R. Kondal Rao., Hyderabad V. ACIT,Central Circle - 1, Hyderabad

ITA 528/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91739 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: S RAMA RAO
• Keywords: Income from undisclosed sources; Search and seizure; Charitable institution
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NOS. 526, 527, 528, 529 & 530/HYD/2014 ASSESSMENT YEAR: 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 R. KONDAL RAO, HYDERABAD. PAN AABCC4795L VS. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -1, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI RAMAKRISHNA BANDI DATE OF HEARING 02-06-2015 DATE OF PRONOUNCEMENT 19-06-2015 O R D E R PER SAKTIJIT DEY, J.M.: THESE APPEALS BY ASSESSEE ARE DIRECTED AGAINST A COMMON ORDER DATED 09/12/2013 OF LD. CIT(A)-I, HYDERABAD C ONFIRMING PENALTY IMPOSED U/S 271(1)(C) FOR THE AYS 2005-06 TO 2009-1 0. AS FACTS AND ISSUES INVOLVED IN THE AFORESAID APPEALS ARE COMMON AND IDENTICAL, THE SAME WERE CLUBBED AND HEARD TOGETHER, THEREFORE , THE SAME ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR T HE SAKE OF CONVENIENCE. 2. AS FACTS ARE COMMON IN ALL THESE APPEALS, FOR TH E SAKE OF BREVITY WE WILL REFER TO THE FACTS AS INVOLVED IN A Y 2005-06 BEING ITA NO. 526/HYD/2014. ASSESSEE AN INDIVIDUAL, AT THE RE LEVANT POINT OF TIME, WAS WORKING AS MANAGER IN JB EDUCATION SOCIET Y. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN CASE OF JB 2 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO GROUP OF INSTITUTIONS AS WELL AS THEIR TRUSTEES ON 10/09/2009. SIMULTANEOUSLY, A SEARCH AND SEIZURE OPERATION WAS ALSO CONDUCTED IN CASE OF ASSESSEE. IN PURSUANCE TO SEARCH AND SEI ZURE OPERATION, NOTICES U/S 153A OF THE ACT WERE ISSUED TO ASSESSEE CALLING UPON HIM TO FURNISH HIS RETURN OF INCOME FOR AYS 2005-06 TO 2009-10. IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED HIS RET URN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 20/12/2010 DECLARIN G TOTAL INCOME OF RS. 1,14,840 WHICH WAS ALSO THE INCOME DECLARED IN THE ORIGINAL RETURN FILED ON 02/01/2006. DURING THE ASSESSMENT P ROCEEDING, AO ON THE BASIS OF INFORMATION AVAILABLE WITH HIM FOUND T HAT ASSESSEE HAS MOVED AN APPLICATION BEFORE SETTLEMENT COMMISSION W HEREIN IT HAS BEEN STATED THAT WHILE WORKING AS MANAGER WITH JB G ROUP OF INSTITUTIONS, HE ACTED AS CONSULTANT IN GETTING STU DENTS FOR BEING ADMITTED AND IN THE PROCESS HE HAS COLLECTED EXCESS FEE OVER THE PRESCRIBED AMOUNT WITHOUT THE KNOWLEDGE OF MANAGEME NT. THEREFORE, HE OFFERED TO DISCLOSE THE EXCESS FEES COLLECTED BY HIM AS HIS INCOME AND PAID TAXES THEREON. IN ACCORDANCE WITH THE OFFE R MADE BY ASSESSEE IN THE APPLICATION FILED BEFORE THE SETTLE MENT COMMISSION, ASSESSEE NOT ONLY COMPUTED UNDISCLOSED INCOME OF RS . 8,18,63,700 FOR AYS 2005-06 TO 2009-10 BUT ALSO PAID TAXES THER EON AMOUNTING TO RS. 4,39,59,547. THE DETAILS OF INCOME OFFERED AND TAXES PAID AS MENTIONED IN THE APPLICATION FILED BEFORE THE SETTL EMENT COMMISSION FOR DIFFERENT ASSESSMENT YEARS ARE AS UNDER: A.Y. INCOME RETURNED INCOME OFFERED BEFORE THE ITSC REVISED TOTAL INCOME 2004-05 1,16,276 0 0 2005-06 1,14,840 44,36,000 45,50,840 2006-07 1,16,890 2,87,60,000 2,88,76,890 2007-08 98,700 93,00,000 93,98,700 2008-09 2,07,500 2,59,32,500 2,61,40,000 2009-10 3,02,250 1,34,35,200 1,37,37,450 TOTAL 9,56,456 8,18,63,700 8,27,03,880 3 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO 3. ON THE BASIS OF THE INCOME DECLARED BY ASSESSEE BEFORE THE SETTLEMENT COMMISSION, AO COMPLETED THE ASSESSMENT U/S 143(3) READ WITH SECTION 153A VIDE ORDER DATED 30/12/2011 BY DETERMINING THE TOTAL INCOME AT RS. 45,50,840 INCLUDING ADDITIO NAL INCOME OFFERED BEFORE THE SETTLEMENT COMMISSION. PURSUANT TO THE A SSESSMENT ORDER PASSED, AO ISSUED A NOTICE DIRECTING ASSESSEE TO SH OW CAUSE AS TO WHY PENALTY U/S 271(1)(C) SHALL NOT BE IMPOSED FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INC OME. IN RESPONSE TO THE SAID NOTICE, ASSESSEE SUBMITTED ITS EXPLANAT ION STATING THEREIN THAT AS ASSESSMENT IN CASE OF ASSESSEE HAS BEEN COM PLETED BY ACCEPTING THE INCOME OFFERED BY ASSESSEE BEFORE THE SETTLEMENT COMMISSION AND NO OTHER ADDITIONS HAVE BEEN MADE N EITHER THERE CAN BE FURNISHING OF INACCURATE PARTICULARS OF INCO ME NOR CONCEALMENT OF INCOME. AO AFTER GOING THROUGH THE EXPLANATION O F ASSESSEE, OBSERVED THAT THOUGH ASSESSEE BEFORE THE SETTLEMENT COMMISSION OFFERED ADDITIONAL INCOME, BUT, HE DID NOT OFFER TH E INCOME SO DISCLOSED IN THE RETURNS FILED. AO OBSERVED THAT SI NCE ASSESSEE HAS EARNED INCOME WHICH HE SHOULD HAVE DECLARED IN THE RETURN OF INCOME, BUT, DID NOT DO SO, HE IS LIABLE TO BE VISI TED WITH PENALTY U/S 271(1)(C) IN VIEW OF EXPLANATION 1 AND 5A OF SECTIO N 271(1)(C). ACCORDINGLY, AO PROCEEDED TO PASS IMPUGNED ORDER U/ S 271(1)(C) IMPOSING PENALTY OF RS. 14,90,314 BEING 100% OF TAX COMPONENT OF THE ALLEGED UNDISCLOSED INCOME. SIMILAR ORDERS IMPO SING PENALTIES WERE ALSO PASSED IN AYS 2006-07 TO 2009-10. BEING AGGRIEVED OF THE PENALTY ORDERS, SO PASSED, ASSESSEE PREFERRED APPEA L BEFORE LD. CIT(A). 4. BEFORE LD. CIT(A), ASSESSEE SUBMITTED THAT ADDIT IONAL INCOME WAS OFFERED BY ASSESSEE NOT ONLY AT THE TIME OF SEA RCH AND SEIZURE OPERATION WHEN STATEMENT WAS RECORDED FROM HIM U/S 132(4), BUT, IT WAS ALSO DECLARED IN THE APPLICATION FILED BEFORE T HE SETTLEMENT COMMISSION AND TAXES WERE ALSO PAID. IT WAS SUBMITT ED, ASSESSMENT ORDER WAS ALSO PASSED SOLELY ON THE BASIS OF THE DE CLARATION MADE BY 4 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO ASSESSEE BEFORE THE SETTLEMENT COMMISSION. THEREFOR E, THERE CANNOT BE ANY CONCEALMENT OF INCOME OR MISREPRESENTATION O F FACTS BY ASSESSEE. IT WAS FURTHER SUBMITTED, AO HAS NOT FOUN D ANY INCOME THAT WAS NOT KNOWN TO THE DEPARTMENT. IN SUPPORT OF HIS CONTENTION, ASSESSEE RELIED ON CERTAIN JUDICIAL PRECEDENTS. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE IN THE CONT EXT OF FACTS AND MATERIALS ON RECORD, NOTED THAT THOUGH ASSESSEE IN THE APPLICATION MADE BEFORE THE SETTLEMENT COMMISSION HAD OFFERED A DDITIONAL INCOME OF RS. 8,18,63,700 FOR THE AYS 2005-06 TO 20 09-10 AND ALSO PAID TAXES ON THEM, HOWEVER, THE SETTLEMENT COMMISS ION REJECTED APPLICATION ON THE GROUND THAT UNACCOUNTED INCOME D ISCLOSED IN THE APPLICATION FILED BY ASSESSEE WAS NOT TRUE AND DID NOT PERTAIN TO HIM. SHE FURTHER NOTED THAT IN CASE OF M/S JB EDUCATIONA L SOCIETY AND M/S JOGINAPALLY BR EDUCATIONAL SOCIETY APPEALS WERE FIL ED BEFORE ITAT CHALLENGING SIMILAR ADDITIONS MADE. IN COURSE OF HE ARING BEFORE ITAT, A SWORN AFFIDAVIT OF SHRI R. KONDAL RAO, PRESENT AS SESSEE, WAS FILED WHEREIN HE STATED THAT THE EXCESS FEES/CAPITATION F EES COLLECTED BY HIM IS HIS OWN INCOME, WHICH HE COLLECTED WITHOUT A PPROVAL OF THE MANAGEMENT AND WITHOUT REVEALING IT TO THE MANAGEM ENT. SHE FURTHER NOTED THAT ON THE BASIS OF THE AFFIDAVIT FILED, THE TRIBUNAL HELD THAT SINCE THE EXCESS FEES/CAPITATION FEES HAS BEEN ADMI TTED AS UNDISCLOSED INCOME BY SHRI R. KONDAL RAO, NO ADDITI ON OF THE SAID AMOUNT CAN BE MADE AT THE HANDS OF THE INSTITUTION/ SOCIETY. ON THE BASIS OF THE OBSERVATION MADE BY ITAT IN CASE OF ED UCATIONAL INSTITUTIONS, LD. CIT(A) HELD THAT PENALTY IMPOSED U/S 271(1)(C) IS VALID AS ASSESSEE HAS FILED INACCURATE PARTICULARS OF INC OME THEREBY CONCEALED THE INCOME. BEING AGGRIEVED, ASSESSEE IS BEFORE US. 5. LD. AR MORE OR LESS REITERATING THE SUBMISSIONS MADE BEFORE THE DEPARTMENTAL AUTHORITIES SUBMITTED, FROM THE ST AGE OF SEARCH AND SEIZURE OPERATION ITSELF, ASSESSEE HAD ADMITTED EXC ESS FEES COLLECTED BY HIM FROM STUDENTS AS HIS ADDITIONAL INCOME. IN T HIS CONTEXT, HE REFERRED TO THE STATEMENT OF ASSESSEE, A COPY OF WH ICH IS IN PAPER 5 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO BOOK. FURTHER REFERRING TO APPLICATION MADE BEFORE THE DDIT(INV.) DURING THE POST SEARCH PROCEEDING, LD. AR SUBMITTED , THOUGH, THE MONEY WAS COLLECTED FROM THE STUDENTS OVER AND ABOV E THE PRESCRIBED FEES, BUT, THE SAME WAS UTILIZED FOR CHARITABLE PUR POSE OF MEETING THE EXPENSES OF 500 BEDDED HOSPITAL RUN BY JB GROUP. IT WAS STATED IN THE SAID LETTER THAT THOUGH THE EXCESS FEES WAS COLLECT ED BY ASSESSEE ALONG WITH OTHER PERSONS NAMELY CH. KRISHNA RAO AND SHRI PRAKASH RAO, BUT, ASSESSEE OFFERED TO DECLARE ENTIRE INCOME AT HIS HANDS IN APPLICATION FILED BEFORE THE SETTLEMENT COMMISSION AND ALSO PAID TAXES. LD. AR REFERRING TO THE ORDER PASSED BY THE SETTLEMENT COMMISSION SUBMITTED BEFORE US, WHILE REJECTING ASS ESSEES APPLICATION, HOWEVER, THE SETTLEMENT COMMISSION HEL D THAT UNDISCLOSED DECLARED BY ASSESSEE DO NOT PERTAIN TO HIM. THEREFORE, IN THIS SITUATION, IT CANNOT BE SAID THAT ASSESSEE HAS EITHER FURNISHED INACCURATE PARTICULARS OR CONCEALED THE PARTICULARS OF INCOME. LD. AR SUBMITTED, THE EXCESS FEES COLLECTED AT THE TIME OF ADMISSION OF STUDENTS WERE ALSO ADDED AT THE HANDS OF EDUCATIONA L INSTITUTIONS IN THEIR ASSESSMENTS. WHEN THE APPEALS PERTAINING TO T HESE EDUCATIONAL INSTITUTIONS CAME UP FOR HEARING BEFORE THE TRIBUNA L, AN AFFIDAVIT OF SHRI R. KONDAL RAO FILED WHEREIN IT IS STATED THAT SRI R. KONDAL RAO HAS ADMITTED EXCESS FEES COLLECTED AS HIS ADDITIONA L INCOME BEFORE THE SETTLEMENT COMMISSION. ON THE BASIS OF THE DECL ARATION MADE BY SRI R. KONDAL RAO IN THE AFFIDAVIT, TRIBUNAL DELETE D THE ADDITION MADE AT THE HANDS OF EDUCATIONAL INSTITUTIONS SINCE ALRE ADY THE AMOUNT HAS BEEN ASSESSED AT THE HANDS OF SRI R. KONDAL RAO. LD . AR SUBMITTED, IN THE AFORESAID FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT ASSESSEE HAS CONCEALED HIS INCOME CONSIDERING THE F ACT THAT THE DEPARTMENTAL AUTHORITIES THEMSELVES WERE NOT SURE A T WHOSE HANDS INCOME IS TO BE ASSESSED. LD. AR REFERRING TO THE D ECISION OF ITAT HYDERABAD IN CASE OF SUN INFRA VS. ACIT, 30 ITR (TR IB) 451 SUBMITTED, WHEN ASSESSEE FROM INITIAL STAGE OF SEAR CH AND SEIZURE OPERATION PROCEEDING HAS CONSISTENTLY OFFERED THE A DDITIONAL INCOME AND THERE IS NO OTHER MATERIAL BEFORE AO TO EITHER PROVE CONCEALMENT 6 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME, RATHER, ON THE BASIS OF THE DECLARATION MADE BY ASSESSEE, ASSE SSMENTS HAVE BEEN COMPLETED, IMPOSITION OF PENALTY IS NOT JUSTIF IED. 6. LD. DR, ON THE OTHER HAND, SUBMITTED BEFORE US, ASSESSEE EVEN THOUGH DECLARED ADDITIONAL INCOME IN APPLICATION FI LED BEFORE THE SETTLEMENT COMMISSION, BUT, HE NEVERTHELESS FAILED TO OFFER THE SAID ADDITIONAL INCOME IN THE RETURNS FILED FOR AYS 2005 -06 TO 2009-10 IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THEREFORE, ASSESSEE HAVING NOT MADE ANY VOLUNTARY DISCLOSURE OF ADDITIONAL INC OME AND ON THE CONTRARY HAVING FAILED TO DISCLOSE THE INCOME EVEN THOUGH HE HAS EARNED SUCH INCOME, THE PROVISIONS OF SECTION 271(1 )(C) ARE CLEARLY ATTRACTED. HE FURTHER SUBMITTED, SINCE THERE IS NO VOLUNTARY DISCLOSURE BY ASSESSEE, EXPLANATION 1 AND 5A OF SECTION 271(1) (C) ARE CLEARLY ATTRACTED. LD. DR SUBMITTED, EXPLANATION 5A TO SECT ION 271(1)(C) IS A DEEMING PROVISION, HENCE, NO LENIENCY CAN BE SHOWN TO ASSESSEE IN THE MATTER OF LEVY OF PENALTY. IN SUPPORT OF SUCH C ONTENTION, HE RELIED UPON A DECISION OF HONBLE SUPREME COURT IN CASE OF MAK DATA P. LTD. VS. CIT AND THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF KAMAL CHAND JAIN VS. ITO, [2005] 277 ITR 429 (DEL.) 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF RE VENUE AUTHORITIES. AS CAN BE SEEN FROM THE MATERIALS ON RECORD, DURING THE SEARCH AND SEIZURE OPERATION, IT WAS FOUND THAT EXCESS FEES HA S BEEN COLLECTED FROM ADMISSION OF STUDENTS WITHOUT ACCOUNTING FOR I N THE BOOKS OF ACCOUNT OF EDUCATIONAL INSTITUTIONS. HOWEVER, SHRI R. KONDAL RAO, PRESENT ASSESSEE, WHO WAS WORKING AS MANAGER OF THE EDUCATIONAL INSTITUTIONS RUN BY SOCIETY FILED AN APPLICATION BE FORE DDIT(INV.) WHEREIN HE ADMITTED OF HAVING COLLECTED EXCESS FEE ALONG WITH TWO OTHERS WITHOUT THE KNOWLEDGE OF THE MANAGEMENT, BUT , THE AMOUNT SO COLLECTED WAS NOT UTILIZED FOR THEIR PERSONAL BENEF ITS BUT UTILIZED IN CHARITABLE ACTIVITY OF PROVIDING MEDICAL FACILITY I N 500 BEDED HOSPITAL RUN BY SOCIETY FREE OF COST. IT IS ALSO A FACT ON R ECORD THAT IN 7 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO APPLICATION FILED BEFORE THE SETTLEMENT COMMISSION ASSESSEE NOT ONLY REITERATED THESE FACTS BUT ALSO OFFERED EXCESS FEES COLLECTED AMOUNTING TO RS. 8,18,63,700 AS ADDITIONAL INCOME I N DIFFERENT ASSESSMENT YEARS AND ALSO PAID TAXES DUE THEREON. H OWEVER, THE SETTLEMENT COMMISSION REJECTED THE APPLICATION OF A SSESSEE OBSERVING AS UNDER: 9 I) WE FIND THAT AT THE TIME OF SEARCH, SEIZED DOC UMENTS NO. JB/AA/1 TO 10 WERE SCRUTINIZED THOROUGHLY BY THE I .T. DEPARTMENT AND IT WAS FOUND THAT THIS MATERIAL EST ABLISHED RECEIPT OF UNACCOUNTED CAPITATION FEES IN CASH. IN FACT, SHRI VAMSIDHAR RAO ADMITTED THIS POSITION AND OFFERED A N UNDISCLOSED INCOME OF RS. 7.5 CRORES FOR TAXATION ON THIS ACCOUNT. THIS WAS ON 10/09/2009 (ANSWER TO Q. NO. 45 OF THE STATEMENT OF SHRI J. VAMSIDHAR RAO.) THIS DECLARAT ION WAS LATER ON CONFIRMED NOT ONLY BY SHRI J.BHASKAR RAO WHO IS THE MAIN PERSON OF THE GROUP BUT ALSO BY HIS OTHER SON SHRI J.K. RAO. THE OFFER OF DISCLOSURE OF SUCH INCOME HAS BEEN REITER ATED A NUMBER OF TIMES BY SHRI J. BHASKAR RAO AND HIS SONS. II) WE ALSO FIND THAT SHRI K. ASHOK MEHTA REDDY, S HRI PURNACHANDRA RAO PUSTI AND SHRI GANJI MEGHNATH HAV E CATEGORICALLY STATED IN THEIR STATEMENTS THAT THEY WERE MERELY NEGOTIATING ON BEHALF OF SHRI BHASKAR RAO AND WHAT EVER UNACCOUNTED CAPITATION FEES WAS RECEIVED IN CASH W AS HANDED OVER TO SHRI BHASKAR RAO. THEY HAVE FURTHER ADMITT ED THAT EVEN THE QUANTUM OF UNACCOUNTED CAPITATION FEES WAS FIX ED IN CONSULTATION WITH SHRI J. BHASKAR RAO. WE HAVE NOT ED THAT, AT DIFFERENT POINTS OF TIME BOTH DURING AND AFTER THE SEARCH, SHRI BHASKAR RAO, SHRI VAMSIDHAR RAO AND SHRI J.K. RAO HAVE CONFIRMED THE CORRECTNESS NOT ONLY OF THEIR OWN ST ATEMENTS BUT ALSO THOSE GIVEN BY SHRI PURNACHANDRA RAO PUSTI, S HRI K. ASHOK MEHTA REDDY AND SHRI GANJI MEGHNATH. THESE STATEME NTS ARE NOT RETRACTED BY ANY ONE. IN ADDITION, J. BHASKAR RAO DECLINED TO CROSS-EXAMINE THESE PERSONS WHEN SUCH AN OPPORT UNITY WAS GIVEN TO THEM. III) THE STATEMENTS OF THE APPLICANT RECORDED DURI NG THE SEARCH OR LATER NOWHERE INDICATE THAT IT WAS HE WHO FINALIZED/COLLECTED/UTILIZED THE UNACCOUNTED CASH RECEIPTS. IV) WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. AR THAT THE APPLICANT HAD EMBEZZLED THE FUNDS WHICH HAVE B EEN RECEIVED BY WAY OF UNACCOUNTED CAPITATION FEES AND APPLIED IT FOR CHARITABLE PURPOSES. IT IS TOTALLY INCONCEIVAB LE THAT, FOR THE SAKE OF CHARITY, ANY PERSON IN HIS RIGHT SENSES WO ULD TAKE A RISK WHICH MAY INVITE SERIOUS CRIMINAL CONSEQUENCES. WE FIND THAT 8 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO ALL EVIDENCE INCLUDING STATEMENTS OF VARIOUS PERSO NS CLEARLY ESTABLISHES THAT THE UNACCOUNTED INCOME DISCLOSED IN THE SETTLEMENT APPLICATION FILED BY THE APPLICANT DID NOT PERTAIN TO HIM. HENCE, WE FIND THAT THE DISCLOSURE MADE BY TH E APPLICANT IS NOT TRUE. 8. ON PERUSAL OF THE ASSESSMENT ORDER, IT IS PATENT AND OBVIOUS THAT AO SOLELY ON THE BASIS OF THE DECLARATION MADE BY ASSESSEE BEFORE THE SETTLEMENT COMMISSION HAS COMPUTED THE I NCOME OF ASSESSEE AND HE HAS NOT REFERRED TO ANY OTHER INCRI MINATING MATERIAL TO INDICATE EARNING OF ADDITIONAL INCOME BY ASSESSE E. PENALTY U/S 271(1)(C) HAS ALSO BEEN IMPOSED BY AO SOLELY ON THE REASON THAT THOUGH ASSESSEE OFFERED ADDITIONAL INCOME IN THE AP PLICATION FILED BEFORE THE SETTLEMENT COMMISSION, BUT, HE FAILED TO DISCLOSE IT IN THE RETURN OF INCOME FILED. LD. CIT(A) HAS ALSO CONFIRM ED THE IMPOSITION OF PENALTY BY OBSERVING THAT THERE IS COLLUSION BETWEE N ASSESSEE AND THE MANAGEMENT OF THE SOCIETY TO MISLEAD THE DEPARTMENT . HOWEVER, THE SETTLEMENT COMMISSION HAS MADE CATEGORICAL OBSERVAT IONS THAT THERE BEING NO MATERIAL WHICH COULD INDICATE THAT ASSESSE E EMBEZZLED FUNDS OF SOCIETY, CLAIM OF ASSESSEE THAT UNACCOUNTE D INCOME BELONG TO HIM CANNOT BE ACCEPTED. THAT BEING THE OBSERVATI ON OF THE SETTLEMENT COMMISSION, LD. CIT(A), IN OUR VIEW, COU LD NOT HAVE OBSERVED THAT MANAGEMENT SHOULD HAVE TAKEN ACTION A GAINST ASSESSEE FOR EMBEZZLING FUNDS OF SOCIETY. MOREOVER, IT IS A FACT ON RECORD THAT ADDITIONAL INCOME OFFERED BY ASSESSEE R EPRESENTING EXCESS FEES/CAPITATION FEES RECEIVED FROM STUDENTS WERE ALSO ADDED AT THE HANDS OF EDUCATIONAL INSTITUTIONS. FROM THES E FACTS, IT IS CLEAR THAT DEPARTMENTAL AUTHORITIES THEMSELVES WERE NOT S URE AS TO AT WHOSE HANDS INCOME IS TO BE ASSESSED OR WHETHER THE INCOME ACTUALLY BELONGS TO ASSESSEE. FURTHER EVEN THOUGH, ASSESSEE OFFERED ADDITIONAL INCOME BEFORE THE SETTLEMENT COMMISSION, BUT, THE SETTLEMENT COMMISSION ON APPRECIATION OF EVIDENCES AVAILABLE BEFORE IT REFUSED TO ACCEPT ASSESSEES CLAIM THAT ADDITIONA L INCOME IS PERTAINING TO ASSESSEE. THEREFORE, WHEN THE DEPARTM ENTAL AUTHORITIES ARE THEMSELVES NOT SURE ABOUT THE REAL OWNER OF INC OME AND IN FACT 9 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO WHEN THERE IS CONFLICT OF OPINION BETWEEN THE SETTL EMENT COMMISSION AND A.O. ON THE OWNERSHIP OF INCOME, ASSESSEE CANNO T BE PROCEEDED FOR IMPOSITION OF PENALTY U/S 271(1)(C) ONLY BECAUS E HE HAS COME FORWARD TO OFFER SUCH INCOME OR IT HAS BEEN ASSESSE D IN HIS HANDS FOR WHATEVER MAY BE THE REASON. 9. THOUGH, IT MAY BE A FACT THAT IN COURSE OF HEARI NG OF APPEAL IN CASE OF EDUCATIONAL INSTITUTIONS BEFORE ITAT, AN AF FIDAVIT WAS FILED BY SRI R. KONDAL RAO, PRESENT ASSESSEE, WHEREIN IT IS STATED THAT EXCESS/CAPITATION FEES COLLECTED WAS NOT HANDED OVE R TO THE MANAGEMENT AND IT IS HIS INCOME BUT ON SCRUTINY OF THE SAID AFFIDAVIT, AS HAS BEEN EXTRACTED IN THE ORDER PASSED BY TRIBUN AL IN ITA NO. 29/HYD/2013 AND OTHERS DATED 28/10/2013, IT IS VERY MUCH CLEAR THAT STATEMENTS MADE IN THE AFFIDAVITS ARE ALMOST IDENTI CAL TO THE FACTS MENTIONED IN THE APPLICATION FILED BEFORE THE SETTL EMENT COMMISSION BY ASSESSEE. NO DOUBT, SIMILAR ADDITION MADE IN TH E HANDS OF EDUCATIONAL INSTITUTIONS WERE DELETED BY THE TRIBUN AL ON THE BASIS OF THE AFFIDAVIT FILED BY THE ASSESSEE SRI R. KONDAL R AO. HOWEVER, THE CONCLUSION DRAWN BY THE TRIBUNAL IS NOT BECAUSE OF ANY POSITIVE EVIDENCE ON RECORD TO CONCLUSIVELY PROVE THE FACT T HAT THE ADDITIONAL INCOME BELONGS TO ASSESSEE, BUT MORE DRIVEN BY THE PRINCIPLE THAT SAME INCOME CANNOT BE ASSESSED IN MORE THAN ONE HAN D. THEREFORE, AS THE ADDITIONAL INCOME HAS ALREADY BEEN ASSESSED AT THE HANDS OF ASSESSEE, THE TRIBUNAL DELETED SIMILAR ADDITIONS MA DE IN CASE OF INSTITUTIONS. AS STATED HEREIN BEFORE, THERE IS NOT HING IN ASSESSMENT ORDER TO SUGGEST THAT ADDITIONAL INCOME ASSESSED AT THE HANDS OF ASSESSEE IS AS A RESULT OF ANY INCRIMINATING MATERI AL. NEITHER AT THE STAGE OF ASSESSMENT NOR AT THE TIME OF PENALTY PROC EEDING, AO HAS BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT ADDITIO NAL INCOME REALLY BELONGS TO ASSESSEE. ONLY BECAUSE ASSESSEE OFFERED ADDITIONAL INCOME AT HIS HAND THAT WILL NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. FOR IMPOSING PENALTY U/S 271 (1)(C), AO HAS TO 10 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO PROVE THE FACT OF CONCEALMENT BY VIRTUE OF WILLFUL NEGLIGENCE OR DELIBERATE ACT BY ASSESSEE. ONE MORE ASPECT WHICH N EEDS DELIBERATION IS, THOUGH IN THE PENALTY ORDER, AO HA S IN CLEAR TERMS MENTIONED THAT IMPOSITION OF PENALTY IS FOR CONCEAL MENT OF INCOME AND NOT FURNISHING OF INACCURATE PARTICULARS OF INCOME, BUT, LD. CIT(A) HAS OBSERVED THAT ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF INCOME. FROM THE AFORESAID FACTS, IT IS CLEAR THAT THE DEPARTMENTAL AUTHORITIES ARE NOT SURE AS TO WHICH LIMB OF THE PE NALTY PROVISION IS ATTRACTED. THEREFORE, CONSIDERING THE TOTALITY OF F ACTS AND CIRCUMSTANCES AND KEEPING IN VIEW, THE OBSERVATIONS MADE BY SETTLEMENT COMMISSION, WE ARE OF THE OPINION THAT S INCE NO CONCLUSIVE FINDING OR MATERIAL HAS BEEN BROUGHT ON RECORD TO PROVE EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACC URATE PARTICULARS OF INCOME, IMPOSITION OF PENALTY IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE IS NOT JUSTIFIED. AS FAR AS THE DECISI ONS RELIED UPON BY LEARNED D.R. ARE CONCERNED, THOUGH WE FULLY AGREE W ITH THE PRINCIPLES LAID DOWN THEREIN, HOWEVER, THEY CANNOT BE APPLIED UNIFORMLY TO ALL CASES DIVORCED FROM THE FACTS ON THE BASIS OF WHICH SUCH PRINCIPLE ARE DECIDED. AFTER CAREFUL ANALYSIS OF THE DECISIONS, W E ARE OF THE VIEW THAT THEY WILL NOT APPLY TO THE FACTS OF THE PRESEN T CASE. IN AFORESAID VIEW OF THE MATTER, WE ARE OF THE OPINION THAT IMPO SITION OF PENALTY UNDER SECTION 271(1)(C) IN THE FACTS OF THE PRESENT CASE IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE SAME. 10. AS THE FACTS AND MATERIALS ARE MATERIALLY IDENT ICAL IN OTHER APPEALS UNDER CONSIDERATION TO THAT OF AY 2005-06 ( SUPRA), FOLLOWING OUR CONCLUSIONS DRAWN THEREIN, WE ALSO DELETE THE P ENALTIES IMPOSED IN THESE APPEALS. 11 ITA NOS. 526 TO 530 /HYD/2014 SHRI R. KONDAL RAO 11. IN THE RESULT, ALL THE APPEALS UNDER CONSIDERAT ION ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE, 2015. SD/- SD/- (INTURI RAMA RAO) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 19 TH JUNE, 2015 KV COPY TO:- 1) SHRI R. KONDAL RAO, C/O M/S MAHESH, VIRENDER & SRIRAM, CAS., 6-3-788/36 & 37A, AMEERPET, HYDERABAD. 2) ACIT, CENTRAL CIRCLE - 1, HYDERABAD 3 CIT(A)-I, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.