Ajay Jain, New Delhi V. ACIT, New Delhi

ITA 918/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65593 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C B SINGH
• Keywords: Search and seizure
• Section: 133(6); 27; 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI HARI OM MARATHA, JM & SHRI A.N. PAHUJA, AM ITA NO.918/DEL/2012 ASSESSMENT YEAR:2007-08 AJAY JAIN ,PROP. HI TECH INDUSTRIES, 38/22/2,VILLAGE RANHOLA,NANGLOI-NAJAFGARH ROAD,NEW DELHI V/S . A.C.I.T.,CIRCLE 25(1), NEW DELHI [PAN : ACLPJ 9646 C] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI RAJ KUMAR GUPTA, AR REVENUE BY SHRI C.B. SINGH, DR DATE OF HEARING 28-08-2012 DATE OF PRONOUNCEMENT 01-10-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 24.02.2012 BY THE ASSESSEE AG AINST AN ORDER DATED 13 TH FEBRUARY, 2012 OF THE LD. CIT(A)-XXIV, NEW DELHI, RAISES THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE LOW ER AUTHORITIES ` ERRED IN LAW AND ON MERITS IN LEVYING AND SUSTAININ G PENALTY OF ` ` 48,413/-/` ` 45,073/- U/S 271(1)(C) OF THE I.T ACT. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING INCOME OF ` 7,22,300/- FOR THE AY 2007-08 FILED ON 22.10.2007 B Y THE ASSESSEE, ENGAGED IN THE BUSINESS OF MANUFACTURING AND WHOLES ALE TRADING OF HYDRAULIC, MECHANICAL PRESSES, MACHINES AND HYDROCLAVE MACHINE S BESIDES TRADING IN IRON AND STEEL IN THE NAME OF HI-TECH INDUSTRIES, WAS SE LECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) . DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING ITA NO.918/DEL./2012 2 OFFICER[AO IN SHORT] AFTER OBTAINING DETAILS OF CRE DITORS, ISSUED NOTICE U/S 133(6) OF THE ACT TO M/S N.K. JAIN & COMPANY AND M/S GTM SAL ES CORPORATION. IN THE LIGHT OF DETAILS REFLECTED IN THE COPY OF ACCOUNT OF THE ASSESSEE RECEIVED FROM THE SAID PARTIES VIS--VIS BOOKS OF THE ACCOUNT OF THE ASSESSEE, THE AO NOTICED THE FOLLOWING DIFFERENCES:- AS PER HI-TECH AS PER N.K. JAIN DIFFERENCE ` `1,00,000/- NIL ` ` 1,00,000/- AS PER HI-TECH AS PER GTM DIFFERENCE ` ` 2,99,715/- ` ` 2,52,395/- ` `47,320/- 2.1 TO A QUERY BY THE AO, THE ASSESSEE REPLIED AS UNDER:- IN N.K. JAIN & CO. ` ` 1 LAC IS THE OPENING AS WELL AS CLOSING BALANCE OF THIS CREDITOR WHICH IS COMING FROM EARLIER YEARS . IN GTM SALES CORPORATION, THERE REMAINS A DIFFERENCE OF `47,320/ - AFTER RECONCILIATION. THESE CREDITORS AND DIFFERENCE IS FULLY EXPLAINABLE. HOWEVER, DUE TO PAUCITY OF TIME AND THE MATTER BECO MING TIME BARRED, THEREFORE, TO PURCHASE PEACE OF MIND AND TO BRING AN END TO THE ISSUE, THESE 2 AMOUNTS MAY BE ADDED AS INCOME. 2.2 ACCORDINGLY, IN TERMS OF THE AFORESAID SURREND ER OF THE AMOUNT, THE AO ADDED THE AMOUNT OF ` ` 1,47,320/- AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 3. SUBSEQUENTLY, IN RESPONSE TO A SHOW CAUSE NOTIC E ISSUED BEFORE LEVY OF PENALTY, THE ASSESSEE WHILE RELYING UPON DE CISIONS IN THE CASE OF MS. MADHUSHREE GUPTA VS. UOI 225 CTR (DEL) 1; PADMA RAM BHAROLI VS. CIT, 110 ITR 54 (GAUHATI); JAIN BROS. VS. CIT,77 ITR 107(SC) & CIT VS. CHETAN DASS LACHMAN DASS (1995), 214 ITR 726,SUBMITTED THAT THE AMOUNT OF ` `1 LAC IN THE ACCOUNT OF M/S N.K. JAIN AND COMPANY WAS OPENING AS WELL AS CLOSING BALANCE OF CREDITOR, WHICH WAS COMING FROM EARLIER YEARS. I N GTM SALES CORPORATION, ITA NO.918/DEL./2012 3 DIFFERENCE OF ` `47,320/- REMAINED AFTER RECONCILIATION. DUE TO PA UCITY OF TIME AND THE MATTER BECOMING TIME BARRED, THE ASSESSEE SURRE NDERED THE AMOUNT TO PURCHASE PEACE OF MIND. HOWEVER, THIS SURRENDER WA S MADE SUBJECT TO NO PENALTY. IN THESE CIRCUMSTANCES, THE LD.AR PLEADED THAT THERE WAS NO CONCEALMENT. HOWEVER, THE AO DID NOT ACCEPT THE SU BMISSIONS OF THE ASSESSEE ON THE GROUND THAT AFORESAID SUBMISSIONS OF THE ASS ESSEE WERE DEVOID OF ANY MERIT. ACCORDINGLY, WHILE RELYING UPON EXPLANATIO N 1 TO SEC. 271(1)(C) OF THE ACT, THE AO IMPOSED A PENALTY OF ` ` 48,413/- @100% TAX SOUGHT TO BE EVADED ON THE AFORESAID AMOUNT OF ` ` 1,47,320/-. 4. ON APPEAL, THE LD. CIT(A) UPHELD THE LEVY OF PE NALTY AS UNDER:- 4.2 AS REGARDS GROUND NOS. 2 & 3, THE ISSUE OF RE CORDING OF SATISFACTION OF CONCEALMENT IN THE ASSESSMENT OR DER AS WELL AS THE ISSUE THAT THE PENALTY ORDER IS WITHOUT JURISDI CTION, HAVE, BEEN ADEQUATELY DEALT WITH BY THE ASSESSING OFFICER IN T HE BODY OF PENALTY ORDER ITSELF. I HAVE CAREFULLY CONSIDERED T HE CONTENTIONS MADE BY THE APPELLANT AS WELL AS THE PENALTY ORDER PASSED BY THE AO. IT IS ABSOLUTELY CLEAR FROM THE PENALTY ORDER T HAT THE APPELLANT SURRENDERED THE AMOUNTS STANDING IN THE NAME OF TWO CREDITORS ONLY AFTER DETECTION OF CONCEALMENT BY THE, ASSESSING OF FICER AS THERE WERE DISCREPANCIES IN THE BALANCES MENTIONED BY THE APPELLANT AND BY THE CREDITORS. PUTTING CONDITIONS ON SUCH SU RRENDERS AFTER ONE HAS BEEN FOUND OUT, HAS NO MEANING WHATSOEVER. I AGREE WITH THE STAND TAKEN BY THE AO IN THE PENALTY ORDER AND THEREFORE, GROUND NOS. 2 & 3 STAND DISMISSED. 4.3 AS REGARDS GROUND NO.4, IT IS SEEN THAT NOTICE U/S. 274 R.W.S. 271 WAS ISSUED ON 30.12.2009, TO WHICH A REPLY WAS, GIVEN BY THE APPELLANT ON 06.01.2010. ANOTHER NOTICE U/S. 274 R. W.S. 271 WAS ISSUED TO THE APPELLANT ON 02.06.2010, WHICH WAS RE PLIED BY HIM ON 11.06.2010. THEREFORE, IT WOULD NOT BE PROPER TO SA Y THAT REASONABLE OPPORTUNITIES WERE NOT PROVIDED TO THE A PPELLANT BEFORE PASSING THE IMPUGNED ORDER OF PENALTY. THE GROUND T AKEN BY THE APPELLANT IS THEREFORE DISMISSED. 4.4 IN GROUND NOS. 5 & 6, THE APPELLANT HAS IMPUGNE D THE PENALTY ON MERITS AND HAS SUBMITTED THAT IN VIEW OF LETTERS DT. 06.01.2010 AND 11.06.2010, NO PENALTY SHOULD HAVE BEEN LEVIED. I HAVE PERUSED THE PENALTY ORDER AS WELL AS THE JUSTIFICAT ION GIVEN BY THE APPELLANT. REGARDING CREDITOR SH. N.K. JAIN, THE OP ENING AND ITA NO.918/DEL./2012 4 CLOSING BALANCE AS PER BOOKS OF ACCOUNTS OF THE APP ELLANT IS ` . L LAC. HOWEVER, AS PER INFORMATION CALLED FROM SHE N.K. JA IN BY THE AO U/S. 133(6) OF THE ACT, THE CLOSING BALANCE IS NIL. THE APPELLANT SUBMITTED THAT IT IS AN OLD RECONCILIATION WHICH WA S PENDING ON THE PART OF THE APPELLANT IN THIS CASE AND THE APPELLAN T STILL ADMITS HIS LIABILITY WHICH HAS NOT BEEN WRITTEN OFF IN HIS BOO KS. AS REGARDS THE CLOSING BALANCE OF THE CREDITOR M/S. GTM SALES CORP ORATION, IT WAS ` .2,99;715/-AS PER THE BOOKS OF ACCOUNTS OF THE APPE LLANT, WHILE AS PER INFORMATION RECEIVED BY THE AO U/S. 133(6) OF T HE ACT, IT WAS ` .2,52,395/-. THUS THERE WAS A DIFFERENCE OF ` .47,320/-. THE APPELLANT SUBMITTED THAT WITHOUT ADMITTING ANY, CON CEALMENT OR FURNISHING OF INACCURATE PARTICULAR OF INCOME, HE H AD OFFERED THIS AMOUNT FOR TAXATION TO PURCHASE PEACE OF MIND AND T O CLOSE THE ASSESSMENT PROCEEDINGS. THE APPELLANT HAS RELIED ON THE FOLLOWING CASE LAWS : (A) ADDL. CIT VS. PREM CHAND GARG 123 TTJ (DEL) (T M) 433 (B) SMT. SANDHYA VERMA (2009) 30 SOT 29 (DEL) (URO ) (C) CIT VS. HARSH TALWAR 335 ITR 200 (DEL) (D) CIT VS. ASHOKTAKER 170 TAXMAN 471 (DEL) (E) SIR SHADILAL SUGAR & GENERAL MILLS LTD. 168 IT R 705 IN MY OPINION, NONE OF THESE ABOVE REFERRED CASES I S OF ANY SUPPORT TO THE APPELLANT FOR TWO REASONS: (A) THE APPELLANT DID NOT HAVE ANY EVIDENCE OR COR ROBORATING PROOF TO EXPLAIN THE DISCREPANCIES IN HIS BOOKS OF ACCOUNTS WITH REGARDS TO THESE TWO CREDITORS AND (B) THE AO WAS IN POSSESSION OF INDEPENDENT MATERIA L GATHERED BY HIM U/S. 133(6) OF THE ACT WHICH CONCLUSIVELY PROVE D CONCEALMENT AND FILING OF INACCURATE PARTICULARS BY THE APPELLA NT. WHEN THE APPELLANT FOUND HIMSELF TOTALLY CORNERED B Y THE AO, HE INDULGED IN MISPLACED MAGNANIMITY AND SURRENDERED T HE AMOUNT WITH THE CONDITION OF NO PENALTY. UNFORTUNATELY, TH E BENEVOLENT ACTION OF THE APPELLANT WAS TOO LATE. ITA NO.918/DEL./2012 5 IN MY OPINION, THE CASE OF THE APPELLANT IS CLEARLY COVERED BY THE JUDGMENTS PRONOUNCED BY HON'BLE SUPREME COURT OF IN DIA IN THE CASES OF DILIP N SHROFF VS. JOINT CIT (2007) 291 ITR 519 (SC) AND UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS ( 2008) 306 ITR 277 (SC). THEREFORE, THESE TWO GROUNDS OF APPEAL TA KEN BY THE APPELLANT ARE DISMISSED. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE WHILE CARRYING US THROUGH THE IMPUGNED ORDER CONTENDED THAT THE AMOUN T OF ` ` 1 LAC WAS OFFERED TO TAX AS INCOME IN TERMS OF PROVISIONS OF SECTION 41( 1) OF THE ACT IN THE AY 2009- 2010. WHILE REITERATING THE DECISIONS RELIED UPON BEFORE THE LD. CIT(A), THE LD. AR CONTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY. TO A QUERY BY THE BENCH, AS TO WHEN THE CREDIT IN THE A/C OF M/S NK JAIN & COMPANY ORIGINATED , THE LD. AR COLD NOT FUR NISH THE EXACT DATE OF CREDIT OR EVEN NATURE OF CREDIT .ON THE OTHER HAND, THE LD. D R SUPPORTED THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. ADMITTEDLY, THE ASSESSEE DID NOT RECONCILE THE ACC OUNTS OF THE YEAR UNDER CONSIDERATION IN THE LIGHT OF INFORMATI ON RECEIVED U/S 133(6) OF THE ACT IN THE FORM OF COPY OF ACCOUNT OF THE ASSESSEE FROM THE SAID PARTIES M/S NK JAIN & CO. AND GTM SALES CORPOR ATION VIS--VIS ASSESSEES BOOKS AND ACCORDINGLY, VIDE HIS LETTER DATED 7.12.2009 SURRENDERED THE TWO AMOUNTS AS INCOME OF THE YEAR UNDER CONSID ERATION TO PURCHASE PEACE OF MIND. SUBSEQUENTLY, IN RESPONSE TO A SHOWCAUSE N OTICE BEFORE LEVY OF PENALTY, THE ASSESSEE REITERATED THAT AMOUNT OF ` 1 LAC IN THE A/C OF NK JAIN & CO/WAS BROUGHT FORWARD WHILE DIFFERENCE IN THE A/C OF GTM SALES CORPORATION REMAINED IRRECONCILED.. APPARENTLY, THE ASSESSEE DID NOT IMP ROVE UPON HIS CASE IN THE PENALTY PROCEEDINGS. IN ANY CASE, THE AO DID NOT AC CEPT THE SUBMISSIONS OF THE ASSESSEE AND IMPOSED A PENALTY OF ` 48,413/- U/S 271(1)(C) OF THE ACT. THE ASSESSEE CLAIMED THAT PENALTY IMPOSABLE WORKED OUT TO BE ` 45,073/-.. ADMITTEDLY, THE ASSESSEE DID NOT RECONCILE THE DIF FERENCE EITHER AT ITA NO.918/DEL./2012 6 THE ASSESSMENT STAGE OR EVEN IN PENALTY PROCEEDINGS . EVEN BEFORE US, NO ATTEMPT WAS MADE TO RECONCILE THE DIFFERENCE NOR EVEN ANY MATERIAL, ESTABLISHING BONAFIDE OF THE EXPLANATION OF THE ASSESSEE, HAS BEEN PLACED BEFORE US. BEFORE PROCEEDING FURTHE R, WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SECTION 271(1) (C) OF THE ACT, WHICH READ AS UNDER: 271.FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICE S, CONCEALMENT OF INCOME, ETC. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (A PPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON- .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY,- (III) IN THE CASES REFERRED TO IN CLAUSE (C) , IN ADDITION TO ANY TAX PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOU GHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE DEPUTY COMMISSIONER (APPEALS) OR THE COMMISSIONER ( APPEALS) TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 6.1 AS IS EVIDENT FROM THE AFORESAID CL. (C) OF S. 271(1) OF THE ACT, THE WORDS USED ARE 'HAS CONCEALED THE PARTICUL ARS OF HIS ITA NO.918/DEL./2012 7 INCOME' OR FURNISHED 'INACCURATE PARTICULARS OF SUC H INCOME'. THUS, BOTH IN CASE OF CONCEALMENT AND INACCURACY, THE PHR ASE 'PARTICULARS OF INCOME' HAS BEEN USED. THE LEGISLATURE HAS NOT U SED THE WORDS 'CONCEALED HIS INCOME'. FROM THIS IT WOULD BE APPAR ENT THAT PENAL PROVISION WOULD OPERATE WHEN THERE IS A FAILURE TO DISCLOSE FULLY OR TRULY ALL THE PARTICULARS. THE WORDS 'PARTICULARS O F INCOME' REFER TO THE FACTS WHICH LEAD TO THE CORRECT COMPUTATION OF INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. SO WHEN ANY FACT MATERIAL TO THE DETERMINATION OF AN ITEM AS INCOME OR MATERIAL TO THE CORRECT COMPUTATION IS NOT FILED OR THAT WHICH IS F ILED IS NOT ACCURATE, THEN THE ASSESSEE WOULD BE LIABLE TO PENALTY UNDER S. 271(1)(C) OF THE ACT. THE EXPRESSION 'HAS CONCEALED THE PARTICUL ARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME ' HAVE NOT BEEN DEFINED EITHER IN SECTION 271 OR ELSEWHERE IN THE A CT. HOWEVER, NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTA NCES, IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY, KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM THE RETURN . ACCORDING TO LAW LEXICON, THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS C ON+CELARE WHICH IMPLIES TO HIDE. IT MEANS 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.' IN WEBSTER'S DICTIONARY, 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' 6.2 IF THE DISCLOSURE OF FACTS IS INCORRECT OR FALSE TO THE KNOWLEDGE OF THE ASSESSEE AND IT IS ESTABLISHED, THEN SUCH DI SCLOSURE CANNOT TAKE IT OUT FROM THE PURVIEW OF THE ACT OF CONCEALM ENT OF PARTICULARS OR FURNISHING INACCURATE PARTICULARS THEREOF FOR TH E PURPOSE OF LEVY OF PENALTY. THE PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH IS ACT THAT ANY ITA NO.918/DEL./2012 8 PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THIS CONT EXT, HONBLE GUJRAT HIGH COURT IN THE CASE OF AM SHAH & CO. VS. CIT,238 ITR 415(GUJ) OBSERVED THAT THERE CANNOT BE A STRAIGHT JACKET FORMULA FOR DET ECTION OF THESE DEFAULTS OF CONCEALMENT OR OF FURNISHING INACCURATE PARTICULARS OF INCOME AND INDEED CONCEALMENT OF PARTICULARS OF INC OME AND INACCURATE PARTICULARS OF INCOME MAY AT TIMES OVERL AP, AS FOR EXAMPLE WHEN HALF OF THE INCOME UNDER A PARTICULAR HEAD IS NOT AT ALL DISCLOSED, THAT WOULD BE CONCEALED TO THAT EXTENT W HILE THE REMAINING HALF WHICH IS IN FACT DISCLOSED WOULD, NO T BEING HIS COMPLETE DISCLOSURE AMOUNT TO INACCURATE PARTICULAR S OF INCOME AS REGARDS THAT CONSTITUENT ITEM OF THE RETURN. BY THE VERY NATURE OF THE ASSESSMENT PROCEEDINGS THE ITO WHILE ASCERTAINING T HE TOTAL INCOME CHARGEABLE TO TAX WOULD BE IN A POSITION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCOME CONCEALED OR OF WHIC H FALSE PARTICULARS ARE FURNISHED. WHERE IN THE CONSTITUENTS OF INCOME RETURNED, SUCH SPECIFIC OR DEFINITE PARTICULARS OF INCOME ARE DETE CTED AS CONCEALED, THEN EVEN IN THE TOTAL INCOME FIGURE TO THAT EXTENT THEY REFLECT, IT WOULD AMOUNT TO CONCEALMENT TO THAT EXTENT. IN THE SAME WAY WHERE SPECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DET ECTED AS INACCURATE, THEN SUCH FIGURE WILL ALSO MAKE THE TOT AL INCOME INACCURATE IN PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. WHETHER IT BE A CASE OF ONLY CONCEALMENT OR OF ONLY INACCURACY OR BOTH, THE PARTICULARS OF INCOME SO VI TIATED WOULD BE SPECIFIC AND DEFINITE AND BE KNOWN IN THE ASSESSMEN T PROCEEDINGS BY THE ITO, WHO ON BEING SATISFIED ABOUT EACH CONCE ALMENT OR INACCURACY OF PARTICULARS OF INCOME WOULD BE IN A P OSITION TO INITIATE THE PENALTY PROCEEDINGS ON ONE OR BOTH OF THE GROUN DS OF DEFAULT AS MAY HAVE BEEN SPECIFICALLY AND DIRECTLY DETECTED. T HE OPPORTUNITY OF HEARING GIVEN BY THE NOTICE UNDER SECTION 271(1)(C) , OBVIOUSLY IS AGAINST SUCH CONCEALMENT AND INACCURACY AS IS DETEC TED IN THE ASSESSMENT PROCEEDINGS. 6.3. INDISPUTABLY, AS A RESULT OF ENQUIRIES MADE BY THE AO, THE ASSESSEE DID NOT RECONCILE THE DIFFERENCE IN THE ACCOUNT OF AFORESAID TWO PARTIES AND INSTEAD SURRENDERED THE A MOUNT AS INCOME OF THE YEAR UNDER CONSIDERATION. IN THE COURSE OF P ENALTY PROCEEDINGS , THE ASSESSEE DID NOT BRING ANY MATERI AL BEFORE THE AO TO REBUT THE INFERENCES DRAWN BY THE AO IN THE COUR SE OF ASSESSMENT PROCEEDINGS. IN TERMS OF PROVISIONS OF SEC. 271(1) (C) OF THE ACT READ ITA NO.918/DEL./2012 9 WITH EXPLANATION 1 THERETO AND THE JUDICIAL PRONOUN CEMENTS IN THE CASE OF B.A. BALASUBRAMANIAM & BROS. CO. V. CIT [1 999] 157 CTR 556(SC), CIT V. B.A. BALASUBRAMANIAM & BROS. [1984] 40 CTR (MAD.)/[1985] 152 ITR 529 (MAD.) , CIT V. MUSSADILA L RAM BHAROSE [1987] 60 CTR (SC) 34/[ 1987] 165 ITR 14 (SC); TC 5 0 R. 474; CIT V. K.R. SADAYAPPAN [1990] 86 CTR (SC) 120; [1990] 1 85 ITR 49 (SC); TC 50 R. 795, ADDL. CIT V. JEEVAN LAL SAH [19 94] 117 CTR (SC) 130; [1994] 205 ITR 244 (SC); TC 50 R. 973 AN D K.P.MADHUSUDANAN VS. CIT,251 ITR 99(SC), IT IS WELL ESTABLISHED THAT WHENEVER THERE IS DIFFERENCE BETWEEN THE RETUR NED AND ASSESSED INCOME, THERE IS INFERENCE OF CONCEALMENT. THE EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT RAISES A PRESUMPTION THAT CAN BE REBUTTED BY THE ASSESSEE WITH REFERENCE TO F ACTS OF THE CASE. THUS, THE ONUS IS ON THE ASSESSEE TO REBUT THE INFE RENCE OF CONCEALMENT. THE ABSENCE OF EXPLANATION ITSELF WOUL D ATTRACT PENALTY. IN THE CASE OF NEW BIJLI FOUNDRY VS. CIT,1 35 ITR 593, HONBLE PUNJAB AND HARYANA HIGH COURT HAVE HELD THA T THE FINDINGS RECORDED IN THE ASSESSMENT PROCEEDINGS ARE CERTAINL Y RELEVANT IN THE PENALTY PROCEEDINGS. IN THE ABSENCE OF ANY FRESH MA TERIAL DURING THE COURSE OF PENALTY PROCEEDINGS, SPECIALLY WHEN THE A SSESSEE FAILED TO ESTABLISH THAT THE AFORESAID FINDINGS OF THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE BASED ON IMPROPER FA CTS OR WRONG APPRECIATION OF THE FACTS, WE ARE AFRAID THAT IN TH E PENALTY PROCEEDINGS WE ARE UNABLE TO TAKE A DIFFERENT VIEW. THE ONUS LAID DOWN UPON THE ASSESSEE TO REBUT THE PRESUMPTION RAI SED UNDER EXPLANATION 1 WOULD NOT BE DISCHARGED BY ANY FANTAS TIC OR FANCIFUL EXPLANATION. IT IS NOT THE LAW THAT ANY AND EVERY E XPLANATION HAS TO BE ACCEPTED. IN OUR CONSIDERED VIEW, THE PROVISI ONS OF CLAUSE (B) OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT, ARE CLEARLY ATTRACTED AND THE ASSESSEE MISERABLY FAILED TO DIS CHARGE THE ONUS ITA NO.918/DEL./2012 10 LAID DOWN IN THIS EXPLANATION. IN SUCH CIRCUMSTANCE S, WE HAVE NO HESITATION IN UPHOLDING THE LEVY OF PENALTY. 6.4 WE FIND THAT THE LEGAL POSITION IS SQUARELY COVERED BY THE DECISION OF THE HONBLE APEX COURT IN K.P. MADHUSUD ANAN V. CIT [2001] 251 ITR 99,WHEREIN, THE HONBLE COURT AFFIRM ED THE DECISION OF THE KERALA HIGH COURT IN CIT V. K.P. MADHUSUDANA N [2000] 246 ITR 218. CONSIDERING THE EFFECT OF THE ADDITION OF THE EXPLANATION TO SECTION 271(1) OF THE ACT AND THE AMENDMENT TO SECT ION 271(1)(C) OF THE ACT BY DELETION OF THE WORD 'DELIBERATELY', THE HONBLE KERALA HIGH COURT CAME TO THE CONCLUSION THAT PENALTY WAS LIABLE TO BE IMPOSED IN A CASE WHERE THE ASSESSEE COULD OFFER NO ACCEPTABLE EXPLANATION FOR THE INCOME NOT DISCLOSED OR THE INA CCURATE PARTICULARS HE HAD FURNISHED IN HIS RETURN, HAD TO BE EXAMINED AND IF FOUND UNACCEPTABLE, PENALTY WAS LIABLE TO BE IMPOSE D. THE HONBLE KERALA HIGH COURT OBSERVED AS FOLLOWS: 'SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, IS ATTRACTED WHERE, IN THE COURSE OF ANY PROCEEDINGS UNDER THE A CT, THE ASSESSING OFFICER OR THE FIRST APPELLATE AUTHORITY IS SATISFIED THAT: (A) ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) HAS FURNISHED INACCURATE PARTICULARS OF SUCH IN COME. THE EXPRESSIONS 'HAS CONCEALED' AND 'HAS FURNISHED INAC CURATE PARTICULARS' HAVE NOT BEEN DEFINED EITHER IN THE SE CTION OR ELSEWHERE IN THE ACT. HOWEVER, NOTWITHSTANDING DIFF ERENCES IN THE TWO CIRCUMSTANCES, THEY LEAD TO THE SAME EFFECT , VIZ., KEEPING OFF A CERTAIN PORTION OF INCOME. THE FORMER IS DIRECT WHILE THE LATTER MAY BE INDIRECT IN ITS EXECUTION. A CONSPECTUS OF THE EXPLANATION ADDED BY THE FINANC E ACT, 1964, AND THE SUBSEQUENT SUBSTITUTED EXPLANATIONS M AKES IT CLEAR THAT THE STATUTE VISUALIZED THE ASSESSMENT PR OCEEDINGS AND PENALTY PROCEEDINGS TO BE WHOLLY DISTINCT AND INDEP ENDENT OF EACH OTHER. IN ESSENCE, THE EXPLANATION (BOTH AFTER 1964 AND 1976) IS A RULE OF EVIDENCE. PRESUMPTIONS WHICH ARE REBUTTABLE IN NATURE ARE AVAILABLE TO BE DRAWN. THE INITIAL BU RDEN OF DISCHARGING THE ONUS OF REBUTTAL IS ON THE ASSESSEE . EXPLANATION 1 AUTOMATICALLY COMES INTO OPERATION WHEN, IN RESPE CT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME O F ANY PERSON, THERE IS FAILURE TO OFFER AN EXPLANATION OR AN EXPL ANATION IS OFFERED WHICH IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR THE ITA NO.918/DEL./2012 11 FIRST APPELLATE AUTHORITY, OR AN EXPLANATION IS OFF ERED WHICH IS NOT SUBSTANTIATED. IN SUCH A CASE, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME IS DEEMED TO REPRESENT T HE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. A S PER THE PROVISION OF EXPLANATION 1, THE ONUS TO ESTABLISH T HAT THE EXPLANATION OFFERED WAS BONA FIDE AND ALL FACTS REL ATING 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 ASSESSING OFFICER IS NOT OBLIGED T O INTIMATE THE ASSESSEE THAT EXPLANATION 1 TO SECTION 271(1)(C ) IS PROPOSED TO BE APPLIED. THE SCHEME OF THE PROVISIONS DOES NO T PROVIDE FOR SUCH A REQUIREMENT EITHER DIRECTLY OR INFERENTIALLY . IN SIR SHADILAL'S CASE [1987] 168 ITR 705, WHAT THE SUPREM E COURT OBSERVED WAS THAT THERE MAY BE SEVERAL REASONS FOR WHICH THE ASSESSEE MAY HAVE OFFERED AN AMOUNT FOR ADDITION, B UT THAT ITSELF IS NOT SUFFICIENT TO INFER CONCEALMENT. IT HAS NOT LAID DOWN AS A RULE OF GENERAL APPLICATION THAT WHENEVER SUCH IS T HE CASE, PENALTY CANNOT BE IMPOSED. ON THE CONTRARY, IN SUCH CASES ALSO THE ASSESSEE IS REQUIRED TO DISCHARGE THE BURDEN PL ACED BY THE EXPLANATION APPENDED TO SECTION 271(1)(C). IN CASE AN EXPLANATION IS OFFERED, THE ASSESSING OFFICER IS TO EXAMINE IT AND FIND OUT WHETHER THE ASSESSEE HAS BEEN ABLE TO ESTA BLISH THAT THERE WAS NO CONCEALMENT. HELD, THAT, IN THE CASE AT HAND, NO EXPLANATION WOR TH THE NAME WAS OFFERED BY THE ASSESSEE. THE STATEMENT MADE BY THE ASSESSEE WAS TO THE EFFECT THAT HAND LOANS WERE OBT AINED WHICH WERE INTENDED TO BE REFUNDED IMMEDIATELY AND, THERE FORE, THE ENTRIES WERE NOT MADE, BUT, LATER ON, THE ARRANGEME NT DID NOT WORK OUT. THEREFORE, THE AMOUNT WAS OFFERED FOR TAX ATION. THERE WAS A CLEAR ADMISSION THAT THE ENTRIES WERE NOT MAD E ON THE RELEVANT DATES. IT WAS NOT A CASE WHERE ENTRIES WER E MADE ON THE RELEVANT DATES AND THE SOURCE OF MONEY WAS OMIT TED. THE ENTRIES ON THE CONTRARY WERE MADE ON DATES WHEN THE RE WAS SUFFICIENT CASH BALANCE. THE INTENTION TO HIDE THE ACTUAL STATE OF AFFAIRS WAS CLEAR. THE EXPLANATION OFFERED WAS FANC IFUL AND VAGUE. THE IMPOSITION OF PENALTY WAS VALID AND THE TRIBUNAL ERRED IN CANCELLING IT.' 6.5 HONBLE SUPREME COURT IN THE CASE OF K.P.MA DHUSUDANAN VS. CIT,251 ITR 99(SC) WHILE AFFIRMING THE AFORESAID VI EW HELD THAT WE FIND IT DIFFICULT TO ACCEPT AS CORRECT THE TWO JUDGMENTS AFOREMENTIONED. THE EXPLANATION TO SECTION 271(1)(C ) IS A PART OF SECTION 271. WHEN THE INCOME-TAX OFFICER OR THE APP ELLATE ASSISTANT COMMISSIONER ISSUES TO AN ASSESSEE A NOTI CE UNDER ITA NO.918/DEL./2012 12 SECTION 271, HE MAKES THE ASSESSEE AWARE THAT THE P ROVISIONS THEREOF ARE TO BE USED AGAINST HIM. THESE PROVISION S INCLUDE THE EXPLANATION. BY REASON OF THE EXPLANATION, WHERE TH E TOTAL INCOME RETURNED BY THE ASSESSEE IS LESS THAN 80 PER CENT. OF THE TOTAL INCOME ASSESSED UNDER SECTION 143 OR 144 OR 1 47, REDUCED TO THE EXTENT THEREIN PROVIDED, THE ASSESSEE IS DEE MED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS THEREOF, UNLESS HE PROVES THAT THE FAIL URE TO RETURN THE CORRECT INCOME DID NOT ARISE FROM ANY FRAUD OR NEGL ECT ON HIS PART. THE ASSESSEE IS, THEREFORE, BY VIRTUE OF THE NOTICE UNDER SECTION 271 PUT TO NOTICE THAT IF HE DOES NOT PROVE , IN THE CIRCUMSTANCES STATED IN THE EXPLANATION, THAT HIS F AILURE TO RETURN HIS CORRECT INCOME WAS NOT DUE TO FRAUD OR NEGLECT, HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS THEREOF AND, CONSE QUENTLY, BE LIABLE TO THE PENALTY PROVIDED BY THAT SECTION. NO EXPRESS INVOCATION OF THE EXPLANATION TO SECTION 271 IN THE NOTICE UNDER SECTION 271 IS, IN OUR VIEW, NECESSARY BEFORE THE P ROVISIONS OF THE EXPLANATION THEREIN ARE APPLIED. THE HIGH COURT AT BOMBAY WAS, THEREFORE, IN ERROR IN THE VIEW THAT IT TOOK A ND THE DIVISION BENCH IN THE IMPUGNED JUDGMENT WAS RIGHT. 6.6 THEREFORE, IN VIEW OF THE FACTS AND CIR CUMSTANCES AND IN THE LIGHT OF ABOVE NOTED AUTHORITATIVE PRONOUNCEMEN TS, WHEN THE ASSESSEE FAILED TO DISCHARGE THE ONUS LAID DOWN UPO N HIM IN TERMS OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AN D FAILED TO ESTABLISH THE BONAFIDE OF HIS EXPLANATION NOR EVEN ATTEMPTED TO RECONCILE THE DIFFERENCES IN THE AFORESAID TWO ACCO UNTS EVEN DURING THE PENALTY PROCEEDINGS , WE HAVE NO OPTION BUT TO UPHOLD THE FINDINGS OF THE LD. CIT(A), CONFIRMING THE LEVY OF PENALTY .EVEN OTHERWISE THE BREACH OF CIVIL OBLIGATION WHICH ATTR ACTS A PENALTY UNDER THE PROVISIONS OF AN ACT WOULD IMMEDIATELY AT TRACT THE LEVY OF PENALTY IRRESPECTIVE OF THE FACT WHETHER THE CONTRA VENTION WAS MADE BY THE DEFAULTER WITH ANY GUILTY INTENTION OR NOT, VIDE CHAIRMAN, SEBI V. SHRIRAM MUTUAL FUND [2006] 131 COMP CAS 591 (SC) ; [2006] 5 SCC 361. THIS VIEW HAS BEEN REITERATED BY THE HONBLE SUPREME COURT IN THEIR DECISION DATED 29.9.2008 IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILE PR OCESSORS AND ITA NO.918/DEL./2012 13 OTHERS, IN CIVIL APPEAL NOS.10289-10303 OF 2003. BL AMEWORTHINESS ATTACHED TO THE ASSESSEE WITH REFERENCE TO THE ORIG INAL RETURN CANNOT BE AVOIDED BY ACCEPTING THE ADDITION PROPOSED BY THE AO AFTER CONCEALMENT WAS DETECTED BY THE ASSESSING AUTHORITY. WHERE THE SURRENDER OF INC OME WAS NOT VOLUNTARY, BUT WAS AS A RESULT OF DETECTION BY THE ASSESSING AUTHO RITY, PENALTY CANNOT BE AVOIDED. THE VERY WORD 'OMISSION' CONNOTES AN INTEN TIONAL ACT. THE FACTUAL POSITION IS THE SURRENDER WAS A VEILED ATTEMPT TO P RESENT A MITIGATING CIRCUMSTANCE. THAT BEING THE POSITION, THE SURRENDE R OF CONCEALED INCOME DOES NOT CONSTITUTE A MITIGATING CIRCUMSTANCE AND PENALT Y HAS BEEN RIGHTLY LEVIED. THIS VIEW IS SUPPORTED BY DECISION IN PC JOSEPH & BROS.V S. CIT,158CR 104(KER) 6.7 IN THE INSTANT CASE, THE ASSESSEE CLAIMED B EFORE THE AO AND THE LD. CIT(A) THAT THE ADDITION OF ` 1,47,320/- WAS ACCEPTED IN ORDER TO PURCHASE PEACE OF MIND AND TO BRING AN END TO THE ISSUE. BUT THIS EXPLANA TION WAS TENDERED ONLY AFTER THE AO CONFRONTED THE EVIDENCE IN THE FORM OF COPIES OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE AFORESAID TWO PARTIES. .APPARENTLY , ONLY WHEN THE ASSESSEE WAS CORNERED , THE ASSESSEE SURRENDERED THE AMOUNT .WE ARE OF THE OPINION THAT THE SURRENDER WAS NOT AT ALL VOLUNTARY. HERE ,WE MAY HA VE A LOOK AT THE MEANING OF WORD VOLUNTARY. THE MEANING OF WORD VOLUNTARILY HAS BEEN DELIBERATED UPON BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SHRI RAKESH SURI REPORTED IN 2010-TIOL-357-HC-ALL-IT AS UNDER:- 41. A FULL BENCH OF THE ALLAHABAD HIGH COURT IN TH E CASE REPORTED IN (1998) 230 ITR 855:BHAIRAV LAL VERMA VERSUS UNION OF INDIA, WH ILE INTERPRETING THE WORD `VOLUNTARILY GIVEN IN SECTION 273(A) OF THE ACT HE LD THAT VOLUNTARILY MEANS OUT OF FREE WILL WITHOUT ANY COMPULSION. WHEN THE ASSESSEE CONCEALED THE INCRIMINATING MATERIAL WITH REGARD TO INCOME SO DIS CLOSED CANNOT BE HELD TO BE VOLUNTARILY. IT SHALL BE APPROPRIATE TO REPRODUCE T HE RELEVANT PORTION FROM THE JUDGMENT OF BHAIRAV LAL VERMA (SUPRA) AS UNDER: THE POSITION THUS SETTLED IS THAT THE WORD VOLUNTARILY IN SECTION 273A OF THE ACT MEANS OUT OF FREE WILL WITHOUT ANY COMPU LSION. DISCLOSURE OF CONCEALED INCOME AFTER THE DEPARTMENT HAS SEIZED TH E INCRIMINATING MATERIAL WITH REGARD TO THE INCOME SO DISCLOSED, CA NNOT BE VOLUNTARY DISCLOSURE, BECAUSE IT WAS MADE UNDER THE CONSTRAIN T OF EXPOSURE TO ADVERSE ITA NO.918/DEL./2012 14 ACTION BY THE DEPARTMENT. BUT IT CANNOT BE HELD AS A PRINCIPLE OF LAW THAT THE DISCLOSURE OF INCOME MADE AFTER THE SEARCH/RAID CAN NOT BE VOLUNTARY. IT IS A QUESTION WHICH HAS TO BE DECIDED BY THE DEPARTMENT IN EACH CASE ON THE BASIS OF THE MATERIAL ON THE RECORD. IF ON RECORD T HERE IS INCRIMINATING MATERIAL WITH REGARD TO THE DISCLOSED INCOME, THE D ISCLOSURE CANNOT BE VOLUNTARY. BUT IF THE DEPARTMENT HAS NO INCRIMINATI NG MATERIAL WITH REGARD TO THE INCOME DISCLOSED, THE DISCLOSURE IS LIABLE T O BE TREATED AS VOLUNTARY HAVING BEEN MADE WITHOUT ANY COMPULSION OR CONSTRAI NT OF EXPOSURE TO ADVERSE ACTION BY THE DEPARTMENT. IN A CASE WHERE T HE ASSESSEE HAS DISCLOSED NOT ONLY THE INCOME REGARDING WHICH THE D EPARTMENT HAS INCRIMINATING MATERIAL, BUT HAS ALSO DISCLOSED THE INCOME WITH REGARD TO WHICH NO INCRIMINATING MATERIAL WAS SEIZED BY THE D EPARTMENT, THE DISCLOSURE OF THE INCOME WITH REGARD TO WHICH THE D EPARTMENT HAS NO INCRIMINATING MATERIAL, IS LIABLE TO BE TREATED AS VOLUNTARY. FOR EXAMPLE, IF AN ASSESSEE IS HAVING FIVE ACCOUNTS AND THE DEPARTM ENT HAS INCRIMINATING MATERIAL WITH REGARD TO ONE OF THOSE ACCOUNTS ONLY, THE DISCLOSURE OF INCOME RELATING TO FOUR ACCOUNTS WITH REGARD TO WHICH THE DEPARTMENT HAS NO INCRIMINATING MATERIAL, IS VOLUNTARY, BECAUSE IT WA S MADE WITHOUT ANY CONSTRAINT OR COMPULSION, EVEN THOUGH THE DISCLOSUR E OF THE INCOME RELATING TO THE ACCOUNT REGARDING WHICH THE DEPARTMENT HAS I NCRIMINATING MATERIAL, IS LIABLE TO BE TREATED AS NON VOLUNTARY. 6.8 FROM THE SAID DECISION IT IS, THUS, CLEAR TH AT VOLUNTARILY MEANS OUT OF FREE WILL WITHOUT ANY COMPULSION. WHEN THE ASSESSEE CONCEALED INCRIMINATING MATERIAL IN THE FORM OF TRANSACTIONS IN THE AFORESAID ACCOUNT OF THE TWO PARTIES, SURRENDER CANNOT HELD TO BE VOLUNTARILY. SURRENDER OF INCOME AFTER THE DEPARTMENT HAS COLLECTED INCRIMINATING MATERIAL WITH REGARD TO THE INCOME SO DISCLOSED, CANNOT BE VOLUNTARY SURRENDER , BECAUSE IT WAS MADE UNDER THE CONSTRAINT OF EXPOSURE TO ADVERSE ACTION BY THE DEPARTMENT. IN THE PRESENT CA SE, THE DEPARTMENT HAS COLLECTED SUFFICIENT MATERIAL AGAINST THE ASSESSEE AND ONLY AFTER INCRIMINATING MATERIAL COLLECTED BY THE DEPARTMENT WAS BROUGHT TO THE KNOWLEDGE OF THE ASSESSEE, THE SURRENDER WAS, THUS, MADE BY THE ASSE SSEE UNDER THE CONSTRAINT OF EXPOSURE TO ADVERSE ACTION BY THE AO. WE TOTAL LY AGREE WITH THE CONCLUSION OF THE LD. CIT(A) THAT THE SURRENDER WAS MADE ONLY AFTER THE DETECTION OF CONCEALMENT BY THE AO AND THE ASSESSEE HAD NOTHING TO REBUT THE EVIDENCE GATHERED BY THE DEPARTMENT AND THE ASSESSEE MISERAB LY FAILED TO DISCHARGE THE ITA NO.918/DEL./2012 15 INITIAL ONUS LAID DOWN UPON THE ASSESSEE IN TERMS OF EXPLANATION 1 TO SEC. 271(1) (C) OF THE ACT. 7. AS REGARDS VIEW TAKEN IN DECISION IN SIR SHA DILAL SUGAR & GENERAL MILLS LTD. & ANOTHER (SUPRA) RELIED UPON BY THE LD. AR, HONBL E APEX COURT IN K.P.MADHUSUDANAN(SUPRA) DISCARDED THE SAID VIEW . A S POINTED OUT BY THE LD. CIT(A),FACTS IN THE DECISIONS RELIED UPON BY THE ASSESSEE BEFORE HIM, WERE ALTOGETHER DIFFERENT. THE LD. AR HAS NOT DEMON STRATED BEFORE US AS TO HOW THESE DECISIONS HELP THE CASE OF THE ASSESSEE.. EVE N OTHERWISE DECISION IN SIR SHADILAL SUGAR & GENERAL MILLS LTD. IS NO LONGER GO OD LAW AFTER THE INSERTION OF EXPLANATION AS HELD BY THE HONBLE SUPREME COURT I N THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99.. IN THE CAS E OF CIT V. C. ANANTHAN CHETTIAR [2005] 273 ITR 401, THE HONBLE MADRAS HI GH COURT WAS CONSIDERING A SIMILAR ISSUE & CONCLUDED AS UNDER: 'LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT THE ORDER OF THE TRIBUNAL IS NOT IN ACCORDANCE WITH LAW, AS IT HAS IGNORED THE EXPLANAT ION TO SECTION 271(1)(C) OF THE ACT. LEARNED COUNSEL ALSO PLACED RELIANCE ON THE DE CISION IN THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99 (SC), WHEREI N IT WAS HELD THAT THE LAW DECLARED BY THE COURT IN THE CASE OF SIR SHADILAL S UGAR & GENERAL MILLS LTD. V. CIT [1987] 168 ITR 705 (SC) WAS NO LONGER APPLICABL E BY REASON OF THE ADDITION OF THE EXPLANATION TO SECTION 271. THAT EXPLANATION CASTS A BURDEN ON THE ASSESSEE TO SHOW THAT THE ADDITIONAL INCOME THAT HA D NOT BEEN DISCLOSED WAS NOT DUE TO FRAUD OR NEGLECT. IN THIS CASE, THE ASSESSEE OFFERED NO EXPLANATION A T ALL EXCEPT TO ASSERT THAT HE DISCLOSED THE INCOME ONLY TO BUY PEACE WITH THE DEP ARTMENT AND WHAT WAS DISCLOSED, IN FACT, WAS ADDITIONAL INCOME. THE REAS ON FOR NOT HAVING DISCLOSED THE INCOME EARLIER WAS NOT STATED. IN THESE CIRCUMSTANC ES, THE ITAT WAS IN ERROR IN SETTING ASIDE THE PENALTY. THE QUESTION IS ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE, IN THE LIGHT OF THE LATER DEC ISION OF THE THREE JUDGE BENCH OF THE SUPREME COURT IN THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99.' 8 . HONBLE JURISDICTIONAL HIGH COURT IN JA SWANT RAI & ANOTHER VS. CBDT,133 ITR 19(DEL.) HELD THAT THE SUBSEQUENT ACT OF DISCLOSURE OF AN INCOME WOULD NOT MAKE ANY DIFFERENCE AND IT CANNOT BE SAID THAT THE ASSESSEE ITA NO.918/DEL./2012 16 HAD NOT CONCEALED PARTICULARS OF THEIR INCOME OR HA D NOT FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 9... A VERY HEAVY ONUS WAS PLACED ON THE ASSESS EE TO EXPLAIN THE DIFFERENCE BETWEEN THE ASSESSED INCOME AND RETURNED INCOME AND THE ASSESSEE IN THE INSTANT CASE DID NOT DISCHARGE THE SAID ONUS. IN THE LIGHT OF THE DISCUSSION MADE ABOVE AND CONDUCT OF THE ASSESSEE, IT IS THUS CLEAR THAT ALL THE MATERIAL FACTS AND PARTICULARS RELATING TO THE ASSESSEE'S CO MPUTATION OF INCOME WERE NEVER DISCLOSED BY THE ASSESSEE, AND IT IS FURTHER CLEAR THAT THE ASSESSEE DID NOT OFFER ANY COGENT EXPLANATION AT ALL BEFORE THE AO DURING THE PENALTY PROCEEDINGS NOR EVEN ATTEMPTED TO RECONCILE THE DIF FERENCES POINTED OUT BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE PENALTY PROCEEDINGS.. IN THESE CIRCUMSTANCES AND IN THE LIG HT OF DECISIONS OF THE HONBLE SUPREME COURT AND JURISDICTIONAL HIGH COURT REFERRED TO ABOVE, WE ARE OF THE OPINION THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE BURDEN THAT LAY UPON THEM BY EXPLANATION 1 TO S. 27 1(1)(C) OF THE ACT. THEREFORE, WE HAVE NO HESITATION IN UPHOLDING THE O RDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY IMPOSED BY THE AO UNDER S. 2 71(1)(C) OF THE ACT . CONSEQUENTLY, GROUND RAISED IN THE APPEAL IS DISMIS SED. 10 NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 11. IN THE RESULT, APPEAL IS DISMISSED. SD/- S D/- ( HARI OM MARATHA) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. A.C.I.T.,CIRCLE 25(1),NEW DELHI 3. CIT CONCERNED. 4. CIT(A)-XXIV, NEW DELHI 5. DR, ITAT,A BENCH, NEW DELHI ORDER PRONOUNCED IN OPEN COURT ITA NO.918/DEL./2012 17 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI