DCIT, CHENNAI V. Dr.S.Duraiswamy, CHENNAI

ITA 942/CHNY/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0972 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 11-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN SHRI S SRIDHAR
• Keywords: Reasonable cause; Revised return; Reason to believe
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCHES, CHENNAI BEFORE S/SHRI U. B.S. BEDI, JM AND SANJAY ARORA, AM I.T.A. NOS. 942-944/CHNY/2010 ASSESSMENT YEARS : 2 003-04, 2004-05 & 2005-06 THE DY. COMMISSIONER OF INCOME-TAX, BUSINESS CIRCLE-1, CHENNAI. VS. DR. S.DURAISAMY, NO. 4, TILAK STREET EXTENSION, T. NAGAR, CHENNAI-17. [PAN: AACPD 0956E] (REVENUE -APPELLANT) (ASSESSEE-RESPONDENT) REVENUE BY SHRI SHAJI P.JACOB, DR ASSESSEE BY SHRI T.VASUDEVAN FOR SHRI S.SRIDHAR, ADV. O R D E R PER BENCH: THESE ARE A SET OF THREE APPEALS BY TH E REVENUE ARISING OUT OF THE APPELLATE ORDERS FOR THE THREE CONSECUTIVE YEARS, BEING ASSESSMENT YEARS (A.Y.) 2003-04 AND 2005- 06 OF EVEN DATE (26.2.2010 ), ALLOWING THE ASSESSEES APPEALS AGAINST LEVY OF PENALTY U/S. 271(1)(C) OF THE INCOME-TAX AC T, 1961 ('THE ACT' HEREINAFTER). 2. THE FACTS OF THE CASE AND THE ISSUE I NVOLVED FOR ADJUDICATI ON BEING COMMON, THE APPEALS WERE HEARD TOGETHER, AND ARE BEING DISPOSED OF VIDE A COMMON, CONSOLIDATED ORDER. 3.1 BEFORE WE DELINEATE THE ISSUE INVOLVED, IT IS NECESSARY TO SE T OUT THE BACKGROUND FACTS OF THE CASE AS GATHERED FROM THE RECORD IN A CHRONOLOGICAL ORDER, AND FOR NARRATIVE PURPOSES, WE SHALL TAKE THE FA CTUAL DATA PERTAINING TO A.Y. 2003-04. TH E ASSESSEE , A UROLOGIST BY PROFESSION, FILED HIS RETURN OF INCOME FOR THE YEAR ON 27 .11.2003 AT A TOTAL INCOME OF ` 7,93,747/-, INCLUDING PROFESSIONAL INCOME OF ` 5,60,759/-, I.E., ON GROSS RECEIPT OF ` 18,80,392/-, WHICH WAS PRINCIPALLY FROM M/S. APOLLO HOSPITALS LTD., GREAMS ROAD, CHENNAI, WITH WHICH HE WAS AS SOCIATED/ATTACHED, I.E., IN PROFESSIONAL CAPACITY. THE SAID ITA.NOS.942-944/ /CHNY/2010 2 RETURN WAS PROCESSED U/S. 143(1) AT THE RETURNED INCOME, AND NO PROCEEDINGS FOR SUBJECTING THE RETURN TO THE VERIFICATION PRO CEDURE UNDER THE ACT, I.E., BY ISSUE OF NOTICE U/S. 143(2), STOOD INITIATED. DURING THE COURSE OF INVESTIGATION BY THE DEPARTMENT WITH THE SAID APOLLO HOSPITALS IN FEBRUARY, 2006, IT WAS FOUND THAT THERE WAS AN ARRANGEMENT IN PLACE WHEREBY FEES WAS BEING COLLECTED BY IT (HOSPITAL) FRO M THE PATIENTS ON BEHALF OF DOCTORS, WHO WERE PAID THE SAME, I.E., WITH OUT TAKING THE SAME IN ITS ACCOUNTS, AFTER DEDUCTING 10% TOWARDS ITS CHARGES FOR PROV ISION OF INFRASTRUCTURAL FACILITIES. THE ARRANGEMENT HAD BEEN ON FOR SOME YEARS, AS FOUND FROM THE RECORDS FOUND MAINTAINED BY THE HOSPITAL IN ITS RESPECT, AND WHICH HAD ENGAGED THE SERVICES OF A CASHIER SPECIFICALLY FOR THE PURPOSE, I.E. TO EFFECTUATE THE ARRANGE MENT PROPERLY. ON ENQUIRY, IT WAS FOUND THAT THE DOCTORS, INCLUDING THE ASSE SSEE, WERE NOT ADMITTING THE SA ID AMOUNT RECEIVED IN CASH FROM THE HOSPITAL, IN THEIR RETU RNS OF INCOME. SUMMONS U/S. 13 1 OF THE ACT WERE ISSUED ON THE ASSESSEE ON 7.7.2006, AND DETAILS OF RECEIPTS FROM THE HOSPITAL CALLED FOR. THE ASSESSEE, MEANWHILE, ON 15.3. 2006, FILED A RETURN ADM ITTING ADDITIONAL INCOME OF ` 9,03,155/-, PAYING TAX THEREON. NOTICE U/ S. 148(1) WAS ISSUED ON THE ASSESSEE ON 19.3.2008 IN RESPONSE WHERETO HE FURNISHE D THE RETURN ON 8.8.2008, WHICH WAS IN AGREEMENT WITH HIS RETURN FILE D ON 15.3.2006. ACCORDINGLY, THE ASSESSMENT U/S. 143(3) R.W.S.147 WAS MADE VIDE ORDER DATED 22.12.200 8 AT THE INCOMER RETURN ED IN MARCH, 2006. 3.2 NOTICE U/S. 274 FOR THE LEVY OF PENA LTY U/S. 271(1)(C) WAS ALSO ISSUED SIMULTANEOUSLY, ON 22/12/2008, ON THE BASIS TH AT THE ASSESSEE HAD CONCEALED INCOME VIDE THE ORIGINAL RETURN, AND WHICH HA D COME TO LIGHT AS A RESULT OF INVESTIGATION CARRIED ON BY THE DEPARTMENT WITH APOLLO HOSPITALS LTD., GREAMS ROAD, CHENNAI, FIXING THE DATE OF HEARING. THE ASSESSEE RESPONDE D ALONG THE FOLLOWING LINES:- A) THAT HE HAD FILED THE REVISED RETU RN ON 15.3.2006, ADMITTI NG ADDITIONAL INCOME; B) THAT HE HAD DULY RESPONDED TO THE SUMMONS DATED 7.7.2006, FURNISHING THE INFORMATION CALLED FOR; C) THAT TH E RETURN IN RESPONSE TO NOTICE U/S. 148 STOOD FURNISHED ON 8.8.2008, DECLARING NO INCO ME IN EXCESS OF THAT ALREADY RETURNED , NOR DID THE ASSESSMENT BRING TO TAX ANY ADDITIO NAL INCOME, RAISING NO ADDITIONAL DEMAND. ITA.NOS.942-944/ /CHNY/2010 3 3.3 THE AO REJECTED THE ASSESSEES STAND ON THE BASIS THAT ADM ITTEDLY THE ORIGINAL RETURN DID NOT BEAR THE FULL IN COME OR ITS PARTICULARS, EARN ED BY THE ASSESSEE BY WAY OF CONSULTATION CHARGES. THE SAME STOOD REVISE D ONLY SUBSEQUENT TO THE INFORMATION AND EVIDENCE IN THE POSSESSION OF TH E DEPARTMENT THAT THE ASSESSE E, AMONG OTHERS, HAD FAILED TO DISCLOSE THE CORRECT INCOME. THAT IS, THE `REVISED RETURN(S) WAS NOT BONA FIDE AND, THEREFORE, NOT SAVE THE ASSESSEE FROM PENALTY . MERELY BECAUSE THE RE TURN, WHICH WAS EVEN OTHERWISE BEYOND THE TIME AVAILABLE FOR FILING THE REVISED RETURN U/S. 139(5), SO AS TO QUALIFY AS ONE, WAS FILED PRIOR TO THE ISSUE OF NOTICE U/S. 148, WOULD NOT OBLITERATE THE DEFAULT COMMITTED IN NOT FILING THE CORRECT INCOME PER THE ORIGIN AL RETURN, WHERE THE ASSESSEE HAD NO EXPLANATION FOR THE SAME AS IN THE INSTANT CASE, BEING MADE ONLY TO COVER THE DISCOVERY BY THE DEPARTMENT OF THE SA ID ADDITIONAL INCOME AS A RESULT OF ITS ENQUIRIES/INVESTIGATION. HE, RELYING ON A HOST OF CASE LAW, LEVIED PE NALTY FOR EACH OF THE YEARS, BEING 2003-04 TO 2005-0 6. IN APPEAL, THE ASSESSEE FOUND FAVOUR WITH THE LD. CIT(A) ON THE BASIS THAT REVISION BY THE ASSESSE E OF ITS ORIGINAL RE TURN ON 15.3.2006 WAS BONA FIDE , I.E., IT WAS A GENUINE CASE OF OMISSION/ MISTAKE (IN THE ORIG INAL RETURN), WHICH STOOD RECTIFIED, THUS, AND MUCH PRIOR TO THE NO TICE U/S. 148. THERE WAS NOTHING ON RECORD TO SHOW THAT IT WAS NOT SO, BU T A CASE OF CONCEALMENT, WH ICH COULD NOT BE A MATTER OF PRESUMPTION, BASED ON CONJECTURE OR SURMISE, BUT ONE OF FACT. WITH REFERENCE TO THE DECISION IN THE CASE OF CEMENT MARKETING CO. LTD. VS. ASST. CST (1980) 124 ITR 15 (SC), IT WAS OBSERVED BY HIM THAT IN THE ABSENCE OF DELIBERATENESS, I.E., IN-SO-FAR AS DEFAULT IN NOT RETURNING THE CORRECT INCOME OR IN NOT FU RNISHING TRUE AND CORRECT PARTICULARS IN ITS RESPECT, WOULD NOT LEAD TO THE IN FERENCE OF THE ORIGINAL RETURN BEING FALSE, I.E., AS OPPOSED TO A GENUINE OMISSION/MISTAKE, JUSTIFYING THE LEVY OF PENALTY. THE `RE VISED RETURN BEING FILED BEYOND THE TIME ALLOWED THEREFORE U/S. 139( 5), SO THAT IT WAS NOT A REVISED RETURN BUT A NON EST RETURN, WAS CONSIDERED AS OF NO MOMENT , IN VIEW OF THE DECISION BY THE APEX COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (SC), AFFIRMING THE DECISION BY THE MADHYA PRADESH HIGH COURT ( REPORTED AT 241 ITR 124 (MP)) WHEREIN THE RETURNS ADMITTING ADDITIONAL INCOME FILED BEY OND THE TIME LIMIT AVA ILABLE FOR FURNISHING REVISED RETURNS WERE NOT CONSID ERED INVALID ON THAT SCORE. FURTHER, A SIMILAR ISSUE, HAD ALSO ARISEN IN THE CASE OF DR. R.GOPALAKRISHNAN (FOR A.Y. 2005-06), WHICH STOOD DECIDED ITA.NOS.942-944/ /CHNY/2010 4 BY THE JURISDICTIONAL BENCH OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, HE ALLOWED THE ASSESSEES APPEALS. AGGR IEVED, THE REVENUE IS IN APPEAL. 4. BEFORE US, LIKE CONTENTIONS STOOD RAIS ED BY BOTH THE SIDES, EACH RELYING ON THE ORDER OF THE AUTHORITIES BELOW AS FAVOURABLE TO IT. WHILE THE LD. DR PLACED RELIANCE ON THE DECISION BY THE HONBLE HIGH COUR T OF DELHI IN THE CASE OF CIT VS. ESCORTS FINANCE LTD. (I.T.A. NO. 1005/2008 DATED 24 .8.2009), THE LD. AR WOULD PL ACE RELIANCE ON THE DECISION BY THE CO-ORDINATE BENCH IN THE CASE OF ANOTHER DOCT OR, SHRI MADAN MOHAN REDDY (I.T.A. NOS. 132 TO 136/CH NY/2010 DATED 2.7.2010). 5. WE HAVE HEARD THE PARTIES AND PERUSE D THE MATERIAL ON RECORD, INCLUDING THE ASSESSMENT ORDER AND THE REASONS RECORDED FOR ISSUE OF NOTICE/S U/S. 148(1), AS WELL AS THE CASE LAW REFERRED TO. 5.1 WE FIND THAT WHILE THE REVENUES CASE IS BASED ON THE ASSESSEES SECOND RETURN BEING NOT VOLUNTARY, BUT ONLY ON ITS NOTICING THE CONCEALMENT OF INCOME IN THE ORIGINAL RETURNS, THE ASSESSEES CASE IS THAT IT IS SO , ON ACCOUNT OF A GENUIN E MISTAKE/OMISSION THAT HAD CREPT IN THE ORIGINAL RETU RNS AND, IN ANY CASE, FILED MU CH PRIOR TO THE PROCEEDINGS INITIATED BY THE REVENUE IN ITS CASE, WHICH ARE ONL Y PER A NOTICE U/S. 148, ISSUED IN ALL THE CASES ON 19.3.2008. BOTH THE PARTIES HAVE RELIE D EXTENSIVELY ON CASE LAW. SUCCINCTLY PUT, THE ISSUE IS WHETHER THE ASSESSEES SECOND RE TURN(S), WHICH IS AN ADMISSION OF HAVING NOT DISCLOSED THE FULL INCOME PER TH E ORIGINAL RETURN FOR EACH OF THE YEARS UNDER REFERENCE, IS VOLUNTARY AND HIS ACTION IN FURNISHING THE SAME, BONA FIDE . WHILE THE REVENUE RELIES ON THE DECISIONS IN THE CASE OF AYYASOAMI NADAR & BROS. V. CIT , 30 ITR 565 (MAD.), SIVAGAMINATHA MOOPANAR , 52 ITR 591 (MAD.) AND JKA SUBRAMANIA CHETTIAR , 110 ITR 602 (MAD.); THE ASSESSEE DOES ON THE DECISION IN THE CASE OF CIT V. SRI RAJRAM CLOTH STORES , 214 ITR 262 (MAD.); CIT VS. DUBEY (DR. KUMARI M.) , 171 ITR 144 (M.P.); AND CIT (ADDL.) VS. MANJEET ENGINEERING INDUSTRIES , 154 ITR 509 (DEL.). ITA.NOS.942-944/ /CHNY/2010 5 5.2 THE POINT IN ISSUE IS PRINCIPALLY FACTUAL, I.E., WHETHE R THE RETURN BY THE ASSESSEE IN THE ABSENCE OF ANY PROCEEDINGS INITIATED ON IT, CA N BE SAID TO BE VOLUNT ARY, OR IT IS NOT SO, AND HIS ACTION IN REVISING THE RETURN INFLICTED BY WANT OF BONA FIDES . THE LAW IN THE MATTER IS ABUNDANTLY CLEAR, NAY, TRITE, AS A PERUSAL OF THE RESPECTIVE CASES OF THE PARTIES WOULD ITSELF BEAR OUT; THEIR DIFFERING STANDS BEING ONLY QUA FACTS. THE HONBLE JURISDICTIONAL HIGH COURT EXPLAINED THE SAME IN THE CASE OF JKA SUBRAMANIA CHETTIAR (SUPRA) AS: IT IS IMPLICIT IN THE WORD CONCEALED USED IN SEC TION 271(1)(C) THAT THERE HAS BEEN A DELIBERATE ACT ON TH E PART OF THE ASSESSEE. THE WORD OMISSION OCCURRING IN SECTION 139(5) CONNOTES AN UN INTENTIONAL ACT. EQUALLY, TH E WORDS WRONG STATEMENT WILL NOT TAKE IN A STATEMENT KNOW N TO BE FALSE TO THE PERSON WHO MADE THE STATEMENT. HOWEVER, THE WORD DISCOVERS OCCURRING IN SECTION 139(5) WILL MAKE IT CLEAR THAT ONLY AT THE TIME OF DISCOVERY A PERS ON WHO HAD FURNISHED A RETURN FI NDS OUT THAT AN INADVERTENT OMISSION OR UNINTENDED WRONG ST ATEMENT HAD CREPT IN THE RETURN FILED BY HIM. IF A PERSON WHO FURNISHED THE RETURN WAS AWARE OF THE FA LSITY OF THE STATEMENT AND THE INCORRECTNESS OF THE PARTICULARS OF INCOME EVEN AT THE TIME WHEN HE FILED THE ORIGINAL RE TURN, THERE WAS NO QUESTION OF THAT PE RSON SUBSEQUENTLY DISCOVERING TH E EXISTENCE OF THE OMISSION OR CREEPING IN OF THE WRONG STATEM ENT IN THE RETURN ALREADY FILED BY HIM. THEREFORE, SECTION 139(5) WILL APPLY ONLY TO CASE S OF OMISSION OR WRONG STAT EMENTS AND NOT TO CASES OF CONCEALMENT OR FALSE STATEMENTS. IN OTHER WORDS, IF A BONA FIDE AND GENUINE MISTAKE ATTENDS TH E ORIGINAL RETU RN, THERE WOULD BE NO QUESTION OF LEVY OF PENA LTY FOR CONCEALMENT AND/OR FURN ISHING INACCURATE PARTICULARS OF INCOME U/S. 271(1)(C), PARTICULARLY WHERE TH E SAME STANDS RECTIFIED PRIOR TO ITS DETECTION BY THE DEPARTMENT. HERE IT MAY NOT BE OF MUCH CONSEQUENCE IF THE REVISED OR THE CORRECT RETURN IS FILED WITHIN THE TIME ALLOWED U/S. 1 39(5) OR OUTSIDE IT. A `REVISED RETURN BEYOND THE PRESCRIBED TIME THEREFOR UNDER LAW, THOUGH NON EST IN THE EYES OF LAW, MAY YET BE VALID, I.E., INSOFAR AS THE DISCLOSURE IS CONCER NED, BEING ESSENTIALLY AN `EXPLANATION OF AN ADMITTED WRONG. THOUGH, IT MAY APPEAR THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS TAKEN A CLEAR VIEW THAT A REVISION SAVING PE NALTY IS NOT PERMISSIBLE WHERE THE REVISION DOES NOT QUALIFY AS ONE U/S. 139(5), IT IS NOT SO ; IT CLARIFYING THAT THE TWO ACTIONS, I.E., ONE LEADING TO THE REVISION U/S. 139(5) AND THE OTHER OF CONCEALMENT, OPERATE IN DIFFERENT FIELDS. WHILE A RETURN QUALIFYING AS A REVISE D RETURN U/S. 139(5) WOULD CERTAINLY SAVE PENALTY, THE REVERSE MAY NOT ALWAYS BE TR UE, DEPENDING UPON THE OBTAINING FACTS AND CIRCUMSTANCES OF THE CAS E. IN THE CASE OF RAJRAM CLOTH STORES (SUPRA), IT CONFIRMED THE DELETION OF PENALTY LEVIED U/S. 271(1)(C) IN CASE OF A CLEAR SUPPRESSION IN THE ORIGINAL RETURN WHERE THE SAME STANDS RECTIFIED BY THE ASSESSEE ON ITS OWN, I.E., WITHOUT THE SAME ITA.NOS.942-944/ /CHNY/2010 6 HAVING COME TO LIGHT. THE REVENUE, IN SUCH A CASE, HAVING NO MATERIAL OR INFORMATION AS TO SUCH INCOME, I.E., PR IOR TO THE FILING OF THE REVISED RETU RNS, ITS CASE RESTS SOLELY ON THE DECLARATION OF A HIGHER INCOME BY THE ASSESSEE, AND WHICH BY ITSELF CANNOT JUSTIFY PENALTY, I.E., IN FACE OF CLEAR EXHIBITION OF HIS BONA FIDES BY THE ASSESSEE. THAT IS, THE ASSESSEES SECOND RETURN IS VOLUNTARY, SO THAT THE OMISSI ON CANNOT BE TREATED AS A SUBSISTING ACT OF `CONCEALMENT WHICH THE LAW DEEMS WHERE THE ASSSESSEE DOES NOT SUBSTANTIATE HIS EXPLANATION AND FULL PARTICULARS IN RELATION TO ITS INCOME STAND FURNIS HED. NO DOUBT, THE ONUS TO ESTABLISH ITS CASE, WHICH IS ALWAYS ON THE ASSESSEE, BECOMES HEAVY IN SUCH A CASE, I.E., WHERE THE OMISSION IN THE ORIGINAL RETURN IS NOT SHOWN TO BE A RESULT OF A GENUINE MISTAKE, WHICH BY DEFINITION CONNOTES A BONA FIDE ACT, DEVOID OF ANY CONSCIOUS DECISION. HOWEVER, A BONA FIDE , VOLUNTARY ACT MITIGATES THE DEFAULT AND OPERAT ES TO SAVE PENALTY, WHICH IT WOULD BE SEEN IS THE IMPORT OF AND PE RVADES THE LAW ON PENA LTY, ACT AS IT DOES AS A REASONABLE CAUSE. IT IS THIS REASONING TH AT INFORMS THE DECISION IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (SUPRA), WHICH RESTS ON THE FACTUAL EDIFICE OF THE NON-DISCLOSURE IN THE ORIGINAL RETURN (WHICH BEING VOLUNTARY HA S TO BE TAKEN AS THE STARTING POINT FOR THE PURPOSE OF RECKONING THE DEFAULT), BEING A CASE OF AN OMISSION, I.E., IN CONTRADISTINCTION TO A POSITIVE ACT OF CONCEALMENT. IT IS ON ACCOUNT OF THIS VARIATI ON IN THE FACTUAL FINDINGS, I.E., FACTUAL DETERMINATION OF THE MATTER, THAT RESU LTS IN THE APPARENTLY VARYING DECISIONS BY THE TRIBUNALS AND COURTS, WHICH IS OTHERWISE AN IMPOSSIBILITY, I.E., GIVEN THE WELL-SETTLED, ESTABLISHED LAW IN THE MATTER. IT IS A TESTIMONY OF THE SAME TH AT THE APEX COURT IN THE CASE OF K.P. MAHUDHUSUDANAN V. CIT (2001) 251 ITR 99 (SC), UPHELD THE LEVY OF PENALTY U/S. 271 (1)(C) WHERE THE ASSESSEE WA S UNABLE TO SUBSTANTIATE HIS EXPLANATION (FOR THE DEFAULT) OR OTHERWISE EXHIBIT HIS BONA FIDES , AND THERE IS NO INCONSISTENC Y EITHER IN THE LAW OR AS PRONOUNCED BY THE HIGHER COURTS OF LAW PER THE SEVERAL JUDGEMENTS TO DIFFERING AND APPARENTLY OPPOSING RESULTS. CLEARLY, THEREFORE, WHERE NO BONA FIDE OMISSION OR MISTAKE VISITS THE ORIGINAL RETURN, THE SUBSEQUENT RETU RN IS NOT BY ITSELF A VALID EXPLANATION FOR THE DEFAULT IN THE ORIGINAL RETURN , SO AS TO SAVE PENALTY. A SUBSEQUENT AMENDING ACT MAY, WHERE THE SAME IS BONA FIDE AND VOLUNTARY, PRIOR TO THE DETECTION BY THE REVENUE; THE TWO INCIDENTS BEING INTERWOVEN, CAUSE RE MISSION ON GROUND OF REASONABLE CAUSE. ITA.NOS.942-944/ /CHNY/2010 7 5.3 WE NEXT ADVERT TO THE FACTS OF THE CASE, AS THE ASSESSEES `EXPLANATION HAS NECESSARILY TO BE CONSIDERED IN LIGHT THEREO F. HE, BEGINNING F.Y. 20 00-01, RIGHT UP TO F.Y. 2004-05, I.E., THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR (A .Y. 2005-06) FOR WHICH RETURNS HAD BEEN FALLEN DUE FOR SUBMISSION UN DER THE ACT UP TO FE BRUARY, 2006, WHEREAT INVESTIGATIONS WERE CARRIED ON BY THE REVENUE WITH M/S. APOLLO HO SPITALS LTD., GREAMS ROAD, CHENNAI, FROM WHICH THE ASSESSEE DERI VES BULK OF HIS PROFESSIONAL INCOME, WAS IN RECEIPT OF SUBSTANTIAL SUMS OF MONEY IN CAS H. THE SAID MONEY WAS UNACCOUNTED BY THE HOSPITAL, BEING, AS EXPLAINED, NOT ITS OWN MONEY, BUT FOR WH ICH IT WAS ONLY A DISBURSING AGENCY, I.E., COLLECTING FROM THE PATIENT FO R DELIVERY TO THE CONCERNED DOCTOR, AFTER DEDUCTING 10% TOWARDS ITS CHARGE S FOR PROVISION OF INFRASTRUCT URAL FACILITIES. THE SAID FACTS CLARIFY A FEW THINGS. FI RSTLY, THERE IS NO DISPUTE QUA THE PRIMARY FACTS WHICH ARE ADMITTED, SO THAT THE DIFFERE NCE IS ONLY IN RELATION TO TH E INFERENTIAL FINDINGS, WHICH THOUGH ARE AS MUCH FINDINGS OF FACT. THE RECEIPT UNDER REFE RENCE IS ONLY IN RESPECT OF SERVICES RENDERED BY THE ASSESSEE UNDER THE AUSPI CES OF THE HOSPITAL, I. E., TO THE PATIENTS ON WHICH THE CHARGE IS RAISED. AS SUCH, ALL THE THREE PARTIES, I.E., THE PATIENT, DOCTOR AND THE HOSPITAL ARE IN THE KNOW OF THE SAME. SO HOWEVER, NO OFFI CIAL CHARGE (REGULAR BILL) STANDS RAISED ON THE PATIENT EITHER BY THE HOSPITAL OR BY THE DOCTOR, WHO PAYS ONLY TO THE HOSPITAL. DOING SO WOULD NECESSITATE TH EM TO ACCOUNT FOR THE SAME, AS WELL AS THE AMOUNT RECEIVED THERE-AGAINST. THE HOSPITALS EXPLANATION, THAT IT WAS DOIN G SO AS THE MONEY WAS BEING COLLECTED FOR AND ON BEHALF OF THE DOCT OR CONCERNED IS, TO OUR MIND, ONLY AN ALIBI . FIRSTLY, THE ARRANGEMENT IS ONLY A JOINT, INTERNAL ARRA NGEMENT, TO WHICH THE PA TIENT IS NOT PRIVY. THAT A PART OF THE RECEIPT WAS TO BE SUBSEQ UENTLY PAID TO THE DOC TOR (WHO IN ANY CASE WOULD HAVE TO BE PAID FOR HI S SERVICES) IS SOMETHING BETWEE N THE HOSPITAL AND THE DOCTOR; AS FAR AS THE PATIENT IS CON CERNED, IT IS PAYING TO THE HOSP ITAL, THROUGH WHOSE AGENCY THE MEDICAL SERVICES ARE BEING RECEIVED BY HIM. EVEN SO, NOTHING PREV ENTED THE HOSPITAL TO RAISE THE BILL, ISSUE RECEIPT, PAYING THE ASSESSE E HIS DUES AS PER THE ARRANGEMENT, I.E., TO ACCOUNT FOR THE SAME, AS INDEED IT WOULD BE, AND IS, DO ING FOR THE OTHER AMOUNTS BEING PAID TO HIM, I.E., BY DULY ACCOUNTING THE SAME , TO A LIKE-WISE ACTION AT THE END OF THE ASSESSEE. THE AMOUNT IS AS MUCH IN THE NATU RE OF A PROFESSIONAL RECEIPT OF THE DOCTOR AS ARE THE `SUCH OTHER (ACCOUNTED) AMOUNTS, WHIC H, AS IT APPEARS, ARE RECEIVED THROUGH THE BANKING CHANNEL, AS AGAINST STRICTLY IN CASH FOR THE AMOUNT/S UNDER REFERENCE. IT IS A ITA.NOS.942-944/ /CHNY/2010 8 COMMON ARRANGEMENT, PREVALENT IN MOST BIG CITIES WHEREBY THE CONSULTING DOCTOR, THE CHOICE OF WHOM IS LEFT TO THE PATIENT, PRACTIC ES OR DISPENSES SERVICES THROUGH A HOSPITAL WHICH PROVIDES THE MANAGERIAL AND INFRASTRU CTURAL SUPPORT, VIZ. CONSULTANCY CHAMBER, EQUIPMENT, BED, PARAMEDICAL A ND SUPPORT STAFF, ETC., EVEN CH ARGING THE PATIENTS SEPARATELY FOR SPECIFIC UTILITIES, VIZ. BED, OPERATION THEATR E, ETC. THE SAME IN NO MANNER PRECLUDES THE HOSPITAL FROM RAISING THE CHARGE, DULY ACCO UNTING FOR THE RECEIPT AND DISBURSEMENT. FURTHER, EVEN ASSUMING THE HOSP ITAL WAS DISINCLINED TO ENTE R THE SAME IN ITS BOOKS (FOR WHICH WE SEE NO REASON, THOUGH , AND WHICH - IF INDEED SO - WOULD BE RATHER SURPRISING IN AS-MUCH AS THAT WOULD ONLY EN ABLE TO EXERCISE PROPER CONT ROL OVER THE SAME), THE LEAST THAT COULD BE DONE WAS TO ISSUE RECEIPT TO THE PATIENT, ADMITTING A CORRESPONDING LIABILITY TO THE DOCTOR, AS WELL AS OBTAIN A RECEIPT FRO M HIM ON PAYMENT, I.E., THUS ACCOUNTING FOR THE DIFFERENCE AS ITS RECEIPT/INCOME . THAT IT DID NOT DO SO, I.E ., THIS BARE MINIMUM, BETRAYS ITS COMPLICITY. IN OTHE R WORDS, IT IS PATENT THAT THE ARRANGEMENT WAS BEING EXECUTED IN A MANNER INTENDED TO KEEP THESE AMOUNTS OUT OF BOOKS, I.E., UNACCOUNTED; THE HOSPITAL IN FACT ENGAGING A SEPARATE PERSON (CASHIER) ONLY FOR THIS PURPOSE. WHY WOULD THAT BE NECESSARY IF THESE AMOUNTS WERE TO FORM PART OF THE REGULAR RECEIPT, OR WERE TO BE, LIKE- WISE, ACCOUNTED FOR? THAT THE ASSESSEE DID NOT DISCLOSE THE SAME IN HIS RETURNS FOR THE RELEVANT YEARS, AS WELL AS THE HOSPITAL, ITS SH ARE, CONFIRMS THIS TO BE A RESULT OF CONCERTED ACTION BEYOND THE PALE OF ANY DOUBT. THE PRACTICE CONTINUED MONTH AFTER MONTH, AND YEAR AFTER YEAR, FOR ALMOST 6 YEARS, I.E., EVEN IF IT IS CONSIDERED AS COMMENCING FROM A.Y. 2001-02 (FOR WHICH RECORDS WERE FOUND BY THE REVENUE DURING INVESTIGATION OF THE HOSPITAL) UP TO FEBRUARY, 2006. HOW COULD, IN VIEW THEREOF, IT MAY BE ASKED, IT BE CONT ENDED THAT THE NON- DISCLOSURE OF SUCH RECEIPTS BY THE ASSESSEE FOR AYS 2001-02 TO 2005-06 IS A GENUINE CASE OF OMISSION/MISTAKE, AND NOT A CA SE OF CONCEALMENT OF INCOME? IT WOULD BE IN VIEW OF THE FOREGOING FACTS, WHICH ARE ADM ITTED AND UNDISPUTED, A CONTRADI CTION TO SUGGEST OTHERWISE. IN FACT, THE ASSESSEE HAS NO BASI S WHATSOEVER TO CONTEND SO, WHICH, THUS, IS ONLY A BALD ASSERTION. HE SECURES AMOUNTS IN CASH (WITHOUT RECEIPT) FROM THE HOSPITAL IN PURSUANCE TO AN ARRANGEMENT (OR, FROM THE PATIENT THROUGH THE HOSPITAL), AGAINST CONSULTING/PROFESSIONAL SERVICES RENDERED; DOES NOT ISSUE ANY RECEIPT E ITHER TO THE PATIENT OR TO THE HOSPITAL; DOES NOT ENTER IT IN HIS REGULAR RECORDS, WHICH HE MAINTAINS (BEING OBLIGED TO UNDER THE ACT), ITA.NOS.942-944/ /CHNY/2010 9 AND ON THE BASIS OF WHICH ONLY HE FILES HIS RETURN OF INCOME WITH THE DEPARTMENT YEAR AFTER YEAR. COULD IT, BY ANY MEASURE, BE SAID TO BE NOT A CONSCIOUS, DELIBERATE ACTION, BUT A RESULT OF A GENUINE, BONA FIDE MISTAKE ? IT IS ONLY HIS CHARGES THAT ARE BEING COLLECTED BY THE HOSPITAL STAFF. AGAIN, WIT HOUT DWELLING INTO THE MECHANIC S OF THE ARRANGEMENT, BEING OF LITTLE CONSEQUENCE, THE FACT REMAINS THAT HE RECEIVES CASH, ON HIS OWN ACCOUNT, MONTH AFTER MONTH (QUITE APART FROM HIS OTHER, DULY ACCOUNTED - BOTH BY TH E HOSPITAL AND BY HIM - RECEIPTS), AND WHICH IS ASSIDUOUSLY KEPT OFF THE ACCOUNTS, INCLUDING BY THE HOSPITAL, AND ALSO NOT RETURNED. WHY? THE ANSWER, EVID ENTLY, IS TO EVADE TAX, AND THAT TO THE QUESTION POSED EARLIER, IN THE NEGATIVE. BY OWN ACTIONS, BOTH THE PA RTIES HAVE DEIGNED NOT TO ACCOUNT FOR THE SAME. THIS , THEN, CONSTITUTES OUR FIRST FINDIN G, IN CONTRADICTION TO THAT BY THE LD. CIT(A), HOLDING OTHERW ISE. THE ORIGINAL RETURNS, ADMITTEDLY NOT DISCLOSING THE CORRECT INCOME FROM PROFESSION, BUT AT A LOWER SUM(S), ARE THEREFORE ATTENDED WITH DELIBERATENESS, SPOKEN OF IN THE CASE OF CEMENT MARKETING CO. LTD. VS. ASST. CST (SUPRA) AND, THUS, FALSE, I.E., TO THAT EXTENT , SO THAT THE CONCEALMENT IS PROVED. 5.4 WE, NEXT, EXAMINE THE SECOND RETURN /S FILED BY THE ASSESSEE DISCLOSING THE CONCEALED INCOME, I.E., AS TO WHETHER THE SAME COULD BE REGARDED, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS A VALID EXPLAN ATION FOR THE NON-DISCLOS URE PER THE ORIGINAL RETURN. THIS IS FOR THE SIMP LE REASON THAT EVEN THOUGH BOT H THE CONCEALMENT OF AND/OR FURNISHING INACCURATE, PARTICULARS OF INCOME IN THE ORIGINAL RE TURN STAND PROVED, IF AT ANY TIME PRIOR TO ITS DETECTION BY THE REVENUE , THE ASSESSEE VOLUNTARILY DISCLOSES THE CONCEALED INCOME WITH ITS PARTICULARS, PAYING THE TAX THEREON, THE SAME BEING VOLUNTARY, WOULD SAVE HIM FROM PENALTY QUA THE CONCEALMENT OF PARTICULAR S OF INCOME. THIS IS AS EVEN THOUGH THE ASSESSEE MAY NOT HAVE AN E XPLANATION FOR HIS ORIGINAL RETURN, I.E., AS FURNISHED, YET, BUT FOR HIS SU BSEQUENT VOLUNTARY ACTION, THE REVENUE WOULD NOT HAVE BEEN ABLE TO KNOW OF THE CONCEALED INCOME, AND IT IS ONLY THE ASSESSEES ACTION WHICH BROUGHT THE SAME TO SURFACE, ESTABLISHING HIS BONA FIDES IN THE MATTER. THIS, AS APPARENT (AND ALSO AFORE-DISCUSSED) WOULD HOLD IRRESPECTIVE OF WHETHER THE SECOND RETURN COULD IN LAW BE REGARDED AS A REVISED RETURN OR NOT, WHICH, BESIDES THE CONDITION OF BEARING A GENUINE MISTAKE/OMISSION, IS ATTENDED BY A LIMITATION AS TO TIME, RECKONED AB SOLUTELY (AT ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT Y EAR) OR IN TERMS OF THE COMPLETION OF THE ITA.NOS.942-944/ /CHNY/2010 10 PROCEDURE, I.E., ASSESSMENT, WHICHEVER IS EAR LIER, WHILE THE SOLE PREMISE OR VALUE OF THE SUBSEQUENT RETURN LIES IN ITS BEING VOLUNTARY AND, THUS, ESTABLISHING BEYOND DOUBT THE ASSESSEES BONA FIDES . AS SUCH, THOUGH WE HAVE FOUND THE ASSESSEE S ORIGINAL RETURNS TO BE NOT IMBUED WITH ANY GENUINE OMISSION/MI STAKE, AS CONTENDED, WHICH HE SEEKS TO MODIFY ON DISCOVERY, WE ARE OF THE VIEW THAT VOLUNTARY ACTION IN DI SCLOSING HIS CONCEALED INCOME, PRIOR TO ITS DETECTION BY THE REVENUE, WOULD SAVE PENALTY. IN FACT, THIS FORMS THE CRUX OF THE ASSESSEES CASE (REFE R PARA 3.2, 5.1), AND ON WHIC H HE STANDS ALLOWED RELIEF BY THE LD. CIT(A); HIS EXPLANATION BEFORE THE AUTHORITIES BELOW BEGINS ONLY WITH THE FILING OF THE SECOND RETURN IN MARCH, 2006, IGNORING HIS PAST CONDUCT . THE QUESTION, THEREFORE, BOILS DOWN TO WHETHER THE SECOND RETU RNS FOR A.Y. 2001- 02 TO 2005-06 (THOUGH WE AR E ONLY CONCERNED WITH THE AYS 2003-04 TO 2005-06), DISCLOSING ADDITIONAL INCOME RECE IVED IN CASH FROM HIS PATIENTS FOR THE SAID YEARS (AGAINST PROFESSIONAL SERVICES RENDERED), COULD BE REGARD ED AS VOLUNTARY. TH E FACTS IN THE MATTER, WHICH ARE ADMITTED, SPEAK FOR TH EMSELVES. THERE WAS NO CHANGE OF HEART AT THE ASSESSEES END. THERE WERE INVESTIGATIONS AT THE HOSP ITAL CONDUCTED BY THE DEPARTMENT IN FEBRUARY, 2006, RESULTING IN INFORMATION AND EVIDENCE S COMING TO ITS POSSESSION OF THE ASSESSEE BEING PAID IN CASH (FOR THE RELEVANT YEAR S) WHICH IS NOT RECORDED IN HIS REGULAR ACCOUNTS/RETURNS. THIS IS BORNE OUT BY THE REAS ONS RECORDED FOR THE ISSUE OF NOTICE U/S. 148 FOR THE RELEVANT YEARS. IMMEDIATELY THEREAFT ER, IN MARCH, 2006, THE ASSESSEE REVISED THE RETURNS FOR ALL THE YEARS. DID HE MAINTAIN A RECORD OF SU CH RECEIPTS, WHICH WERE NEVER INTENDED TO BE DISCLOSED TO THE REVENUE AND, FURTHER, PRESERVED IT FOR YEARS ? HOW ELSE COULD HE FURNISH, YEARS LATER, THE EXACT AMOUNT OF SUCH UNDI SCLOSED RECEIPT FOR EACH OF THE YEARS, WHICH WOULD, IF SO, ESTABLISH HIS MALA FIDES . FOR ALL WE KNOW, IN ALL PROBABILITY, THE INFORMATION FOR EACH OF THE YEARS, WHICH MATCHES WITH THE RECORD S MAINTAINED BY THE HOSPITAL IN ITS RESPECT, WAS ONL Y TRANSMITTED TO THE ASSESSEE BY THE HOSPITAL, WHOSE LIAISON CONTINUES. UNDER THE CIRCUMSTANCES, THE FILING OF THE RETURNS BY THE A SSESSEE IN THE INTERIM I.E., PRIOR TO THE ISSUE OF NOTICES U/S. 148, IS ONLY A PRE-EMPTORY MEASURE. FURTHER, THE SAME STANDS BROUGHT TO TAX BY THE REVENUE U/S. 147, AC TION UNDER WHICH NEEDS TO BE JUSTIFIED ON SOME COGENT/VALID BASIS. THE REASONS RECORDED FO R THE PURPOSE IS ONLY QUA THE INFORMATION AND THE EVIDENCES IN POSSESSION WITH THE REVENUE . IT IS, THEREFORE, DIFFICULT TO SEE AS TO HOW THE ASSESSEES AC TION IN `RETURNING THE ADDITIO NAL INCOME, WHICH IS CLEARLY ITA.NOS.942-944/ /CHNY/2010 11 PRE-EMPTORY, COULD BE REGARDED AS VOLUNTARY. THE SAME WO ULD BE JUSTIFIED ONLY WHERE THE ONLY REASONS FOR ISSUING NOTICE/S U/S. 148( 1) IS TO REGULARISE THE RETURNS FILED BY THE ASSESSEE, BEING OUT OF TIME, WHILE IN THE PRESEN T CASE, CLEARLY, THAT IS NOT THE CASE AND THE NOTICE U/S. 148(1) STANDS ISSUED ON THE BASI S OF COGENT REASON TO BELIEVE THE ESCAPEMENT FROM ASSESSMENT OF INCOME CH ARGEABLE TO TAX FOR THE RELEVANT YEARS ON THE BASIS OF DEFINITE INFORMATION AND MATERIAL WITH THE RE VENUE AS TO ESCAPEMENT FROM TAX OF DEFINITE INCOME (COPY ON RECORD ). IN FACT, THE ASSESSEE NOT EVEN CONTENDS SO. AS SUCH, HIS STATING OF HIS ACTION BEING VOLUNTARY IS, AGAIN, A CONT RADICTION IN TERMS. WHAT RATHER, IS MORE RELEVANT AND IMPORTANT, FROM THE STAND POINT OF PENALTY, IS WHETHER THE REVISION IS VOLUNTARY, I.E., STANDS EFFECTED BY THE ASSESSEE ON HIS OWN, ON DISCOVERY THE MISTAKE/OMISSION IN THE ORIGINAL RETURN AND PRIOR TO DETECTION BY TH E REVENUE. `DETECTION HAS TO BE CONSIDERED IN THE PRACTICAL SENSE OF THE TERM AND NOT IN ANY DOGMATIC MANNER. AS EXPLAINED IN AYYASOAMI NADAR & BROS. VS. CIT (SUPRA), THE ADMISSION BY THE ASSESSEE EVEN DURING THE COURSE OF ASSESSMENT PRO CEEDINGS AND BEFORE THE EXPIRY OF THE TIME AVAILABLE FOR REVISION, WOULD BE OF NO CONSEQUENCE WHERE IT IS MADE AFTER THE AO CAME TO KNOW OF THE OBTAINING FACTS. FURTHERMORE, TH E ASSESSEE HAVING PAID THE TAX ALONG WITH INTEREST, THE REVENUE, BUT FOR THE MATERIAL AND INFORMATION W ITH IT, VALIDATING ACTION U/S. 147, WAS NOT EVEN REQUIRED TO ISSUE NOTICE U/S. 148 (REFER: CIT V. SHELLY PRODUCTS , 261 ITR 367 (SC)). 5.5 WE MAY NEXT DISCUSS SPECIFICALLY THE CASE LAW CITED BY AND ON ASSESSEES BEHALF IN SUPPORT OF ITS CASE. TH E DECISION IN THE CASE OF CIT V. SRI RAJRAM CLOTH STORES (SUPRA), STANDS CONSIDERED AND, IN FACT, DRAWN SUPP ORT FROM BY US. THE DECISION IN THE CASE OF ACIT VS. DUBEY (DR.KUMARI M.) (SUPRA) IS BASED ON THE FINDI NG THAT THE OMISSION IN THE ORIGINAL RETURN WAS NOT A CASE OF DELIBERATE CONCEALMENT AND, FURTHER, THAT THE SUBSEQUENT REVISION WAS BONA FIDE ; THE ASSESSEE, AS A MATTER OF FACT , BEING UNAWARE OF THE OMISSION OR THE WRONG STATEMENT AT THE TIME OF FILING OF THE ORIGINAL RETURN. WE ARE UNABLE TO SEE AS TO HOW THIS CASE WOULD BE OF ANY ASSISTANCE IN THE PRESENT CASE, WHICH WE HAVE FOUND AS IMBUED WITH WILFUL AND DELIBERATE CONCEALMENT. THE FACTS IN THE CASE OF CIT (ADDL.) VS. MANJEET ENGINEERING INDUSTRIES (SUPRA) ARE, AT THE MINIMUM, CUMBERSOME, INVOLVING A MIXED QUESTION OF FACT AND LAW, RUNNING OVER ITA.NOS.942-944/ /CHNY/2010 12 SEVERAL YEARS. THE ASSESSEE HAD DISCLOSED FULL AND TRUE PARTICULARS IN RELATION TO TRANSACTION BASED ON AN AGREEM ENT DATED NOVEMBER 8, 1960. THERE IS NO CHARGE AS TO NON-DISCLOSURE OF TRUE AND FULL PARTICULARS ON THE PART OF THE FIRM. IN FACT, THE LEVY OF PENALTY U/S. 271(1)(C), WHICH STOOD CANCELLE D, WAS ON ONE OF THE PARTNERS OF THE RESPONDENT-FIRM, SHRI ARJUN SINGH, FOR CONCEALMENT OF RENTAL INCOME FOR A.Y. 1964- 65,AND FOLLOWED AS A NATURAL C ONSEQUENCE TO THE VIEW FINALLY UPHELD BY THE HONBLE COURT QUA THE TRANSACTION, I.E., THAT THERE WAS INDEED A TRANSFER OF PROPERTY BY THE PARTNER TO THE FIRM ON NOV. 8, 1960 AND, AS SUCH, THERE WAS NEITHER ANY LIAB ILITY OF RENT ON THE FIRM OR ACCRUAL OF CORRESPONDING INCOME IN THE CASE OF THE PARTNER. CLEARLY, THE CASE HAS NO RELEVANCE IN THE PRESENT CASE. 6. CONCLUSION ANY DISCLOSURE OF INCOME BY THE ASSESSEE, AS IN THE INSTANT CASE, I.E., ON DISCOVERY BY THE REVENUE OF THE FALSITY IN THE OR IGINAL RETURN/S, PARTICULARLY WH ERE IT IS FOUND TO HAVE BEEN CONSCIOUSLY AND SYSTEMATICALLY SUPPRESSED EAR LIER, CANNOT BE REGARDED AS VOLUNTARY AND, THEREFORE, HAS TO BE IGNORED FOR THE PURPOSE OF LEVY OF PENALTY FOR CONCEALMENT OF, AND/OR FURNISHING INACCURATE, PARTICULARS OF INCOME, WHICH STANDS ATTRACTED [ SIVAGAMINATHA MOOPANAR & SONS VS. CIT (SUPRA), ALSO SEE AYYASOAMI NADAR & BROS. VS. CIT (SUPRA)]. BEFORE PARTING, WE MAY ALSO ADVE RT TO THE DECISION BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DR. MADAN MOHAN REDDY (IN ITA NO. 132 TO 136/CHNY/2010 DATED 02/7/2010, COPY ON RECORD) RELIE D UPON BEFORE US. THIS IS FO R THE REASON THAT THE SAME DEALS WITH A SIMILAR CASE , EVEN THOUGH THE ISSUE AT LARGE IS PRIMARILY FACTUAL, WHICH STANDS ADJUDICATED BY US, AS APPARENT, ONLY ON THAT BASIS, APPLYING THE SETTLED LAW, WITH REFERENCE TO THE CITED DECISIONS BY THE HONBLE JURISD ICTIONAL HIGH COURT AND THE APEX COURT, ELUCIDATING THE SAME. THE TRIBUN ALS ORDER IN THE SAID CASE STANDS DELIVERED FOLLOWING THAT IN THE CASE OF ONE DR. R. GOPALAKRISHNAN (DATED 4/12/2009), WH ICH HAS SINCE FOUND APPROVAL BY THE HONBLE JURISD ICTIONAL HIGH COURT (IN T.C.(A) NO. 52/2 010 DATED 5.7.2010 (COPY ON RECORD). THE FACTS OF THE CASE ARE NOT BEFORE US. THE MATTE R, AS AFORESAID, IS PRIMARILY FACTUAL, EVEN AS AFFIRMED IN THE CASE OF CIT VS. DR. DUBEY (SUPRA). THE PREMISE OF THE SAID DECISIONS IS THAT THE SECOND RETU RN IS VOLUNTARY, AND WHICH, IF SO, WITHOUT DOUBT, SAVES PENALTY AND WHICH WE HAVE IN THE PRESENT CASE FOUND AS NOT, ENDORSING THE ITA.NOS.942-944/ /CHNY/2010 13 FINDINGS BY THE AO IN THE MATTER. THE DECISI ON BY THE HONBLE HIGH COURT IS BASED ON THE FACTUAL FINDING OF THE SECOND RETU RN BEING A REVISED RETURN U/S. 139(5), I.E., FILED WITHIN THE TIME ALLOWED THEREBY AND THE NON-DISCLOSURE OF INCOME PER THE ORIGIN AL RETURN BEING ON ACCOUNT OF A GENUINE AND BONA FIDE MISTAKE. IN THE INSTANT CASE , ON THE CONTRARY, THERE IS A SPECIFIC FINDING BY THE AO OF IT NOT BEING A CAS E OF OMISSION OR WRONG STATEMENT, BUT A CASE OF CONCEALMENT AND FALSE STATEMENT, WITH THERE BEING, IN FACT, NO EXPLANATION BY THE ASSESSEE OF HIS FAILURE TO DISCLOSE HIS ENTIRE PROFESSIONAL INCOME IN THE FIRST INSTANCE (REFER PARA 10 OF THE PENALTY ORDER). IT IS THIS FINDING WHIC H HAS FOUND OUR AP PROVAL, NOTICING THAT THE ASSESSEES CASE AS SANS ANY EXPLANATION QUA THE STATED OMISSION/MISTAKE, WHICH BEGINS ONLY WITH THE FILING OF THE SECOND RETURN, WHILE DEFAULT FOR WHICH THE PENALTY STANDS LEVIED HAVING OCCURRED EARLIER, I.E., AT THE TIME OF FURNISHING THE ORIGINAL RETURN. THE SAID FACTUAL FINDING, AS NOTED BY THE HON BLE COURT AT PG. 6 OF ITS JUDGEMENT, AFFIRMS THE BASIS OF ITS DECISION, AND WHICH IS, THUS, CLEARLY INAPPLICABLE IN VIEW OF THE FACTUAL EDIFICE OF THE PRESENT CASE WHICH IS FOUN DED ON THE TWIN FACTUAL FINDINGS, I.E., A) IT BEING A CASE OF CONSCIOUS AND DELIBERAT E OMISSION TO RETURN THE FULL INCOME; AND B) THE SECOND RETURN(S) BY THE ASSESSEE BEI NG NOT VOLUNTARY, BUT ON THE DEFAULT IN NOT FURNISHING THE FULL AND CORRECT INCOME PER THE OR IGINAL RETURN HAVING COME TO THE NOTICE OF THE REVENUE, AND WHICH, CONSEQUENTLY, FORMED THE BASIS OF ISSUE OF NOTICE/S U/S. 148 FOR EACH OF THE RELEVANT YEARS, THOU GH ISSUED ONLY LATER, AND IF FACT IS BY ITSELF OF NO MOMENT. THE SAID DECISION WOULD HAVE NO BEARING ON THE PRESENT CASE. WE DECIDE ACCORDINGLY, CONFIRMING THE LEVY THE PENALTY AND, ACC ORDINGLY, SET ASIDE THE ORDERS BY THE LD. CIT(A). 7. IN THE RESULT, ALL TH E REVENUES APPEALS ARE ALLOWED. SD/- SD/- (U.B.S. BEDI) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: CHENNAI DATED: MARCH 18, 2011 GJ COPY TO: 1. DR. S.DURAISWAMY, NO. 4, TILAK ST REET EXTENSION, T.NAGAR, CHENNAI-17. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-1, CHENNAI. 3. THE COMMISSIONER OF INCOME-T AX (APPEALS)-VI, CHENNAI. 4. THE COMMISSIONER OF INCOME -TAX, CHENNAI-IV,CHENNAI. 5. D.R./I.T.A.T., CHENNAI BENCHES, CHENNAI. 6. GUARD FILE. // TRUE COPY // ITA.NOS.942-944/ /CHNY/2010 14