Babu.C.George, Cochin V. Assistant Director of Income tax,

ITA 499/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0991 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 28-01-2013
• Assessment Year: misc
• Appeal Filed On: 17-06-2011
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: PREETHA S NAIR
• Keywords: Business income; Search and seizure; Initiation of penalty proceedings; Reasonable cause
• Section: 142(1); 153A; 148; 132; 144; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 498-500/COCH/2011 ASSESSMENT YEAR : 2001-02-2003-04 SHRI BABU C.GEORGE, CHANDRATHIL HOUSE, BCG BUNGALOW ANNEX, VILLA A H NO. 33/2030-D, AMBEDKAR ROAD, VENNALA, ERNAKULAM, KOCHI-682 028. [PAN: AGZPG 7680D] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, INTERNATIONAL TAXATION-1, KOCHI. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SMT. PREETHA S. NAIR, ADV. REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR DATE OF HEARING 28/01/2013 DATE OF PRONOUNCEMENT 28/02/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE APPEALS, FILED BY THE ASSESSEE, ARE DIRECTED AGAINST THE COMMON ORDER DATED 31.3.2011 PASSED BY LD CIT(A)-III, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 2001-02 TO 2003-04. THE PENALTY LEVIED U/S 2 71(1)(C) OF THE ACT BY THE ASSESSING OFFICER IN THESE THREE YEARS, HAVING BEEN CONFIRMED BY LD CIT(A), THE ASSESSEE HAS FILED THESE APPEALS BEFORE US. 2. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE ACT IN THE HANDS OF THE ASSESSEE ON 06-08- 2003. CONSEQUENT THERETO, NOTICE U/S 153A OF THE A CT WAS ISSUED TO THE ASSESSEE FOR THE YEARS UNDER CONSIDERATION. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAD NOT FILED THE RETURNS OF INCOME FOR THE YEAR UNDER CONSIDERAT ION PRIOR TO THE DATE OF SEARCH, I.E., I.T.A. NO.498-500/COCH/2011 2 THE ASSESSEE HAS FILED THE RETURNS OF INCOME FOR TH E FIRST TIME AFTER THE RECEIPT OF NOTICES U/S 153A OF THE ACT FOR THE YEARS UNDER CONSIDERATI ON. IN ALL THE THREE YEARS, THE AO NOTICED THAT THE WIFE OF THE ASSESSEE HAD RECEIVED RENTAL INCOME ON A PROPERTY BELONGING TO THE ASSESSEE AND FURTHER SHE HAD DECLA RED THE SAME IN HER RETURN OF INCOME. THE AO TOOK THE VIEW THAT THE ASSESSEE SHOU LD HAVE OFFERED THE SAID RENTAL 0INCOME IN HIS HANDS AS PER THE PROVISIONS OF SEC. 64(1)(IV) OF THE ACT. ACCORDINGLY, HE ASSESSED THE SAID RENTAL INCOME IN THE HANDS OF THE ASSESSEE. SINCE THE ASSESSEE HAD FILED THE RETURNS OF INCOME FOR THE YEARS UNDER CON SIDERATION FOR THE FIRST TIME AFTER THE DATE OF SEARCH, THE AO TREATED THE ENTIRE AMOUNT OF INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS AND ALSO THE RENTAL INCOME ASSESSED IN THE HANDS OF THE ASSESSEE U/S 64(1)(IV) OF THE ACT AS CONCEALED INCOME IN ALL THE THREE YEARS UNDER CONSIDERATION. IN ASSESSMENT YEAR 2001 -02, THE AO NOTICED THAT THE PURCHASE CONSIDERATION OF A LAND PURCHASED BY THE A SSESSEE WAS SHOWN AT A LESSER FIGURE IN THE CONVEYANCE DEED THAN THAT WAS SHOWN I N THE SALE AGREEMENT. THE DIFFERENCE BETWEEN THE AMOUNT SHOWN IN THE SALE AGR EEMENT AND THE SALE DEED WAS ASSESSED IN THE HANDS OF THE ASSESSEE AS INCOME UND ER THE HEAD INCOME FROM OTHER SOURCES AND THE SAID INCOME WAS ALSO CONSIDERED AS CONCEALED INCOME. IN ALL THE THREE YEARS, THE ASSESSING OFFICER ALSO TOOK SUPPOR T OF THE PROVISIONS OF EXPLANATION 3 TO SEC. 271 FOR LEVYING PENALTY U/S 271(1)(C) OF THE A CT. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY @ 200% OF THE TAX SOUGHT TO BE EVADE D. THE ORDERS PASSED BY THE AO WERE ALSO CONFIRMED BY THE LD CIT(A). DURING THE C OURSE OF APPELLATE PROCEEDINGS BEFORE LD CIT(A), THE ASSESSEE CHALLENGED THE ACTIO N OF THE AO IN LEVYING PENALTY @ 200% OF THE TAX SOUGHT TO BE EVADED. HOWEVER, THE FIRST APPELLATE AUTHORITY REJECTED THE SAME ON THE REASONING THAT THE ASSESSEE DID NOT RAISE ANY GROUND FOR REDUCING THE QUANTUM OF PENALTY FROM 200%. AGGRIEVED BY THE ORD ERS PASSED BY LD CIT(A), THE ASSESSEE HAS FILED THESE APPEALS BEFORE US. 3. THE LD COUNSEL FOR THE ASSESSEE HAS URGED CE RTAIN LEGAL ISSUES BEFORE US. FIRST, IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS FAILED TO RECORD SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER AND HEN CE THE IMPUGNED PENALTY ORDERS I.T.A. NO.498-500/COCH/2011 3 ARE LIABLE TO BE QUASHED. IN THIS REGARD, THE LD C OUNSEL RELIED UPON FOLLOWING CASE LAW:- A. CIT VS. RAM COMMERCIAL ENTERPRISES LTD (246 IT R 568) (DELHI) B. CIT VS. RAJAN & CO. (291 ITR 340) (DELHI) IT WAS FURTHER CONTENDED THAT THE RETURNS OF INCOME FILED U/S 153A OF THE ACT IS CONSIDERED AS RETURNS OF INCOME FILED U/S 139 OF TH E ACT AND SINCE THE ASSESSING OFFICER HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE, T HE QUESTION OF CONCEALMENT OF INCOME DOES NOT ARISE. THE LD COUNSEL FOR THE ASSE SSEE TOOK A PLEA THAT THE PROVISIONS OF EXPLANATION 3 TO SEC. 27, WHICH PROVIDE FOR DEEME D CONCEALMENT, SHALL NOT APPLY TO THE PROCEEDINGS INITIATED U/S 153A OF THE ACT AS TH E SAID SECTION OVERRIDES OTHER PROVISIONS VIZ., SEC. 139, SECTION 147, SECTION 148 , SECTION 149, SECTION 151 AND SECTION 153. 4. ON THE OTHER HAND, THE LD D.R SUBMITTED THE ASSESSING OFFICER HAS RECORDED A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE RELEVANT ASSESSMENT ORDERS. HENCE, AS PER THE PROVISIONS OF SUB SEC. (1B) OF SEC. 271, THE SAME SHALL CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. SHE FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FIL E RETURNS OF INCOME FOR THE YEARS UNDER CONSIDERATION AND HE FILED THE RETURNS OF INC OME ONLY DUE TO SEARCH OPERATIONS. HENCE, THE RETURNS FILED BY THE ASSESSEE U/S 153A O F THE ACT CANNOT BE CONSIDERED AS THE RETURNS WHICH ARE REQUIRED TO BE FILED ORIGINAL LY U/S 139 OF THE ACT. ACCORDINGLY, THE LD D.R SUBMITTED THAT THE PROVISIONS OF EXPLANATION 3 TO SEC. 271 SHALL APPLY TO THE FACTS OF THE INSTANT CASES. 5. WE HAVE HEARD THE PARTIES ON THE LEGAL ISSUE S. THE FIRST ISSUE URGED BY THE ASSESSEE RELATES TO THE RECORDING OF SATISFACTION. FROM THE ASSESSMENT ORDERS OF THE YEARS UNDER CONSIDERATION, WE NOTICE THAT THE AO HA S RECORDED A DIRECTION IN THE ORDER TO THE EFFECT THAT THE PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT IS SEPARATELY INITIATED. HENCE, IN OUR VIEW, THE PROVISIONS OF SUB-SEC. (1B) TO SEC. 271 SHALL APPLY TO THE INSTANT CASES AND THE DIRECTION MENTIONED IN TH E ASSESSMENT ORDER SHALL CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER. I.T.A. NO.498-500/COCH/2011 4 6. THE NEXT ISSUE RELATES TO THE APPLICABILITY O F EXPLANATION 3 TO SEC. 271 TO THE FACTS OF THE INSTANT CASES. AS STATED EARLIER, THE AO HA S INVOKED THE PROVISIONS OF EXPLANATION 3 TO SEC. 271 FOR LEVYING PENALTIES U/S 271(1)(C) O F THE ACT FOR THE YEARS UNDER CONSIDERATION. FOR THE SAKE OF CONVENIENCE, WE EXT RACT BELOW THE PROVISIONS OF EXPLANATION 3 REFERRED SUPRA. EXPLANATION 3:- WHERE ANY PERSON ( * ) FAILS, WI THOUT REASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1) OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS REQUIRED TO FURNISH UNDER SE CTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AN D THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSON SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO HAVE CONCEALE D THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHS TANDING THAT SUCH PERSON FURNISHED A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SECTION 14 8. ( * ) WORDS WHO HAS NOT PREVIOUSLY BEEN ASSESSED UNDER THIS ACT OMITTED BY FINANCE ACT, 2002, W.E.F. 1-4-2003. FOR INVOKING THE PROVISIONS OF EXPLANATION 3, THE TI ME LIMIT SPECIFIED IN SUB-SECTION (1) OF SECTION 153 IS REQUIRED TO BE REFERRED TO. ACCO RDING TO THE PROVISIONS OF SEC. 153(1), NO ORDER OF ASSESSMENT SHALL BE MADE U/S 143 OR SEC . 144 AT ANY TIME AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. THE SAID PROVISIONS CONTAIN CERTAIN PROVISOS PRESCRIBING DIFFERENT TIME LIMITS FOR CERTAIN ASSESSMENT YEARS. HOWEVER, FOR THE YEARS UNDER CONSIDERATION, THE TIME LIMIT SPECIFIED U/S 153(1) IS TWO YEARS FR OM THE END OF THE RELEVANT ASSESSMENT YEAR. 7. WE HAVE TABULATED BELOW THE DETAILS OF FILIN G RETURNS OF INCOME AND TIME LIMIT VIS- A-VIS SEC. 153(1) OF THE ACT, FOR THE SAKE OF CONVE NIENCE:- ASSESSMENT YEAR TIME LIMIT AS PER SECTION 153(1) DATE OF FILING OF RETURN OF INCOME 2001 2002 31.03.2004 25-08-2005 I.T.A. NO.498-500/COCH/2011 5 2002 2003 31.03.2005 07.11.2005 2003 2004 31.03.2006 07.11.2005 IT CAN BE NOTICED THAT THE RETURNS OF INCOME RELATI NG TO THE ASSESSMENT YEARS 2001-02 AND 2002-03 HAS BEEN FILED BEYOND THE TIME LIMIT PR ESCRIBED U/S 153(1) OF THE ACT. HOWEVER, THE RETURN OF INCOME RELATING TO THE ASSES SMENT YEAR 2003-04 HAS BEEN FILED WITHIN THE TIME LIMIT SPECIFIED IN SEC. 153(1) OF T HE ACT. 8. HOWEVER, ON A CAREFUL PERUSAL OF THE PROVISI ONS OF SEC. 153A, WE ARE OF THE VIEW THAT THE PROVISIONS OF SEC. 139, SEC. 147, SEC. 148 , SEC. 149, SEC. 151 AND SEC. 153 HAVE BEEN OVERRIDDEN ONLY FOR THE LIMITED PURPOSE O F OVERCOMING THE TIME LIMIT, PROCEDURES, ASSESSMENTS ETC. PRESCRIBED IN THOSE SE CTIONS IN CASE OF A SEARCHED PERSON. FURTHER THE RETURN FILED U/S 153A OF THE ACT IS TREATED AS A RETURN REQUIRED TO BE FURNISHED U/S 139 OF THE ACT IN ORDER TO MAKE THE P ROVISIONS OF THE ACT, SO FAR AS MAY BE, APPLICABLE. HENCE, IN OUR VIEW, THE RETURNS F ILED U/S 153A OF THE ACT CANNOT BE TREATED AS SUBSTITUTES TO THE ORIGINAL RETURNS REQU IRED TO BE FURNISHED U/S 139 OF THE ACT. THIS DISCUSSION ADDRESSES THE OTHER LEGAL ISSUE RAI SED BY THE ASSESSEE, VIZ., THE RETURNS FILED U/S 153A ARE TO BE CONSIDERED AS THE ORIGINAL RETURNS FILED U/S 139 OF THE ACT FOR THE PURPOSE OF PENALTY PROCEEDINGS 9. WE NOTICE THAT THE EXPLANATION 3 TO SEC. 271 OF THE ACT IS A DEEMING PROVISION AND A REFERENCE TO SEC. 153(1) OF THE ACT IS MADE ONLY FOR DETERMINING THE TIME LIMIT WITHIN WHICH THE RETURN OF INCOME SHOULD HAVE BEEN FILED VOLUNTARILY BEFORE ISSUING ANY NOTICE U/S 142(1) OR SEC. 148 OF THE ACT. HENCE, I N OUR VIEW, IT MAY NOT BE CORRECT TO SAY THAT THE RETURNS OF INCOME FILED U/S 153A OF TH E ACT SHALL NOT BE HIT BY THE PROVISIONS OF EXPLANATION 3 TO SEC. 271. IN OUR VIE W, THE SAID PROVISIONS SHALL APPLY IF THERE IS A FAILURE, WITHOUT REASONABLE CAUSE, TO FU RNISH THE RETURN OF INCOME WITHIN THE PERIOD SPECIFIED IN SEC. 153(1) OF THE ACT, WHICH A PERSON IS REQUIRED TO FURNISH U/S 139 OF THE ACT, PROVIDED NO NOTICE U/S 142(1)(I) OR SEC . 148 HAS BEEN ISSUED UNTIL THE EXPIRY OF THE PERIOD MENTIONED ABOVE. I.T.A. NO.498-500/COCH/2011 6 10. IN THE INSTANT CASE, ADMITTEDLY, THE ASSESS EE DID NOT FILE HIS RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 BEFORE THE EXPIRY OF TIME LIMIT SPECIFIED IN SEC. 153(1) OF THE ACT. THE ASSESSEE HAS ALSO FAIL ED TO SHOW ANY REASONABLE CAUSE FOR THE SAID FAILURE. THE ASSESSEE HAS ALSO NOT BEEN I SSUED ANY NOTICE EITHER U/S 142(1)(I) OR SEC. 148 OF THE ACT BEFORE THE EXPIRY OF THE TIM E LIMIT SPECIFIED IN SEC. 153(1) OF THE ACT. IT WAS ALSO NOT SHOWN TO US THAT THE ASSESSEE WAS PREVIOUSLY ASSESSED TO TAX UNDER THE ACT. THE ASSESSEE HAD TAXABLE INCOME IN THESE TWO YEARS. THUS, IT IS SEEN THAT THE VARIOUS CONDITIONS PRESCRIBED IN EXPLANATIO N 3 TO SEC. 271 OF THE ACT ARE SQUARELY APPLICABLE TO THE ABOVE SAID TWO YEARS. A CCORDINGLY, IN OUR VIEW, THE TAX AUTHORITIES ARE JUSTIFIED IN INVOKING EXPLANATION 3 TO SEC. 271 FOR THE ABOVE SAID TWO YEARS. 11. ON MERITS OF THE ISSUE, THE LD COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS, SUO MOTU, DECLARED ADDITIONAL INCOME AND THEY WERE NOT PURSUANT TO ANY MATERIALS SEIZED BY THE DEPARTMENT. IT WAS FURTHER SUBMITTED THAT THE LD CIT(A) HAS ERRED IN NOT ENTERTAINING THE PLEA OF THE ASSESSEE FOR REDUCTION OF THE PENALTY AMOUNT FROM THE LEVEL OF 200%. THE LD A.R PLACED RELIANCE ON THE FOLLOWING CASE LAW IN SUPPORT OF HIS ARGUMENTS AGAINST LEVYING PENALTY. A. CIT VS. SURESH CHANDRA MITTAL (251 ITR 9) (SC) B. CIT VS. RAJIV GARG & OTHERS (313 ITR 256) (P&H ) C. CIT VS. RELIANCE PETRO PRODUCTS (322 ITR 158) (SC) ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ENTI RE ASSESSED INCOME SHALL CONSTITUTE CONCEALED INCOME, AS THE ASSESSEE HAD FAILED TO F URNISH THE RETURN OF INCOME FOR ALL THE THREE YEARS U/S 139 OF THE ACT. 12. IN SUBSEQUENT PARAGRAPHS, WE HAVE HELD THAT THE EXPLANATION E TO SEC, 271 SHALL NOT BE APPLICABLE TO ASSESSMENT YEAR 2003-04. ACC ORDINGLY, IN THAT YEAR, WE HAVE ADJUDICATED THE ISSUE OF VALIDITY OF PENALTY ON MER ITS. THE FACTS PREVAILING IN ASSESSMENT YEARS 2001-02 AND 2002-03, BEING IDENTIC AL TO THAT PREVAILING IN ASSESSMENT YEAR 2003-04, THE DISCUSSIONS MADE ON MERITS OF PEN ALTY WOULD BE APPLICABLE TO THESE TWO YEARS ALSO. IN ASSESSMENT YEAR 2001-02, A FURT HER ADDITION IS MADE TOWARDS I.T.A. NO.498-500/COCH/2011 7 CONCEALMENT OF ACTUAL PURCHASE CONSIDERATION. THE LD A.R DID NOT ADVANCE ANY ARGUMENT IN RESPECT OF THAT ADDITION AND ACCORDINGL Y, WE UPHOLD THE PENALTY LEVIED ON THAT ADDITION. 13. IT IS SEEN THAT THE ASSESSEE HAS FILED THE R ETURN OF INCOME RELATING TO THE ASSESSMENT YEAR 2003-04 WITHIN THE PERIOD SPECIFIED IN SEC. 153(1) OF THE ACT, I.E. BEFORE 31.3.2006. FURTHER THE ASSESSING OFFICER HA S ALSO ISSUED A NOTICE U/S 142(1) OF THE ACT ON 10-06-2005 AND THE SAME WAS SERVED UPON THE ASSESSEE ON 15.06.2005. ACCORDINGLY THE EXPLANATION 3 TO SEC. 271 OF THE ACT SHALL NOT APPLY TO ASSESSMENT YEAR 2003-04 AND HENCE THE ASSESSING OFFICER WAS WRONG I N INVOKING THE SAME IN THIS YEAR. 14. ON MERITS, THE AO HAS CONSIDERED THE ENTIRE AMOUNT OF INCOME ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS AS CONCEALED INCOME AS THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO FILE RETURN OF INCOME WITHIN THE TIME PERMITTED U/S 139 OF THE ACT. WE ALSO NOTICE THAT T HE ASSESSEE HAS FILED THE RETURN OF INCOME ONLY AFTER THE SEARCH OPERATIONS IN PURSUANC E OF NOTICE ISSUED U/S 153A OF THE ACT. BEFORE US, THE LD A.R SUBMITTED THAT THE RENT AL INCOME HAS BEEN DECLARED BY THE SPOUSE OF THE ASSESSEE. HOWEVER, WE NOTICE FROM THE WRITTEN SUBMISSIONS GIVEN BY LD D.R THAT THE SPOUSE OF THE ASSESSEE HAS DECLARED TH E RENTAL INCOME IN THE RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 153C OF THE ACT. THUS, THERE IS FAILURE ON THE PART OF THE ASSESSEE, AS IN THE CASE OF BUSINESS INCOME, TO DECLARE THE RENTAL INCOME PRIOR TO THE DATE OF SEARCH. 15. IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE EXPRESSIONS HAS CONCEALED THE PARTICULARS OF INCOME AND HAS FURNISHED INACC URATE PARTICULARS OF INCOME HAVE NOT BEEN DEFINED IN THE ACT. ACCORDINGLY IT WAS CONTEN DED THAT CONCEALMENT SHOULD BE CONSIDERED AS A DIRECT ATTEMPT TO HIDE AN ITEM OF I NCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME TAX AUTHORITIES. IN EFFECT , THE CONTENTION OF THE LD A.R APPEARS TO BE THAT THE DEPARTMENT SHOULD ESTABLISH MENS REA BEFORE COMING TO THE CONCLUSION ON CONCEALMENT OF INCOME. THIS ISSUE HA S SINCE BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PRO CESSORS (306 ITR 277)(SC), I.T.A. NO.498-500/COCH/2011 8 WHEREIN THE HONBLE APEX COURT HAS HELD THAT THE W ILFUL CONCEALMENT IS NOT REQUIRED TO BE PROVED IN ORDER TO LEVY CIVIL LIABILITY OF PE NALTY. THE LD A.R ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F SURESH CHANDRA MITTAL (SUPRA). HOWEVER, WE NOTICE THAT THE ASSESSEE THEREIN HAD AD MITTED ADDITIONAL INCOME IN ORDER TO PURCHASE PEACE AND AVOID LITIGATION BY WAY OF VO LUNTARY SURRENDER. THE FACTS PREVAILING IN THE CASE OF RAJIV GARG (SUPRA) ARE AL SO IDENTICAL WITH THE FACTS AVAILABLE IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA). HOWEVER , IN THE INSTANCE CASE, IT WAS NOT SHOWN THAT THE INCOME DECLARED IN THE RETURNS OF IN COME WAS A VOLUNTARY SURRENDER IN ORDER TO PURCHASE PEACE AND AVOID LITIGATION. ON T HE CONTRARY, THE INCOME OFFERED IN THE RETURN OF INCOME IS OTHERWISE ASSESSABLE IN THE NORMAL COURSE. HENCE, IN OUR VIEW THE RATIO OF THE DECISION IN THE CASE OF SURESH CHA NDRA MITTAL (SUPRA) IS NOT APPLICABLE TO THE INSTANT CASE. SIMILARLY, IN OUR VIEW, THE DECI SION RENDERED BY THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (SUPRA ) IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. 16. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES WERE RIGHT IN LAW IN HOLDING THAT THE INCOME DECLAR ED BY THE ASSESSEE IS EXIGIBLE TO PENALTY U/S 271(1)(C) OF THE ACT. 17. WE HAVE ALREADY NOTICED THAT THE ASSESSING O FFICER HAS LEVIED PENALTY @ 200% OF THE TAX SOUGHT TO BE EVADED. BEFORE THE LD CIT(A), THE ASSESSEE, INTER ALIA, PLEADED FOR REDUCTION OF THE PENALTY AMOUNT AND THE SAME WAS RE JECTED BY THE FIRST APPELLATE AUTHORITY ON THE TECHNICAL REASONS THAT THE ASSESSE E DID NOT RAISE ANY SPECIFIC GROUND IN THAT REGARD. BEFORE US, THE LD A.R SUBMITTED THAT THE QUANTUM OF PENALTY LEVIED @ 200% IS VERY MUCH ON THE HIGHER SIDE, PARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSEE HAD OFFERED BUSINESS INCOME VOLUNTARILY. WE FIND F ORCE IN THE SAID CONTENTIONS. THE FACT REMAINS THAT THE ASSESSEE DID RAISE A PLEA FOR REDUCTION OF THE QUANTUM OF PENALTY BEFORE THE LD CIT(A). FURTHER IT IS NOTICED THAT T HE BUSINESS INCOME WAS OFFERED BY THE ASSESSEE SUO MOTU. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, IT WOULD BE JUSTIFIABLE IF THE QUANTUM OF PENALTY IS RESTRICTED TO 100% OF THE TAX SOUGHT TO BE EVADED. I.T.A. NO.498-500/COCH/2011 9 ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE QUANTUM OF PENALTY TO 100% OF THE TAX SOUGHT TO BE EVADED. 18. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED ACCORDINGLY ON 28-02-2013 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH FEBRUARY, 2012 GJ COPY TO: 1. SHRI BABU C.GEORGE, CHANDRATHIL HOUSE, BCG BUNGA LOW ANNEX, VILLA A H NO. 33/2030-D, AMBEDKAR ROAD, VENNALA, ERNAKULAM, KOCHI- 682 028. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, INTERN ATIONAL TAXATION-1, KOCHI. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, KO CHI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T. COCHIN