHICH FALSE PARTICULARS ARE FURNISHED. WHERE, IN THE CONSTITUENTS OF INCOME RETURNED, SUCH SPECIFIC OR DEFINITE PARTICULARS OF INCOME ARE DETECTED AS CONCEALED, IT WOULD AMOUNT TO CONCEALMENT TO THAT EXTENT. IN THE SAME WAY, WHERE SPECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DETECTED AS INACCURATE, THEN S UCH FIGURE WILL ALSO MAKE THE TOTAL INCOME INACCURATE IN PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. IN OTHER WORDS, THE AO CANNOT INVOKE PROVISION OF SECTION 271(1)(C) ON THE BASIS OF ROUTINE AND GENERAL PRESUMPTIONS. WHETHER IT BE A CASE O F ONLY CONCEALMENT OR OF ONLY INACCURACY OR BOTH, THE PARTICULARS OF INCOME SO VITIATED WOULD BE SPECIFIC AND DEFINITE AND BE KNOWN IN THE ASSESSMENT PROCEEDINGS BY THE AO, WHO ON BEING SATISFIED ABOUT EACH CONCEALMENT OR INACCURACY OF PARTICULARS OF INCOM E WOULD BE IN A POSITION TO INITIATE THE PENALTY PROCEEDINGS ON ONE OR BOTH OF THE GROUNDS OF DEFAULT AS MAY HAVE BEEN SPECIFICALLY AND DIRECTLY DETECTED. 3.12 IN ADDITION TO MAIN PROVISIONS OF CONCEALMENT 'HAS CONCEALED THEPARTICULARS OF HIS INCOME' OR 'H AS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME', THERE ARE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THE DEEMED CONCEALMENT IS PROVIDED IN EXPLANATIONS. OFTEN A QUESTION AROSE WHETHER IN CASES WHERE ADDITIONS O R DISALLOWANCES WERE MADE BY THE AD, THE PENAL PROVISIONS OF SECTION 271(1)(C) WOULD BE ATTRACTED. EXPLANATION 1 TAKES CARE OF THIS SITUATION. THE EXPLANATION TO SECTION 271(1) OF THE ACT READS AS UNDER: - 14 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 'EXPLANOTION 1. - WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE CO MPUTATION 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 FALSE, OR (B) SU CH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SOME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB - SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 3.13 A CONSPECTU S OF THE EXPLANATION MAKES IT CLEAR THAT THE STATUTEVISUALISED THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS TO BE WHOLLY DISTINCT AND INDEPENDENT OF EACH OTHER. IN ESSENCE, THE EXPLANATION IS A RULE OF EVIDENCE. PRESUMPTIONS WHICH ARE REBUTTABLE IN N ATURE ARE AVAILABLE TO BE DRAWN. THE INITIAL BURDEN OF DISCHARGING THE ONUS OF REBUTTAL IS ON THE ASSESSEE. THE RATIONALE BEHIND THIS VIEW IS THAT THE BASIC FACTS ARE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. SECTION 106 OF THE INDIAN EVIDENCE ACT, 187 2, GIVES STATUTORY RECOGNITION TO THIS UNIVERSALLY ACCEPTED RULE OF EVIDENCE. THERE IS NO DISCRETION CONFERRED ON THE ASSESSING OFFICER AS TO WHETHER HE CAN INVOKE THE EXPLANATION OR NOT. EXPLANATION 1 COMES INTO OPERATION WHEN, IN RESPECT OF ANY FACTS MAT ERIAL TO THE COMPUTATION OF TOTAL INCOME OF ANY PERSON, THERE IS FAILURE TO OFFER AN EXPLANATION OR AN EXPLANATION IS OFFERED WHICH IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR THE FIRST APPELLATE AUTHORITY, OR AN 15 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA EXPLANATION IS OFFERED WHICH IS NOT SU BSTANTIATED . IN SUCH A CASE, THE AMOUNT ADDED OR DISALLOWED IN COMPUTINGTHE TOTAL INCOME IS DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. AS PER THE PROVISION OF EXPLANATION 1, THE ONUS TO ESTABLISH THAT THE EXPLANATIO N OFFERED WAS BONA FIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME HAVE BEEN DISCLOSED BY HIM WILL BE ON THE PERSON CHARGED WITH CONCEALMENT. THE EXPLANATION OF THE ASSESSEE FOR THE PURPOSE OF AVOIDANCE OF PENALTY MUST BE AN ACCEPTABLE EXPLANATION; IT SHOULD NOT BE A FANTASTIC OR FANCIFUL ONE. AS INDICATED ABOVE, THE CONSEQUENCE FOLLOWS AS A MATTER OF LAW. THE BURDEN IS ON THE ASSESSEE. IF HE FAILS TO DISCHARGE THAT BURDEN, THE PRESUMPTION THAT HE HAD CONCEALED THE INCO ME OR FURNISHED INACCURATE PARTICULARS THEREOF IS AVAILABLE TO BE DRAWN. IN THE INSTANT CASE, IT IS FOUND THAT THE APPELLANT HAS FAILED TO OFFER ANY EXPLANATION WHATSOEVER. 3.14 PART A OF THE EXPLANATION TO SECTION 271(1)(C) PROVIDES THAT IFASSESSEE 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 FALSE, IT IS A CASE OF DEEMED CONCEALMENT. THIS EXPLANATION CAN THEREFORE, BE APPLIED ONLY WHERE THE ASSESSEE H AS EITHER NOT OFFERED ANY EXPLANATION OR WHERE HE HAS OFFERED AN EXPLANATION, BUT THE SAME IS FOUND TO BE FALSE BY THE AO. IN OTHER WORDS, WHERE THE ASSESSEE OFFERS SOME EXPLANATION, IT IS ONLY THE PROVING BY THE ASSESSEE OFFICER OF THE EXPLANATION TO BE F ALSE THAT PART A OF THE EXPLANATION MAY BE ATTRACTED. MERE NON ACCEPTANCE OF EXPLANATION OFFERED BY THE ASSESSEE CANNOT FORM A BASIS FOR THE SATISFACTION OF AO TO THE EFFECT THAT THE ASSESSEE HAS CONCEALED PARTICULAR OF HIS INCOME. THE AO MUST HAVE SOME DE FINITE EVIDENCE TO REFUTE THE ASSESSEE'S CLAIM OR EVIDENCE OR EXPLANATION. 16 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 3.15 THE ESSENCE OF PART B OF THE EXPLANATION IS THAT THE PERSON MUSTPROVIDE AN EXPLANATION WHICH IS BONA FIDE AND HE SHOULD SUBSTANTIATE THAT EXPLANATION BY SOME EVIDENCE WITH HIM. IF HE FAILS TO DO SO, HIS EXPLANATION MAY BE TREATED AS UNTENABLE. BUT WHEN THE ASSESSEE IS ABLE TO OFFER REASONABLE EXPLANATION BASED ON SOME EVIDENCE, THE AO CANNOT INVOKE PART B OF THE EXPLANATION UNLESS HE HAS GIVEN FINDING BASED ON SOME CONTRADICTORY EVIDENCE TO DISAPPROVE THAT EXPLANATION OFFERED BY THE ASSESSEE WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. AS SEEN EARLIER, THE APPELLANT'S CASE IS COVERED BY PART 'A' OF EXPL.1. 3.16 IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SC) IT HAS BEEN HELD THAT .. INACCURATE PARTICULARS' MEANS THAT THE DETAILS SUPPLIED IN THE RETUR N ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. 3.17 THUS, IT CAN BE SEEN THAT EVEN THE HON'BLE APEX COURT HAS HELD THAT WHEREVER THERE IS A DEFINITE FINDING BY THE A.O. THAT THE DETAILS FILED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT, ERRONEOUS OR FALSE, PENALTY U/S.271 ( 1)(C) IS LEVIABLE. 3.18 HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHERATON APPARELS 256 ITR 20 HAS HELD THAT EVEN IF THE APPELLANT - ASSESSEE DECLARES THE FULL VALUE OF THE ASSETS/TRANSACTIONS AS HIS INCOME IN THE RETURN FILED AFTER THE SEARCH, PENALTY CAN BE LEVIED IF IN THE ORIGINAL RETURN THE SAID INCOME WAS NOT OFFERED FOR TAXATION. IN THE P RESENT CASE, THE APPELLANT HAS NOT FURNISHED ANY EXPLANATION AND ALL THEFACTS MATERIAL TO THE COMPUTATIO N OF TOTAL INCOME WERE NOT DISCLOSED BY HER IN THE RETURN OF INCOME FILED. 17 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 3.19 EVEN A REVISED RETURN DOES NOT SPARE PENALTY, WHERE SUCH REVISEDRETURN HAS BEEN FILED AFTER CONCEALMENT HAS BEEN BROUGHT HOME. IN CIT V. DR. A. MOHD. ABDUL KHADIR (2003) 260 I TR 650 (MAD.), THE ASSESSEE HAD ADMITTED THAT 50 TO 70% OF HIS RECEIPT WERE NOT RECORDED, BUT HE CLAIMED THAT HE HAD ADMITTED THE SAME ONLY DURING SEARCH IN A SPFTIT OF CO - OPERATION IN ORDER TO AVOID PENALTY AND PROSECUTION. THE FIRST APPELLATE AUTHORITY D ELETED THE PENALTY ON THE GROUND THAT THE RETURN WAS VOLUNTARY BEFORE PROCEEDINGS WERE TAKEN ON THE RETURNS FILED, WHILE THE TRIBUNAL ENDORSED THE DECISION ON THE GROUND THAT IT WAS A MATTER OF BARGAIN BETWEEN THE ASSESSEE AND THE DEPARTMENT AND THAT PENAL TY IS EXONERATED ON REVISED RETURN FILED IN PURSUANCE OF SUCH BARGAIN. THE HIGH COURT HELD THAT THE REVISED RETURN COULD NOT BE TREATED AS PURELY VOLUNTARY ESPECIALLY, SINCE THE ASSESSEE HAD ADMITTED CONCEALMENT DURING SEARCH. 3.20 SAME VIEW HAS BEEN TAKE N IN THE CASE OF JYOTILAXMANKONKAR VS. CIT292 ITR 163 (BORN) WHERE IT HAS BEEN HELD THAT ADMITTING OF UNDISCLOSED INCOME IN INSTALLMENTS DO INDICATE THAT THE DISCLOSURE WAS NOT BONAFIDE. HON'BLE ITAT 'C' BENCH, MUMBAL IN THE CASE OF M/S. CAMAY WAFERS (INDI A) P. LTD. IN ITA NOS.5206 & 5205/MURN/2009 DT.09.09.2011 HAS HELD THAT OFFER OF ADDITIONAL INCOME IN TWO INSTALLMENTS UNDER SEC. 153A WAS NOT BONAFIDE BUT ONLY BECAUSE OF EVIDENCE GATHERED DURING SEARCH. 3.21 IN VIEW OF THE ABOVE FACTS AND IN THE ABSE NCE OF ANY EXPLANATION ASALSO THE FACT THAT THE APPELLANT ALSO FILED THE ADDITIONAL GROUND OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE A.Y. 2008 - 09 WHEREIN SHE HAS OFFERED FOR TAX INTEREST OF RS. 1,20,22,528/ - CALCULATED ON ACCRUAL BA SIS, IT AMOUNT TO ADMISSION ON THE PART OF THE APPELLANT ITSELF THAT SHE OFFERED THE INTERESTINCOME ON ACCRUAL BASIS TO END THE LITIGATION AND BUY PEACE, THE APPELLANT ON ADVICE OF TAX CONSULTANT. THIS ACT ON THE PART OF APPELLANT AND RIGHT 18 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA ADVISE GIVEN BY THE TAX EXPERT FURTHER CONFIRM THE FACT THAT THE APPELLANT ADMITTEDLY FURNISHEDINACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THE ABOVE FACTS ANDCIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE A.O. AND ACCORDINGLY, I AM OF T HE CONSIDERED OPINION THAT A.O. HAS RIGHTLY IMPOSED PENALTY U/S.271(1)(C) OF THE I.T. ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS. ACCORDINGLY, ALL THE GROUNDS OF APPEAL ARE DISMISSED. 3.22 IN THE RESULT, THE APPEAL IS DISMISSED. AFTER HAVING GONE TH ROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES , JUDGMENT CITED AND SUBMISSIONS MADE BY BOTH THE PARTIES, WE FIND THAT LD. CIT(A) WHILE DECIDING THE SAID GROUND HAS RIGHTLY APPRECIATED THAT THERE CANNOT B E A STRAI GHT JACKET FORMULA FOR DETECTION OF THESE DEFAULTS OF CONCEALMENT OR OF FURNISHING INACCURATE PARTICULARS OF INCOME AND INDEED CONCEALMENT OF PARTICULARS OF INCOME AND INACCURATE PARTICULARS OF INCOME MAY AT TIMES OVERLAP AND IT DEPENDS ON THE FAC TS OF THE EACH CASE. AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD STAYED IN INDIA FOR MORE THAN 182 DAYS DURING THE FY 2007 - 08 RELEVANT TO AY 2008 - 09. ACCORDING TO SECTION 5 OF THE I.T. ACT, 1961, ANY PERSON WHO IS RESIDENT IN INDIA HAS TO INCL UDE ALL THE INCOME FROM 19 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA WHATEVER WAYS DERIVED. THE ASSESSEE WAS A RESIDENT OF INDIA ACCORDING TO SECTION 6 OF THE ACT, THEREFORE THE ASSESSEE WAS UNDER AN OBLIGATION TO OFFER HER GLOBAL INCOME FOR TAXATION. THE ASSESSEE HAD ALSO GIVEN AN AFFIDAVIT THAT SHE HAD OFFERED HER GLOBAL INCOME FOR TAXATION. THE ASSESSING OFFICER DENIED THE CLAIM OF EXEMPTION U/S 10(4)(II) AND ADDED THE AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. AFTER INITIATION OF PENALTY PROCEEDINGS, THE ASSESSEE TOOK A SPECIFIC STAND THAT SHE HA D BONAFIDE BELIEF THAT SHE BEING THE NRI IS NOT LIABLE TO OFFER INCOME OF INTEREST FROM FDS TO TAX, THEREFORE, THE AMOUNT OF INTEREST FROM THE FDS WAS NOT OFFERED. THE PLEA OF BONAFIDE BELIEF RAISED BY THE ASSESSEE WAS REJECTED BY THE REVENUE AUTHORITI ES ON THE GROUND THAT THE ASSESSEE IS BEING DEALT WITH BY THE PROFESSIONALS WHO WERE WELL ACQUAINTED WITH THE LEGAL FACTS, SO THE ASSESSEES PLEA OF BONAFIDE CLAIM WAS RIGHTLY REJECTED. EVEN OTHERWISE LD. CIT(A) HAS DEALT IN DETAIL THE WORD CONCEALMENT OF PARTICULARS INCOME IN PARA NO. 3.10 AND THE SAME IS REPRODUCED BELOW: - 3.10 THE WORD 'CONCEAL' IS DERIVED FROM THE LATIN 'CONCEKIRE' WHICHIMPLIES CON+CELARE I.E. TO HIDE. IN WEBSTER'S NEW INTERNATIONAL DICTIONARY IT IS EQUATED 20 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA WITH THE MEANING 'TO HIDE OR WITHDRAW FROM OBSERVATION, TO COVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF; TO WITHHOLD KNOWLEDGE OF'. THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME - TAX AUTHO RITIES. THERE IS STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING THE RETURN. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LI ABILITY. IT IS OBVIOUS THAT THE PENAL PROVISIONS WOULD OPERATE WHEN THERE IS CONCEALMENT OF PARTICULARS OF INCOME OR A FAILURE OF DUTY TO DISCLOSE FULLY AND TRULY PARTICULARS OF INCOME, IMPOSED UNDER THE ACT AND THE RULES THERE UNDER. THE DUTY IS ENJOINED UPON A PERSON TO MAKE A CORRECT AND COMPLETE DISCLOSURE OF HIS INCOME AND IT IS ONLY WHEN HE FAILS IN HIS DUTY BY NOT DISCLOSING HIS INCOME OR PART THEREOF, HE CONCEALS THE PARTICULARS OF HIS INCOME. THE DUTY IS ENJOINED UPON HIM TO MAKE A COMPLETE DISCLOS URE OF HIS INCOME AS WELL AS A CORRECT DISCLOSURE. THEREFORE, IF THE DISCLOSURE MADE - OF THE PARTICULARS OF INCOME IS INCORRECT, THEN ALSO HE COMMITS BREACH OF HIS DUTY. SUCH DEFAULTS ENTAIL THE PENAL CONSEQUENCES CONTEMPLATED BY SECTION 271(1)(C)(III). WHERE SPECIFIC AND DEFINITE PA RTICULARS OF INCOME ARE DETECTED AS INACCURATE, THEN SUCH FIGURE WILL ALSO MAKE THE TOTAL INCOME INACCURATE IN PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. THE ONLY PLEA WHICH HAS BEEN RAISED BY THE ASSESSEE BEF ORE THE REV ENUE AUTHORITIES IS THAT SHE BEING THE RESIDENT OF AUSTRALIA 21 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA HAD ONLY VISITED IN INDIA FOR SOME TIME BUT HAD ALL THE INTENTIONS TO RETURN TO AUSTRALIA. THE ASSESSEE HAS ALSO SUBMITTED THAT SHE HAD APPLIED TO THE DEPARTMENT FOR PERMISSION TO RESI DE IN INDIA FOR A LONGER PERIOD, THEREFORE SHE WAS UNDER BONAFIDE BELIEF THAT SHE IS ENTITLED FOR EXEMPTION U/S 10(4)(II) OF THE I.T. ACT. HOWEVER, IN ORD ER TO END LITIGATION, THE TAX WAS OFFERED ON INTEREST INCOME FROM FDS, CALCULATED ON ACCRUAL BASIS. T HIS PLEA OF THE ASSESSEE WAS RIGHTLY REJECTED BY THE REVENUE IN VIEW OF PART - A OF THE EXPLANATION OF SECTION 271(1)(C) OF THE I.T. ACT WHICH PROVIDES THAT IF ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFER AN EXPLANATION WHICH IS FOUND BY THE AO OR THE COM MISSIONER(APPEAL) OR THE COMMISSIONER TO BE FALSE, THEN IT IS A CASE OF DEEM CONCEALMENT . LD. CIT(A) HAS ALSO RELIED UPON THE JUDGMENT IN THE CASE OF JYOTI LAXMAN KONKAR VRS. CIT 292 ITR 163 BOM. WHEREIN IT HAS BEEN HELD THAT ADMITTING OF UNDISCLOSED IN COME IN INSTALLMENTS DO INDICATE THAT THE DISCLOSURE WAS NOT BONAFIDE. HONBLE ITAT C BENCH, MUMBAI IN THE CASE OF M/S CAMAY WAFERS (INDIA) PVT. LTD. IN ITA NO. 5206 & 5205/MUM/2009 22 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA DATED 09.09.11 HAS HELD THAT OFFER OF ADDITIONAL INCOME IN TWO INSTALLME NTS UNDER SECTION 153A WAS NOT BONAFIDE BUT ONLY BECAUSE OF EVIDENCE GATHERED DURING SEARCH. MORE PARTICULARLY, THE ASSESSEE IN THE PRESENT CASE HAD OFFERED TO TAX INTEREST OF RS. 1,20,22,528/ - , CALCULATED ON ACCRUAL BASIS AND THIS ACT OF THE ASSESSEE IT SELF AMOUNTS TO ADMISSION ON HER PART. AS PER THE ARGUMENTS OF THE ASSESSEE, SHE OFFERED THE INTEREST INCOME ON ACCRUAL BASIS TO END THE LITIGATION, ALSO FURTHER CONFIRM THE FACT THAT THE ASSESSEE ADMITTEDLY FURNISHED THE INACCURATE PARTICULARS OF INCOME. THIS PLEA RAISED BY THE ASSESSEE IS NOT ACCEPTABLE IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. VRS. CIT - II (CIVIL APPEAL NO. 9772 OF 2013) WHEREIN IT WAS HELD AS UNDER: - 7. THE AO, IN OUR VIEW, SHALL NOT BE CARR IED AWAY BY THE PLEA OF THE ASSESSEE LIKE VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT, ETC. TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF I NCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. EXPLANATION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE AO, BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE 23 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 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. 8. ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM OF RS.40,74,000/ - WITH A VIEW TO AVOID LITIGATION, B UY PEACE AND TO CHANNELIZE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOME TAX DEPARTMENT. STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER THE EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT. IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES 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 CONC EALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER C ONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 1 33A CONDUCTED ON 16.12.2003, 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 INC OME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD 24 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA 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. THE AO, IN OUR VIEW, HAS RECORDED A CA TEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. THE SCOPE OF SECTION 271(1)(C) HAS ALSO BEEN ELABORATELY DISCUSSED BY THIS COURT IN UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2008) 13 SCC 369 AND CIT VS. ATUL MOHAN BINDAL (2009 ) 9 SCC 589. 11. THE PRINCIPLE LAID DOWN BY THIS COURT, IN OUR VIEW, HAS BEEN CORRECTLY FOLLOWED BY THE REVENUE AND WE FIND NO ILLEGALITY IN THE DEPARTMENT INITIATING PENALTY PROCEEDINGS IN THE INSTANT CASE. WE, THEREFORE, FULLY AGREE WITH THE VIEW OF THE HIGH COURT. HENCE, THE APPEAL LACKS MERIT AND IS DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS. AFTER HAVING GONE THROUGH THE FACTS, CIRCUMSTANCES AND LEGAL PROPOSITION AS DISCUSSED ABOVE, WE FIND THAT THE REVENUE AUTHORITIES HAVE RIGHTLY IMPOSED PENALTY UPON THE ASSESSEE U/S 271(1)(C) R.W.S 274 OF THE I.T. ACT. N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT (A) . 25 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT (A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND S RAISED BY THE ASSESSEE STANDS DI SMISSED . GROUND NO.5 . 7 . THIS GROUND IS GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 8 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEB, 2018. SD/ - SD/ - ( RAJENDRA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 21 . 02 .201 8 SR.PS . DHANANJAY 26 I.T.A. NO. 4909 /MUM/201 5 SUNITA SHREEGOPAL BARASIA / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI