Shri Ravinder Bagga, Phagwara V. The Dy. Commissioner of Income Tax, Phagwara

ITA 542/ASR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9562 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: J S BHASIN; JASMINE KAUR ADVS
• Keywords: Unexplained investment; Revised return
• Section: 143(3); 133(6); 27; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDHAR) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO. 542 (ASR)/2015 ASSESSMENT YEAR: 2010-11 SH. RAVINDER BAGGA, PROP. M/S BAGSON FOUNDRIES, KHERA ROAD, PHAGWARA. PAN:AAOPB3695G VS. DY. CIT, PHAGWARA CIRCLE, PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN & SMT. JASMINE KAUR (ADVS.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR) DATE OF HEARING: 30.06.2016 DATE OF PRONOU NCEMENT: 15.09.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JALANDHAR DATED 13.08.2015 FOR ASST. YEAR: 2010-11. 2. THE ASSESSEE HAS TAKEN FIVE GROUNDS OF APPEAL, H OWEVER, THE CRUX OF GRIEVANCE OF ASSESSEE IS THE ACTION OF LEARNED CIT( A), BY WHICH HE HAD UPHELD THE PENALTY IMPOSED BY ASSESSING OFFICER U/S 271(1)(C ) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE PENA LTY ORDER ARE THAT THE SCRUTINY PROCEEDINGS IN THIS CASE WERE INITIATED ON THE BASIS OF SUSPICIOUS TRANSACTIONS REPORT RECEIVED FROM ASSISTANT DIRECTO R OF INCOME TAX, JALANDHAR AND IT WAS OBSERVED THAT ASSESSEE HAD MAD E INVESTMENTS IN VARIOUS INSURANCE POLICIES TO THE TUNE OF RS.7,50,0 00/-. THE ASSESSEE OFFERED ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 2 THE SAID INVESTMENT IN INSURANCE POLICES AS ADDITIO NAL INCOME FOR TAXATION PURPOSES. THE ASSESSMENT WAS COMPLETED U/S 143(3) O N THE BASIS OF REVISED RETURN WHEREIN THE ASSESSEE HAD DECLARED THE AMOUNT OF RS.7,50,000/-. IN VIEW OF THE ABOVE, THE ASSESSEE WAS CONFRONTED AS T O WHY PENALTY U/S 271(1)(C) BE NOT IMPOSED. IN RESPONSE TO THE NOTICE , THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FILED REVISED RETURN AT HIGHE R INCOME THAN THE ORIGINAL RETURN BUT ASSESSING OFFICER HELD THAT AS PER RECOR D AVAILABLE WITH THE OFFICE REVISION OF RETURN WAS NOT VOLUNTARILY AS THE ASSES SEE HAD REVISED RETURN OF INCOME AFTER INITIATION OF PROCEEDINGS BY THE ADDL. (INV.), JALANDHAR. THE ASSESSEE HAD ALSO RELIED UPON THE VARIOUS CASE LAWS WHICH THE ASSESSING OFFICER DISTINGUISHED AND THEN, IMPOSED A PENALTY E QUIVALENT 100% OF TAX SOUGHT TO BE EVADED. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A) AND REITERATED HIS SUBMISSIONS, HOWEVER THE LEARNED CIT (A) ALSO DISMISSED THE APPEAL BY HOLDING AS UNDER: I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSIN G OFFICER AS MADE BY HIM IN THE PENALTY ORDER. I HAVE ALSO CONSIDERED WRITTE N SUBMISSIONS OF THE ASSESSEE FILED VIDE LETTER DATED 24.07.2014 AS WELL AS OTHER MATERIAL PLACED ON RECORD. I HAVE FURTHER CONSIDERED VARIOUS JUDICI AL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE AS WELL AS BY THE ASSESSING OF FICER ON THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS AS WELL AS THE OTHER MATERIAL BROUGHT ON RECORD MORE SPECIFICALLY THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE ADIT (INV.), JALANDHAR, I A M OF THE OPINION THAT THE REVISED RETURN FILED BY THE ASSESSEE ON 02.03.2011 FOR THE YEAR UNDER CONSIDERATION CANNOT BE SAID TO BE A VOLUNTARY RETU RN UNDER ANY STRETCH OF IMAGINATION. MOREOVER, THE ASSESSEE WAS FULLY AWARE ABOUT HIS INVESTMENT IN LIC POLICIES AND COULD HAVE DISCLOSED THE INVEST MENT IN THE ORIGINAL RETURN FILED BY HIM BUT DELIBERATELY DID NOT DISCLOSE THE SAME IN HIS ORIGINALLY FILED RETURN OF INCOME WHICH HE HAS EARNED FROM UNDISCLOSED SOURCES: EVEN, THE SOURCES OF UNDISCLOSED INCOME HA VE NOT BEEN DISCLOSED IN ANY OF THE PROCEEDINGS UNDER THE ACT. ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 3 FROM THE RECORDS ONE THING IS VERY CLEAR THAT THE A SSESSEE DECIDED TO REVISE THE RETURN ONLY WHEN ENQUIRIES ABOUT HIS INVESTMENT IN LIC POLICIES WERE INITIATED AND HE WAS CORNERED FROM ALL ANGLES AND THE DEPARTMENT GOT TO KNOW ABOUT HIS UNACCOUNTED INVESTMENT IN LIC POLICIES. AS SOON AS THE ADIT(INV.), JALANDHAR ASKED CERTAIN INFORMATION FRO M THE ASSESSEE INCLUDING THE INFORMATION IN RESPECT OF SOURCE OF INVESTMENT IN LIC POLICIES, THE ASSESSEE IMMEDIATELY DECIDED TO FILE THE REVISED RE TURN DISCLOSING ADDITIONAL INCOME OF RS. 7,50,000/- WHICH REPRESENTED HIS INVESTMENT IN LIC POLICIES FROM UNDISCLOSED SOURCES. THE FACT THAT THE REVISED RETURN IS NOT A VOLUNTARY RETURN IS ALSO APPARENT FROM THE CORRESPONDENCE MAD E BY THE ASSESSEE WITH THE ADIT(INV.), JALANDHAR. HAD THE ENQUIRIES NOT BE EN INITIATED BY THE ADIT(INV.), JALANDHAR, THE ASSESSEE WOULD NEVER HAV E FILED REVISED RETURN. IN VIEW OF THESE FACTS, THE DISCLOSURE OF ADDITIONAL I NCOME OF RS. 12,00,000/- IN THE REVISED RETURN CANNOT BE SAID TO BE A VOLUNTARY DISCLOSURE. IN FACT THE ASSESSEE CAME FORWARD TO FILE THE REVISED RETURN WH EN HE WAS CORNERED FROM ALL ANGLES BY THE DEPARTMENT. MOREOVER, THERE WAS N O ALTERNATIVE LEFT WITH THE ASSESSEE EXCEPT TO ADMIT THE CONCEALMENT AND PA Y TAX THEREON. EVEN OTHERWISE IT WOULD NOT HAVE MADE ANY DIFFERENCE AS THE DEPARTMENT WAS GOING TO TAKE ACTION AGAINST THE ASSESSEE ON THE BA SIS OF SPECIFIC INFORMATION IN ITS POSSESSION. THE SUBMISSION OF THE ASSESSEE T HAT THE RETURN HAS BEEN REVISED VOLUNTARILY AND TO WIN PEACE OF MIND DO NOT HOLD GOOD IN VIEW OF THE ABOVE STATED FACTS. RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS:- [2014] 49 TAXMAN.COM 361 (MUMBAI-TRIB.)/ 152 ITD 57 8 (MUMBAI-TRIB.). IN THE DECISION, IT LIAS BEEN HELD BY THE HONORABLE TRIBUNAL THAT WHERE ASSESSEE. ENGAGED IN THE BUSIN ESS OF REAL ESTATE CONSULTANCY AND BROKING, FILED A REV ISED RETURN PURSUANT TO SURVEY PROCEEDINGS DECLARIN G CERTAIN UNDISCLOSED INCOME ON ACCOUNT OF COMMISSION RECEIVED IN CASH, SAID RETURN COULD NOT BE REGARDE D AS A VOLUNTARY RETURN AND, THEREFORE, ASSESSEE BEIN G GUILTY OF CONCEALMENT OF PARTICULARS OF INCOME, W AS LIABLE TO PAY PENALTY UNDER SECTION 271(1 ) (C) OF THE ACT. IT IS PERTINENT TO MENTION HERE THAT THE HONORABLE TRIBUNAL HAS ALSO CONSIDERED THE DECISIONS OF HONORABLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF SH. SURESH CHANDRA MITTAL [CIT VS. SURESH C HANDRA MITTAL REPORTED AT 241 ITR 0124] AND OF THE HONORABLE SUPREME COURT IN THE SAME CASE REPORTED AT 251 ITR 0009 WHILE GIVING DECISION IN F AVOUR OF REVENUE. THE DECISIONS HAVE BEEN HEAVILY RELIED UPON BY THE ASSE SSEE IN HER WRITTEN SUBMISSIONS. 2013-TIOL-58-SC-IT MAK DATA PVT LTD VS. COMMISSIONE R OF INCOME TAX HAVING HEARD THE PARTIES, THE SUPREME COURT HEL D THAT, WE FULLY CONCUR WITH THE VIEW OF THE HIGH COURT THA T THE TRIBUNAL HAS NOT PROPERLY UNDERSTOOD OR APPRECIATED THE SCOPE OF EXPLANATION 1 TO SECTION 2 71(L)(C) OF THE ACT. THE AO, IN OUR VIEW, SHALL NOT BE CARRIED 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 CONCEALMEN T OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. EXPLANATION TO SE CTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE JS NOTICED BY THE AO, BETWEEN REP ORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIA BLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS S HIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE; ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 4 + ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED TH E ADDITIONAL SUM OF RS.40,74,000/- WITH A VIEW TO AVOID LITIGATION, BUY PEACE AND TO CHANNELIZE THE E NERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOME TAX DEP ARTMENT. STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER THE EXPLANATION 1 TO SECTION 27 L(L) (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 VOLU NTARY DISCLOSURE OF HER CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY: + WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME I N THE CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MA DE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. IT IS THE STANNARY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE HOOKS OF ACCO UNT, 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 CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PART ICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 211 READ WITH SECTION 274 OF THE INCOME TAX ACT. 1961: + THE AO HAS TO SATISFY WHETHER THE PENALTY PROCEED INGS HE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED T O RECORD HER SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. THE SCOPE OF SECTION 271 (L)(C) HAS ALSO BEEN ELABORATELY DISCUSSED BY LITER COURT IN UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS AND C IT VS. ATUL MOHAN BINDAL. THE PRINCIPLE LAID DOWN BY THER COURT, IN OUR VIEW, HAS BEEN CORRECTLY FOLLOWED BY THE REVENUE AND WE FIND NO ILLEGALITY IN THE DEPARTMENT INITIATING PEN ALTY PROCEEDINGS IN THE INSTANT CASE. WE THEREFORE , FULLY AGREE WITH THE VIEW OF THE HIGH COURT. HENCE, THE APPEAL LACKS MERIT AND IS DISMISSED. 5.3 NOW, I DEAL WITH THE DECISIONS RELIED UPON BY T HE ASSESSEE. APART FROM THE DECISIONS OF HONORABLE PUNJAB & HARY ANA HIGH COURT AND HONORABLE SUPREME COURT IN THE CASE OF SHRI SUR ESH CHANDRA MITTAL, THE ASSESSEE HAD ALSO PLACED RELIANCE ON TH E FOLLOWING DECISIONS:- (I) CIT VS. SURAJ BHAN (2007) 294 ITR 0481 (P & H). (II) CIT VS. GURU RAM DASS FRUIT & VEGETABLE (2003) 254 ITR 0361 (P&H) (III) JAYSUCK M PARMAR VS. ACIT (2012) 20 ITR (TRIB.) 68 7 (AHM) (IV) CIT VS. SAS PHARMACEUTICALS (201 1) 335 ITR 259 (DE L.) (V) CI T VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 230 CTR (SC) 320. (VI) CIT VS. VED PARKASH (2004) ITR 255 (P&H). (VII) CHEAP CYCLE STORE VS. CIT (2006) 281 ITR 166 (ALL). (VIII) SMT. PARKASH KUMARI VS. CIT (2010) 326 ITR 82 (BOM) . (IX) RP HANDA VS. CIT (1992) 198 ITR 54 (P&H). (X) CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (P&H ). (XI) CIT VS SURAJ BHAN (2007) 294 ITR 481 (P&H). (XII) CIT VS. GURBAX LAI & CO. (2002) 256ITR 0133 (P & H ) (XIII) CIT VS. BALWANT RAI (2009) 221 CTR (P&H) 573. (XIV) CIT VS SURESH CHAND BANSAL (2010) 329 ITR 330 (CAL) . (XV) SUDARSHAN SILK & SAREES VS CIT (2008) 300 ITR 0205 (SC) IN MY OPINION, NONE OF THE DECISIONS WHICH HAVE BEE N RELIED UPON BY ASSESSEE SUPPORT HER CASE AS THE FACTS OF THESE CAS ES ARE DISTINGUISHABLE THE CASE OF CIT VS. SURAJ BHAN, THE PENALTY LEVIED BY T HE ASSESSING OFFN WAS DELETED AS IN THAT CASE THERE WAS NO EVIDENCE EXCEP T THAT THE ADDITION AMOUNTS CONSTITUTED ASSESSEES INCOME IN THE YEARS IN QUESTION BUT IN THE CASE OF ASSESSEE THERE IS EVIDENCE WITH THE DEPARTM ENT IN THE FORM OF ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 5 INVESTMENT IN LIC POLICIES TO PROVE THAT THE ASSESS EE HAS CONCEALED THE PARTICULARS OF INCOME. MOREOVER, THE CONCEALMENT HA S BEEN CONFESSED BY THE ASSESSEE BY FILING REVISED RETURN. SO FACTS OF THE CASE OF CIT VS. SURAJ BHAN ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE OF T HE ASSESSEE. MOREOVER, THE DECISION IS BASED ON SURESH CHANDRA MITTALS CASE W HICH WAS CONSIDERED BY THE HONORABLE MUMBAI ITAT WHILE GIVING DECISION IN FAVOUR OF REVENUE. IN THE CASE OF CIT VS. GURU RAM DASS FRUIT & VEGETABLE , THE PENALTY WAS DELETED AS THE REVENUE COULD NOT PRODUCE THE COPY OF STATEMENT RECORDED BY THE ADIT AND EVEN THE REPORT OF ADIT WAS WITHHELD B Y THE DEPARTMENT. MOREOVER, MOST OF THE DRAFTS WERE FOUND TO BE ENTER ED IN THE BOOKS OF ACCOUNT BUT ON INCORRECT DATES WHEREAS IN THE CASE OF THE ASSESSEE NOTHING WAS DISCLOSED IN THE BOOKS AND INVESTMENT IS MADE F ROM UNDISCLOSED SOURCES. IN THE CASE OF CIT VS. GURBAX LAI & CO., T HE ASSESSEE HAD VOLUNTEERED INFORMATION AFTER THE ASSESSMENT WAS CO MPLETE AND THUS NO MOTIVE MUCH LESS ANY MALICIOUS CONDUCT WAS ATTRIBUT ABLE TO THE ASSESSEE WHEREAS IN THE CASE OF THE ASSESSEE, THERE WAS LOT OF INFORMATION WITH THE DEPARTMENT TO PROVE MALICIOUS CONDUCT OF THE ASSESS EE. SO, FACTS OF THIS CASE ARE ALSO DISTINGUISHABLE FROM THE FACTS OF THE CASE OF THE ASSESSEE. IN THE CASE OF SUDARSHAN SILKS & SAREES, THE HONORABLE APEX COURT DELETED THE PENALTY, AS THE ITAT HAS HELD THAT THE ASSESSMENTS WERE MADE TOTALLY ON THE BASIS OF ESTIMATED INCOME DISCLOSED IN THE REVISED RETURNS RATHER THAN ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SE ARCH. MOREOVER IT WAS HELD BY THE HONORABLE COURT THAT THE ADDITIONAL INC OME WAS DISCLOSED PURSUANT TO AN ASSURANCE POSSIBLY GIVEN BY THE SEAR CH PARTY THAT NO PENALTY WOULD BE LEVIED. WHEREAS THE FACTS OF THE CASE OF A SSESSEE ARE ENTIRELY DIFFERENT AS THERE WAS NO SUCH COMMITMENT FROM THE DEPARTMENT. SO, FACTS OF THIS CASE ARE ALSO DISTINGUISHABLE FROM THE FACT S OF THE CASE OF THE ASSESSEE. THE FACTS OF THE OTHER CASES RELIED UPON BY THE ASSESSEE ARE ALSO DISTINGUISHABLE FROM THE FACTS OF THE CASE OF THE A SSESSEE. IN VIEW OF THESE FACTS, NONE OF THE CASE LAWS RELIED UPON BY THE ASS ESSEE SUPPORT HER CASE AS ALL THE DECISIONS HAVE DIFFERENT FACTS FROM THE FAC TS OF THE CASE OF THE ASSESSEE. 5.4 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCE, I AM OF THE OPINION THAT THE ASSESSEE HAS CERTAINLY CONCEALED A ND FURNISHED INACCURATE PARTICULARS OF HIS INCOME TO THE EXTENT OF RS.7,50, 000/- WHICH REPRESENT THE UNDISCLOSED INVESTMENT OF THE ASSESSEE IN LIC POLIC IES. THE PENALTY OF RS.23,750/- LEVIED BY THE ASSESSING OFFICER IN THIS CASE UNDER SECTION 271(1) (C) OF THE ACT FOR CONCEALING AND FURNISHING INACCU RATE PARTICULARS OF INCOME TO THE EXTENT OF RS.7,50,000/- IS, THEREFORE, UPHEL D. IN THE RESULT, THE GROUND NO.1,2 AND 3 OF APPEAL TAKEN BY THE ASSESSEE ARE DISMISSED . 6. THE GROUND NO.4 OF APPEAL TAKEN BY THE ASSESSEE IS GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION AT ALL. 7. AS A RESULT APPEAL FILED BY THE ASSESSEE IS DISM ISSED. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 6 6. THE LEARNED AR SUBMITTED THAT THE RETURN WAS REV ISED WELL IN TIME WHEREIN INADVERTENT ERROR WAS RECTIFIED AND REVISED RETURN WAS ACCEPTED AND WAS NOT HELD TO BE INVALID AND THEREFORE, NO CASE O F CONCEALMENT COULD HAVE BEEN MADE BY THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER BEFORE COMPLETING THE ASSESSMENT EXAMINED RELEVANT DETAILS OF INVESTMENT IN INSURANCE POLICIES AND FOU ND THE SAME TO BE CORRECT. THE LEARNED AR FURTHER SUBMITTED THAT WHEN NO CONCE ALMENT WAS FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LE ARNED ASSESSING OFFICER COULD NOT FALL BACK UPON THE PURPORTED PROCEEDINGS BEFORE ADIT, TO INFER CONCEALMENT OF ANY INCOME IN ASSESSMENT. THE LEARNE D AR RELIED UPON THE JUDGMENT OF HONBLE ITAT, MUMBAI BENCHES, MUMBAI IN THE CASE OF JAYSUCK M PARMAR VS. ACIT (2012) 20 ITR (TRIB) 687 AND ALSO DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (2011) 335 ITR 359 (DEL), FOR THE PROPOSITION THAT THE PROCEEDINGS BEFORE ADIT ARE NO T THE PROCEEDINGS IN THE COURSE OF WHICH, SATISFACTION WITH REGARD TO CONCEA LMENT WAS TO BE RECORDED. IT WAS SUBMITTED THAT THE SATISFACTION HAD TO BE RE CORDED BY ASSESSING OFFICER IN THE COURSE OF ASSESSMENT, THAT TOO QUA T HE RETURN FILED. IT WAS SUBMITTED THAT IF THE REVISED RETURN WAS ACCEPTED A S SUCH, THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE LEARNED AR FURTHER SUBMITTED THAT NEITHER SEC. 139(5), NOR SEC. 271(1)(C) POSTULATE A SITUATION THAT THE RETURN REV ISED BY ASSESSEE, MUST BE VOLUNTARY ELSE IT WOULD INVITE PENALTY. THE LEARNED AR RELIED UPON THE FOLLOWING CASE LAWS: ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 7 (I) CIT VS. GURU RAM DASS FRUIT & VEGETABLE AGENCY (2002) 254 ITR 316 (P&H). (II) CIT VS. VED PARKAS (2004) 269 ITR 0255 (III) MAK DATA PVT. LTD. VS. CIT, 358 ITR 539 (SC) (IV) ACIT VS. ASHOK RAJ NATH (2012) 19 ITR 70 (TRIB ) DELHI. 7. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLACE D HIS RELIANCE ON THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE WAS ENTITLE D TO FILE REVISED RETURN OF INCOME AS PER THE PROVISIONS OF SEC.139(5) TILL 31 ST MARCH,2011 AND HE HAS FILED RETURN OF INCOME ON 02.03.2011, THEREFORE, TH ERE IS NO DISPUTE ABOUT THE VALIDITY OF REVISED RETURN. IN THE REVISED RETU RN THE ASSESSEE DECLARED ALL INVESTMENTS IN INSURANCE POLICIES AS ADDITIONAL INC OME AND PAID TAXES THEREON. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DID NOT FIND ANY DISCREPENCY IN THE REVISED RETURN OF INCOME AND ASSESSED THE INCOME AT THE SAME AMOUNT WHICH WAS OFFERED BY ASSESSEE IN HI S REVISED RETURN. 9. THE ADIT (INV.) VIDE LETTER DATED 25.01.2011 HAD REQUIRED ASSESSEE TO PROVIDE VARIOUS DETAILS OF BANK ACCOUNT S, INVESTMENTS, MOVABLE AND IMMOVABLE ASSETS, VECHICLES AND DETAILS ABOUT FOREING TRIPS UNDERTAKEN BY HIM. THERE IS NO SPECIFIC INDI CATION IN THE ABOVE SAID LETTER REGARDING INFORMATION WITH THE DEPARTME NT OF ASSESSEE HAVING INVESTED IN THE INSURANCE POLICIES. 10. ON 02.03.2011 THE ASSESSEE FILED RETURN DECLARI NG ADDITIONAL INCOME OF RS.7.5 LACS IN THE FORM OF INVESTMENT IN INSURAN CE POLICIES. THOUGH ASSESSEE FILED REVISED RETURN ONLY AFTER RECEIPT OF NOTICE U/S 133(6) DATED ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 8 25.01.2011 BUT THE FACT REMAINS THAT THE REVISED RE TURN WAS FILED WITHIN THE PRESCRIBED PERIOD OF TIME AND BEFORE THE DATE OF FI LING OF REVISED RETRUN THE ASSESSEE WAS NOT CONFRONTED WITH THE INFORMATION WH ICH THE DEPARMTENT WAS HAVING IN ITS PASSESSION. NOW WHEN THE REVISED RETURN WAS FILED IN TIME AND NOT HELD INVALID AND FURTHERMORE, THE INCOME DE CLARED IN REVISED RETURN HAS BEEN ACCEPTED WITH NO FURTHER ADDIITON, THE ALL EGATION OF CONCEALMENT OF INCOME BY FALLING BACK UPON THE PROCEEDING BEFORE A DIT TO INFER CONCEALMENT OF INCOME IN ASSESSMENT PROCEEEDINGS IS NOT JUSTIFIED. HERE IT IS IMPORTANT TO VISIT THE PROVISIONS OF SEC.271(1)(C) OF THE ACT WHICH FOR THE SAKE OF CONVENEICNE ARE REPRODUCED BELOW. 271. (1) IF THE [ASSESSING] OFFICER OR THE [***] [COMMI SSIONER (APPEALS)] [OR THE [PRINCIPAL COMMISSIONER OR] [COM MISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISF IED THAT ANY PERSON- (A) [***] (B) HAS [***] FAILED TO COMPLY WITH A NOTICE [UNDER SUB-SECTION (2) OF SECTION 115WD OR UNDER SUB-SECTION(2) OF SECTION 11 5WE OR] UNDER SUB-SECTION (1) OF SECTION 142 OR SUB-SECTION (2) O F SECTION 143 [OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB-SECTION (2A) OF SECTION 142], OR (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR [***] FURNISHED INACCURATE PARTICULARS OF [SUCH INCOME, OR] 11. NOW THE EXPRESSION IN THE COURSE OF ANY PROCEE DINGS UNDER THIS ACT HAS DIFFERENT MEANINGS IN SUB-CLAUSE A, B & C OF SE C.271(1). SUB-CLAUSE A HAS BEEN OMITTED W.E.F. 1.4.1989. IN CLAUSE B THE MENAING OF ANY PROCEEDINGS IS FAILURE TO COMPLY WITH VARIOUS NOTIC ES. IN CLAUSE C THE ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 9 MEANING OF ANY PROCEEDINGS IS WITH REFERENCE TO CON CEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULRAS OF INCOME IN T HE RETURN OF INCOME. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS 335 ITR 0259 HAS HELD THAT IN THE COURSE OF SURVEY PROCEEDINGS UNDER THE ACT CANNOT HAVE THE REFERENC E TO SURVEY PROCEEDINGS AND HAS FURTHER HELD THAT CONCEALMENT OF PARTICULAR S OF INCOME HAS TO BE IN THE INCOME TAX RETURN. THE RELEVANT FINDINGS OF THE HONBLE DELHI HIGH COURT ARE REPRODUCED BELOW. IT IS TO BE KEPT IN MIND THAT S. 271(L)(C) IS A PE NAL PROVISION AND SUCH A PROVISION HAS TO BE STRICTLY CONSTRUED. UNLESS THE CASE FALLS WITHIN THE FOUR CORNERS OF THE SAID PROVISION, PENALTY CANNOT BE IM POSED. SUB-S. (1) OF S. 271 STIPULATES CERTAIN CONTINGENCIES ON THE HAPPENING W HEREOF THE AO OR THE CIT(A) MAY DIRECT PAYMENT OF PENALTY BY THE ASSESSEE. SEC. 271(L)(C) AUTHORIZES IMPOSITION OF PENALTY WHEN THE AO IS SATISFIED THAI THE ASSESSEE HAS EITHER : (A) CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS NOT THE CASE OF F URNISHING INACCURATE PARTICULARS OF INCOME, AS IN THE IT RETURN, PARTICU LARS OF INCOME HAVE BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE IT RETURN. THE QUESTION IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. IT WOULD DEPEND UPON THE ISSUE AS TO WHETHER THIS CONCEALMENT HAS REFERENCE TO THE IT RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FOUND IN THE IT RETURN. THE WO RDS 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' ARE PREFACED BY THE SAT ISFACTION OF THE AO OR THE CIT(A). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TE AM, THE QUESTION OF SATISFACTION OF AO OR IHE CIT(A) OR THE CIT DOES NO T ARISE. ONE HAS TO KEEP IN MIND THAT IT IS THE AO WHO INITIATED THE PENALTY PR OCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFA CTION DURING THE COURSE OF SURVEY. DECISION TO INITIATE PENALTY PROCEEDINGS WA S TAKEN WHILE MAKING ASSESSMENT ORDER. IT IS, THUS, OBVIOUS THAT THE EXP RESSION 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' CANNOT HAVE THE REFEREN CE TO SURVEY PROCEEDINGS IN THIS CASE. IT NECESSARILY FOLLOWS THAT CONCLEAMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY TH E ASSESSEE HAS TO BE IN THE IT RETURN FILED BY IT. THE ASSESSEE CAN FURNISH-THE -PARTTCUFARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE IT RETU RN FILED BY THE ASSESSEE. ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 10 THIS VIEW GETS SUPPORTED BY EXPLNS. 4 AS WELL AS 5 AND 5A OF S. 271. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CON DITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIE D. SINCE THE ASSESSES WAS EXPOSED DURING SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INC OME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES, AND POSSIBILITIES. SEC. 271( L)(C) HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON- DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CA NNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON-DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE IT RETURN AND OFFERED THE SURREND ERED AMOUNT FOR THE PURPOSES OF TAX. CIT VS. MOHAN DASS HASSA NAND(198 3) 34 CTR (DEL) 361 1983): (1983) 141 203 (DEL) AND CIT VS. RELIANCE PE TROPRODUCTS (P) LTD. (2010) CTR (SC) 320 : (2010) 36 DTR (SC) 449: (2010 ) 3 SCR 510 RELIED ON. 13. IN THE PRESENT CASE THERE IS NO DISPUTE ABOUT T HE FACT THAT ASSESSEE HAD DISCLOSED THE INVESTMENT IN INSURANCE POLICES I N THE REVISED RETURN OF INCOME WHICH WAS NOT HELD TO BE INVALID. THE ASSESS ING OFFICER COMPLETED THE ASSESSMENT ON THE BASIS OF REVISED RETURN AND A CCEPTED THE INCOME DECLARED IN REVISED RETURN AND THEREFORE, THERE WAS NO CONCEALMENT OF INCOME IN THE REVISED RETURN OF INCOME. 14. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AN D IN VIEW OF THE JUDICIAL PRECEDENTS, WE ACCEPT THE GROUNDS OF APPEA L OF THE ASSESSEE AND DELETE THE PENALTY IMPOSED BY LEARNED CIT(A). 15. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 .09.2016. SD/- SD/- (A.D. JAIN) ( T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 15.09.2016. /PK/ PS. ITA NO.542 (ASR)/2015 ASST. YEAR : 2010-11 11 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER