ACIT/DCIT., Central Circle, Agra V. Shri Sunil Chand Gupta, Agra

ITA 96/AGR/2011

• Counselvise Citation: 9620314 RSA 2011
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 13-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ATESHAM ANSARI
• Keywords: Unexplained investment; Income from undisclosed sources; Peak credit; Question of law; Valuation report; Sham transactions; Revised return; Reason to believe; Reassessment proceedings
• Section: 54F; 142(1); 133A; 153A; 139(5); 147; 68; 148; 263; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.96/AGR/2011 ASSESSMENT YEAR : 2002-03 ASSTT./DY. COMMISSIONER OF INCOME TAX, VS. SHRI SUN IL CHAND GUPTA, CENTRAL CIRCLE, AGRA. C/O. TRAVEL BUREAU, FATEHABAD ROAD, AGRA. (PAN: ABPPG 1076 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATESHAM ANSARI, JR. D.R. RESPONDENT BY : SHRI DEEPENDRA MOHAN, C.A. DATE OF HEARING : 31.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 22.06.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 22.11.2010 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2002-03 ON THE FOLLOWING GROUNDS :- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN COM ING TO THE CONCLUSION THAT THE ASSESSEE HAD DISCLOSED THE INCO ME BEFORE THE DETECTION BY THE DEPARTMENT AND SO HE WAS NOT LIABL E TO PENALTY UNDER SECTION 271(1)(C) OF I.T. ACT INSPITE OF THE FACT T HAT THE AO HAS VERY CLEARLY BROUGHT ON RECORD AN ELABORATE DISCUSSION R EGARDING WHY THE INCOME SURRENDERED WAS IN COMPLIANCE TO NOTICE U/S 148 AND, THEREFORE NOT VOLUNTARY AND HENCE PENALTY UNDER SEC TION 271(1)(C) OF ITA NO.96/AGR/2011 A.Y. 2002-03 . 2 I.T. ACT WAS LEVIABLE FOR CONCEALMENT AS WELL AS FU RNISHING OF INACCURATE PARTICULARS. 2. THE LD. CIT(A) IS ERRED IN LAW AND IN FACTS IN D ELETING THE PENALTY AMOUNTING TO RS.4,44,209/- WITHOUT APPRECIA TING THE FACTS THAT THE ASSESSING OFFICER HAD SUFFICIENT EVIDENCE REGAR DING THE CONCEALED INCOME WHICH HAD ESCAPED ASSESSMENT AND ASSESSEE HA D IN RESPONSE TO NOTICE UNDER SECTION 148 HAD SURRENDERED THE INC OME FROM SHARE TRANSACTION S INCOME FROM OTHER SOURCES. 3. THE CIT(A) HAS ERRED IN LAW AND FACTS IN NOT FOL LOWING THE JURISPRUDENCE AS LAID DOWN IN THE CASES OF CIT VS. HARPRASHAD & COMPANY (DELHI) 328-ITR-53, MODEL FOOTWEAR PVT. LTD . VS. ITO (319) ITR (AT)-51 (DELHI), ACIT VS. SURENDIR LAL CH OPRA (2010) 2 ITR (TRIB.) 790-DELHI, CIT VS. ESCORTS FINANCE LTD. , 188-ITR-87 (DELHI). 4. THE CIT(A) HAS ERRED IN LAW IN FINDING OUR JURIS DICTIONAL DEFECTS IN RELYING ON THE DECISION OF SHRI BHAGWAN FINANCE 288 ITR 412 WHICH NO LONGER LAYS DOWN THE CORRECT LAWS IN V IEW OF THE SUB SECTION (1B) OF SECTION 271 OF THE I.T. ACT INTRODU CED BY FINANCE ACT 2008 W.E.F. 01.04.1989. 5. THAT THE ORDER OF LD. CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS AS WELL AS WITHOUT JURISDICTION NEEDS TO BE V ACATED AND THE ORDER OF THE AO BE RESTORED. 6. THAT THE APPELLANT CRAVES LEAVE TO AMEND ONE OR MORE GROUNDS OF APPEAL AS STATED ABOVE AS AND WHEN NEED FOR DOIN G SO MAY ARISE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS FILED RETURN OF INCOME ON 30 TH OCTOBER, 2002 DECLARING INCOME OF RS.16,42,688/- W HICH INCLUDES LONG TERM CAPITAL GAIN (LTCG) OF RS.14,24,430/-. THE ASSESSE E HAS ALSO CLAIMED EXEMPTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). THE ASSESSEE DERIVED INCOME FROM THE BUSINESS OF RUNNIN G TRAVEL AGENCY IN THE NAME ITA NO.96/AGR/2011 A.Y. 2002-03 . 3 OF TRAVEL BUREAU. THE ASSESSEE FILED A REVISED RET URN DECLARING INCOME FROM CAPITAL GAIN AS INCOME FROM OTHER SOURCES. THE LTC G CLAIMED IN THE ORIGINAL RETURN ALONG WITH EXEMPTION UNDER SECTION 54F AND C APITAL GAIN AMOUNT OF RS.14,24,430/- WAS SURRENDERED AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER FINALLY COMPUTED THE TOTAL INCOME OF THE AS SESSEE AS UNDER:- WITH THE ABOVE REMARKS THE INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- INCOME FROM HOUSE PROPERTY AS SHOWN 78,2 81/- PROFIT FROM TRAVEL BUREAU 15,13,645/- ADD: DISALLOWED OUT OF DEP ON CAR 13,003/- DISALLOWED OUT OF EXPENSES ON CAR 11,376/- 15,38,026/- INTEREST FROM PARTNERSHIP FIRM M/S TRAVEL BUREAU 27,903/- INCOME FROM OTHER SOURCES REPRESENTING AMOUNT RECEI VED ON SALE OF SHARES ON SUMA FINANCE BUT SURRENDERED B Y 14,27,286/- THE ASSESSEE AS INCOME FROM OTHER SOURCES S PER REV ISED RETURN FILED. INTEREST FROM BANK 366/- INTEREST ON FDRS 31,429/- IDBI INTEREST 64/- ------------- 31,03,353/- LESS: DEDUCTION U/S 80-L 9,000/- --------------- 30,94,353/ 3. THE ASSESSING OFFICER IN THE PENALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT RECORDED THE FACTS THAT IN THE ORIGINAL RETURN OF INCOME THE ASSESSEE HAS SHOWN INCOME FROM LTCG RS.12,65,949/- ON SALE OF SHARES O F SUMO FINANCE & ITA NO.96/AGR/2011 A.Y. 2002-03 . 4 INVESTMENT COMPANY LIMITED AND CLAIMED DEDUCTION UN DER SECTION 54F OF THE ACT. THE ASSESSING OFFICER FURTHER NOTED THAT AFTER IT C AME TO THE NOTICE THAT THERE WAS NO ACTUAL SALE AND PURCHASE OF SHARES OF THIS COMPA NY .THE CASE OF THE ASSESSEE WAS REOPENED AND NOTICE UNDER SECTION 148 OF THE AC T WAS ISSUED. IN RESPONSE TO THIS NOTICE, THE ASSESSEE HAS FILED REVISED RETURN DECLARING TOTAL INCOME OF RS.30,67,118/- WHICH WAS FILED ON 27.09.2005. IN T HIS REVISED RETURN DEDUCTION UNDER SECTION 54F ORIGINALLY CLAIMED WAS WITHDRAWN BY THE ASSESSEE. THE PENALTY CASE WAS REVIEWED UNDER SECTION 263 OF THE ACT BY T HE COMMISSIONER OF INCOME TAX VIDE HIS ORDER DATED 29.03.2006 SETTING ASIDE T HE PENALTY ORDER TO BE MADE DENOVO. IN COMPLIANCE TO THE SAID ORDER OF THE CIT (A) PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WAS INITIATED AND SHOW CAUSE NOTI CE DATED 06.06.2006 WAS ISSUED. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE AS SESSEE HAS SHOWN OWN UNACCOUNTED MONEY AS INCOME FROM LTCG AND TRIED TO AVOID TAX BY CLAIMING EXEMPTION UNDER SECTION 54F OF THE ACT. THE ASSESS EE HIMSELF ADMITTED THE BOGUS ENTRIES OF LTCG AND SURRENDERED THE ENTIRE BOGUS IN COME FROM LTCG AS INCOME FROM OTHER SOURCES AS THE ASSESSEE WAS UNABLE TO EX PLAIN AND ESTABLISH THE GENUINENESS OF THE SALE TRANSACTION WHICH IS VERY M UCH CLEAR FROM THE FACT THAT THE ASSESSEE SUBMITTED THAT HE DOES NOT HAVE ANY DETAIL ED INFORMATION TO GIVE COMMON COMPLIANCE TO THE NOTICE UNDER SECTION 142(1) ISSUE D BY THE ASSESSING OFFICER AND DETAILED QUESTIONNAIRE. THE ASSESSING OFFICER RELI ED UPON THE JUDGMENT OF HONBLE ITA NO.96/AGR/2011 A.Y. 2002-03 . 5 HIGH COURT OF ORISSA IN THE CASE OF CIT VS. INDIAN METALS & FERRO ALLOYS LIMITED, 117 CTR 378 (ORI) AND HELD THAT THE ASSESSEE HAS FU RNISHED INACCURATE PARTICULARS OF HIS INCOME AND THEREBY THE ASSESSEE HAS CONCEALE D HIS CORRECT PARTICULARS. THE ASSESSING OFFICER LEVIED MINIMUM PENALTY OF RS.4,44 ,209/-. 4. THE CIT(A) CANCELLED THE PENALTY OBSERVING THAT THE SURRENDER WAS MADE BY THE ASSESSEE BEFORE ANY SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE AFTER CARRYING OUT INVESTIGATION BY THE ASSESSING OFFICER INTO THE GEN UINENESS OF SALE AND PURCHASE OF SHARE TRANSACTIONS. THOUGH IT HAS BEEN CLAIMED WHI LE RECORDING THE REASON FOR INITIATING PROCEEDINGS UNDER SECTION 147 THAT THE A .O. HAS INFORMATION IN HIS POSSESSION THAT THE SHARE TRANSACTION SHOWN BY THE ASSESSEE IS NOT GENUINE, NO SUCH DETAILS ARE RECORDED IN THE NOTE PREPARED FOR RECOR DING THE REASONS. THE CIT(A) FURTHER OBSERVED THAT IT IS VERY MUCH CLEAR THAT TH E ASSESSING OFFICER ONLY ACCEPTED THE AMOUNT SUNDERED BY THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH WAS EARLIER DECLARED UNDER THE HEAD CAPITAL GAIN WITHOUT MAKING ANY INVESTIGATION. THE CIT(A) FURTHER OBSERVED THAT ON LY ADDITION OF RS.2,856/- WAS MADE UNDER THE HEAD OTHER SOURCES BUT THE ASSESSI NG OFFICER DID NOT MAKE ANY DISCUSSION IN THE ASSESSMENT ORDER ABOUT THIS ADDIT ION. IT IS ALSO OBSERVED BY THE CIT(A) THAT THERE IS NO DISCUSSION IN THE ASSESSMEN T ORDER ABOUT THE POSITION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS EITHER CONC EALED THE PARTICULARS OF HIS ITA NO.96/AGR/2011 A.Y. 2002-03 . 6 INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE CIT(A) IN ORDER TO FIND OUT AS TO WHAT INFORMATION WAS AVAILABLE IN TH E POSSESSION OF THE ASSESSING OFFICER ON THE BASIS OF WHICH IT WAS FOUND THAT SHA RE TRANSACTION SHOWN BY THE ASSESSEE WAS NOT GENUINE AND WHICH FORMED THE BASIS REGARDING THE REASON FOR BELIEF BY THE ASSESSING OFFICER TO INITIATE PROCEED INGS UNDER SECTION 147 OF THE ACT. THE CIT(A) GONE THROUGH THE REASONS TO BELIEVE RECO RDED BY THE ASSESSING OFFICER ON 09.02.2004 AND THE SAME HAS BEEN REPRODUCED BY T HE CIT(A) IN HIS ORDER AT PAGE NOS.6 & 7. 5. ON THE BASIS OF REASONS RECORDED, THE CIT(A) NO TED THAT ONLY INFORMATION IN THE POSSESSION OF THE ASSESSING OFFICER WAS THAT TH E SHARES CLAIMED TO HAVE BEEN TRANSACTED UPON BY THE ASSESSEE WERE OF THE SAME CO MPANY IN WHICH CERTAIN ASSESSEES OF THE RANGE HAVE ACCEPTED THAT THE SHARE TRANSACTIONS WERE SHAM ONE. THE CIT(A) FURTHER NOTED THAT SUCH INFORMATION CAN ONLY BE SAID TO BE VAGUE AND UNSUBSTANTIATED UNLESS FULL DETAILS ARE AVAILABLE I N THE POSSESSION OF THE A.O. ABOUT THE NUMBER OF SHARES PURCHASED AND SOLD BY THE ASSE SSEE AND WITH THE EVIDENCES GATHERED FROM THE COMPANY WHOSE SHARES ARE TRANSACT ED AND BARKERS WHO WERE INVOLVED IN SUCH SALES AND PURCHASES OF SHARES, PRI MA FACIE EVIDENCE OF THESE SHARES TRANSACTIONS BEING SHAM ONE ARE DISCUSSED IN THE NOTE OF THE A.O. FOR RECORDING THE TREASONS TO BELIEVE. THE CIT(A) HELD THAT JUST ON THE BASIS OF THE ITA NO.96/AGR/2011 A.Y. 2002-03 . 7 INFORMATION OF OTHER ASSESSEES THAT THEY HAVE ENTER ED INTO SHAM TRANSACTION OF THE SHARE OF THE SAME COMPANY IN WHICH THE ASSESSEE HAS ALSO DONE THE TRANSACTION, IT CANNOT BE SAID THAT THE SALE AND PURCHASE OF THE SHARE TRANSACTION OF THE ASSESSEE IS ALSO NOT GENUINE. THE CIT(A) FURTHER HELD THAT SUC H DETAILS WERE IN THE POSSESSION OF THE A.O., HE WOULD HAVE CERTAINLY DISCUSSED THES E DETAILS IN THE ASSESSMENT ORDER AND ARRIVED TO THE CONCLUSION THAT THE TRANSA CTION OF THESE SHARES WERE SHAM ONE AND THEN RECORDED HIS SATISFACTION THAT THE ASS ESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF S UCH INCOME AND THEN ADDED THE AMOUNT OF SALE PROCEED OF THE SHARES IN THE INCOME OF THE ASSESSEE BY REJECTING THE REVISED INCOME SHOWN BY THE ASSESSEE IN THE RETURN FILED UNDER SECTION 148 OF THE ACT. THE CIT(A) FOUND THAT NO SUCH ACTION WAS TAKE N BY THE ASSESSING OFFICER WHICH IS CLEAR FROM THE ASSESSMENT ORDER IN WHICH T HE ASSESSING OFFICER ACCEPTED THE REVISED RETURN OF THE ASSESSEE WITHOUT DISCUSSI NG ANYTHING ABOUT THE INFORMATION IN POSSESSION RELATING TO SHAM SHARE TR ANSACTION. THE CIT(A) RELIED UPON THE JUDGMENT OF HONBLE HIGH COURT OF DELHI IN THE CASE OF SHRI BHAGWAN FINANCE CO. LTD. VS. CIT, 280 ITR 412 (DEL) WHERE T HE A.O. HAD COMPLETED THE ASSESSMENT AND INITIATED PENALTY PROCEEDINGS ON THE SAME DAY WITHOUT RECORDING SATISFACTION. IT WAS HELD BY THE DELHI HIGH COURT THAT THIS WAS NOT PERMISSIBLE. THIS WAS JURISDICTIONAL DEFECT WHICH CANNOT BE CURE D AND HENCE THE COURT HELD THAT THE PENALTY UNDER SECTION 271(1)(C) WAS NOT JUSTIFI ED. CIT (A) DRAW THE INFERENCE ITA NO.96/AGR/2011 A.Y. 2002-03 . 8 THAT DUE TO THE RATIO LAY DOWN BY THE DELHI HIGH CO URT, THE ASSESSING OFFICER DROPPED THE PENALTY PROCEEDINGS INITIATED BY HIS OR DER DATE 31.03.2005. HOWEVER, LATER ON THIS PENALTY ORDER WAS SET ASIDE BY THE CI T(A) UNDER SECTION 263 OF THE ACT AND DIRECTED THE A.O. TO PASS A DENOVO PENALTY ORDE R. THE CIT(A) HAS ALSO OBSERVED THAT IN VARIOUS CASES IT HAS BEEN HELD THA T PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND INDEPENDENT THE REFROM IN AS MUCH AS THE ASSESSMENT PROCEEDINGS ARE TAXING PROCEEDINGS AND T HE PENALTY PROCEEDINGS ARE QUASI-CRIMINAL PROCEEDINGS IN THEIR VERY NATURE. T HE CIT(A) IN SUPPORT OF THIS PROPOSITION RELIED UPON VARIOUS JUDGMENTS NOTED AT PAGE NO.8 OF HIS ORDER. THE CIT(A) NOTED THAT THE ASSESSING OFFICER IN HIS ORDE R NOWHERE DISCUSSED IN DETAIL OR EVIDENCE GATHERED BY HIM ON BASIS OF WHICH HE ARRIV ED TO THE CONCLUSION THAT THE SHARE TRANSACTIONS SHOWN BY THE ASSESSEE ARE SHAM O NE. THE CIT(A) HAS ALSO NOTED THE SUBMISSION OF THE ASSESSEE WHETHER THE A.O. HAS ISSUED ANY QUESTIONNAIRE PRIOR TO THE DECLARATION MADE BY THE ASSESSEE AND WHETHER THERE WAS ANY EVIDENCE AVAILABLE WITH THE A.O. THAT THE SHARE TRANSACTIONS SHOWN BY THE ASSESSEE ARE NOT GENUINE AND FORCING HIM TO SURRENDER. THE CIT(A) N OTED THAT THE A.O. HAS NOT CORRECTLY NOTED THE FACTS THAT THE ASSESSEE HAS DEN IED ABOUT THE INFORMATION IN COMPLIANCE NOTICE UNDER SECTION 142(1) OF THE ACT. THE CIT(A) FOUND THAT AS PER NOTE APPENDED BY THE ASSESSEE ALONG WITH THE RETURN FILED UNDER SECTION 148, NOWHERE THE ASSESSEE HAS WRITTEN THIS LINE THAT THE DETAILS ARE NOT AVAILABLE. THE ITA NO.96/AGR/2011 A.Y. 2002-03 . 9 ASSESSEE HAS ONLY WRITTEN THAT THE ASSESSEE DOES NO T WANT TO GO INTO LITIGATION FOR EVIDENCE AND PROOF OF SALE/PURCHASE OF SHARES. HE NEVER SAID THAT HE DOES NOT HAVE ANY DETAIL/INFORMATION TO BE GIVEN IN COMPLIANCE TO NOTICE UNDER SECTION 142(1) OF THE ACT. THE CIT(A) WAS ALSO OF THE VIEW THAT THE A.O. WAS FREE TO TAKE ACTION BY COLLECTING THE NECESSARY EVIDENCE REGARDING SHAM TR ANSACTION OF SHARES ALLEGED TO HAVE BEEN ENTERED INTO BY THE ASSESSEE AND ISSUE QU ESTIONNAIRE UNDER SECTION 142(1) GIVING HIM SHOW CAUSE NOTICE AS TO WHY HIS S HARE TRANSACTION SHOULD NOT BE CONSIDERED AS SHAM ONE BUT NO SUCH ACTION WAS TAKEN BY THE A.O. THE CIT(A) FOUND THAT EVEN IN PENALTY PROCEEDINGS, THE A.O. DI D NOT TAKE ANY PAIN TO COLLECT EVIDENCE TO PROVE SHARE TRANSACTION BEING SHAM ONE. THE CIT(A) ALSO DEALT WITH THE DECISION RELIED UPON BY THE ASSESSING OFFICER I N THE CASE OF CIT VS. INDIA METALS & FERRO ALLOY LIMITED. THE CIT(A) NOTED THA T THE A.O. AFTER QUESTIONING, IMMEDIATELY ARRIVED TO THE CONCLUSION THAT THE ASSE SSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE A.O. DID NOT POINT OUT WHAT INACCURATE PARTICULARS WERE FURNISHED BY THE ASSESSEE AND WHAT DETAILS WER E AVAILABLE WITH THE A.O., WHICH WERE CONSIDERED BY THE A.O. TO ARRIVE AT THE CONCLUSION THAT THE SHARE TRANSACTION SHOWN BY THE ASSESSEE WERE SHAM ONE. T HE CIT(A) ALSO GONE THROUGH VARIOUS DECISIONS CITED BY THE ASSESSEE IN THE CASE S OF KM. RUCHI RATHORE (ITA NO.97/AGR/2007), DR. S.D. MAURYA (ITA NO 619/AGR/20 08) AND R.C. MISHRA (ITA NO.189/AGR/2008). IN ANOTHER CASE OF SUSHIL CHAND GUPTA (ITA NO.85/AGR/2009), ITA NO.96/AGR/2011 A.Y. 2002-03 . 10 THE CIT(A) NOTED THAT IN THE SAID CASE THE ASSESSEE FILED REVISED RETURN AFTER ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT DEC LARING INCOME UNDER THE HEAD OTHER SOURCES WHICH WAS ALSO DECLARED AS CAPITAL GA IN BUT NO SHOW CAUSE NOTICE WAS ISSUE BY THE ASSESSEE FOR BOGUS TRUNCATION. THE I .T.A.T. CONFIRMED THE ORDER OF CIT(A) CANCELING THE PENALTY, FOLLOWING THE DECISIO N IN CASE OF KM. RUCHI RATHORE (SUPRA). THE CIT(A) HELD THAT INSPITE OF COVERED I SSUE IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I.T.A.T., AGRA BENCH, AND AS PER THE D ETAILED DISCUSSIONS MADE IN PARAGRAPH NOS.4.10 & 4.11 FOUND THAT NO MATERIAL HA S BEEN DISUSED BY THE ASSESSING OFFICER EITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY ORDER ESTABLISHING THAT THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULAR OF SUCH INCOME. EV EN WHILE INITIATING PENALTY PROCEEDINGS, NO SATISFACTION HAS BEEN RECORDED. 6. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS WRONGLY CLAIMED LTCG AND EXEMPTION UNDER SECTION 54F OF THE ACT IN THE ORIGINAL RETURN. ON ENQUIRY BY THE DEPARTMENT, IT WAS FOUND THAT THE ASSESSEE HAS SHOWN LTCG AND CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT ON BOGUS SHARE TRANSACTIONS. THE CA SE OF THE ASSESSEE WAS REOPENED FOR RECORDING REASONS ON 09.02.2004. A NOTICE UNDE R SECTION 148 OF THE ACT WAS ITA NO.96/AGR/2011 A.Y. 2002-03 . 11 ISSUED ON 09.02.2004 WHEREAS THE REVISED RETURN WAS FILED ON 27 TH SEPTEMBER, 2005. 7. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HE ASSESSEE HAS SURRENDERED INCOME WHEN IT WAS CORNERED BY THE DEPARTMENT. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) WITHOUT APPRECIATING THE FACTS CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCLOSED THE INCOME BEFORE D ETECTION BY THE DEPARTMENT WHEREAS THE ASSESSING OFFICER HAS CLEARLY BROUGHT O N RECORD AFTER ELABORATE DISCUSSIONS ON THE INCOME SURRENDERED WAS IN COMPLI ANCE TO THE NOTICE UNDER SECTION 148 OF THE ACT AND, THEREFORE, THE SURRENDE R WAS NOT VOLUNTARY. LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE CIT(A) IS NOT CORRECT IN NOTING THE FACT THAT THE A.O. WAS NOT HAVING SUFFIC IENT EVIDENCE REGARDING CONCEALED INCOME. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE REASONS RECORDED WHICH ITSELF SUPPORTED BY SUFFICIENT EVIDE NCE. THE ASSESSEE HAS SURRENDERED THE INCOME ONLY IN RESPONSE TO NOTICE U NDER SECTION 148 OF THE ACT. THE ASSESSEE HIMSELF HAS DECLARED INCOME FROM LTCG TO INCOME FROM OTHER SOURCES. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE CIT(A) HAS NOT CONSIDERED THE JUDGEMENTS CITED IN GROUND NO.3 & 4 OF REVENUES APPEAL. ITA NO.96/AGR/2011 A.Y. 2002-03 . 12 8. THE LD. AUTHORISED REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE CIT(A) HAS CONSIDE RED ALL THE IMPORTANT FACTS BEFORE CANCELLING THE PENALTY LEVIED BY ASSESSING O FFICER UNDER SECTION 271(1)(C) OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE SUBM ITTED THAT ON IDENTICAL SET OF FACTS, THE I.T.A.T., AGRA BENCH IN THE CASES WHICH WERE DISCUSSED BY CIT(A), PENALTY HAVE BEEN CANCELLED AT THE TIME OF HEARING ON 30.05.2012.DURING THE COURSE OF HEARING THE BENCH POINTED OUT TO THE LD. AUTHORISED REPRESENTATIVE THAT IN SUCH TYPE OF CASES RECENTLY I.T.A.T., AGRA BENC H HAS TAKEN A VIEW CONSIDERING ALL THE RELEVANT JUDGMENTS AND ORDERS OF I.T.A.T., AGRA BENCH. THE LD. AUTHORISED REPRESENTATIVE WAS DIRECTED TO MAKE HIS SUBMISSION, IF ANY, IN RESPECT OF THE SAID ORDER OF I.T.A.T. IN THE CASE OF MUKESH KUMAR AGARW AL, HUF VS. DEPARTMENT OF INCOME TAX, ITA NO.178/AGR/2011 AND THE HEARING WAS ADJOURNED FROM 30.5.2012 TO 31.05.2012. THE LD. AUTHORISED REPRESENTATIVE P OINTED OUT THAT THE FACTS OF THE CASE OF MUKESH KUMAR AGARWAL, HUF AND FACTS OF THE CASE UNDER CONSIDERATION ARE DIFFERENT. IN THE SAID CASE, THE REASSESSMENT PROCEEDINGS WERE INITIATED AND DESPITE SERVICE OF NOTICE NO RETURN WAS FILED. IN THAT CASE, THE ASSESSING OFFICER UNDERTOOK INITIAL ENQUIRY TO ESTABLISH ON RECORD AN D ALSO ISSUED SOME SHOW CAUSE NOTICE THAT SHARE CLAIM TO HAVE BEEN SOLD BY THE AS SESSEE WERE SHAM TRANSACTIONS. THE SHOW CAUSE NOTICE WAS ISSUED PRIOR TO SURRENDER IN THE SAID CASE. THE INFORMATION RECEIVED WAS ALSO COGENT INFORMATION AN D DETAILS IN RESPECT OF THAT ITA NO.96/AGR/2011 A.Y. 2002-03 . 13 WERE RECORDED IN THE ORDER SHEET ITSELF. THE LD. A UTHORISED REPRESENTATIVE SUBMITTED THAT IN THAT CASE, SURRENDER WAS MADE ONL Y WHEN ALL INFORMATION WAS SHOWN AND WAS CORNERED BY THE DEPARTMENT WHEREAS IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAS FURNISHED THE REVISE D RETURN SURRENDERING THE LTCG AS INCOME FROM OTHER SOURCES BEFORE ANY ENQUIRY CON DUCTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ACCEPTED THE RE VISED RETURN IN TOTO. HE FURTHER SUBMITTED THAT IN THE CASE UNDER CONSIDERATION, THE ASSESSING OFFICER DID NOT CHARGE EVEN INTEREST UNDER SECTION 234A OF THE ACT. THE LD . AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ORDERS REFERRED BY THE I.T.A.T. AGRA BENCH IN THE CASE OF MUKESH KUMAR AGARWAL, HUF ARE DISTINGUISHABLE ON FA CTS. 9. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CRUX OF THE ISSUE TO BE DECIDED IN THIS APPEAL WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE SURRENDER OF INCOME B Y THE ASSESSEE BY FILING REVISED RETURN AT THE TIME OF ASSESSMENT PROCEEDINGS IS VOL UNTARY SURRENDER OF THE INCOME OR REVISED RETURN FILED WAS A BONAFIDE SURRENDER OF INCOME IN VIEW OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE PROCEEDINGS UNDER SECTION 271(1) (C) CAN BE INITIATED ONLY IF THE A.O OR THE FIRST APPELLATE AUTHORITY IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT AS PER CLAUSE (C) OF THE SECTION 271(1) THAT ANY PERSON HAS CONCEALED THE PA RTICULARS OF HIS ITA NO.96/AGR/2011 A.Y. 2002-03 . 14 INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF S UCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE SUM MENTIONED IN SUB-CLAUSE (III) OF CLAUSE (C) OF THE SECTION 271(1 ). THE EXPRESSION USED IN CLAUSE (C) OF THE SECTION 271(1) IS HAS CONCEAL ED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUC H INCOME. THE EXPRESSIONS HAS CONCEALED THE PARTICULARS OF INCOM E AND HAS FURNISHED INACCURATE PARTICULARS OF INCOME HAVE NOT BEEN DEF INED EITHER IN SECTION 271(1)(C) OR ELSEWHERE IN THE ACT. TWO WORDS ARE IM PORTANT WORDS FOR CONSIDERING A MATTER FOR LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE ACT. THESE WORDS ARE CONCEAL AND INACCURATE PAR TICULARS THE WORD CONCEAL IS DERIVED FROM THE LATIN CONCELARE WHICH IMPLIES CON+CELARE TO HIDE. WEBSTER IN HIS NEW INTERNATIONAL DICTIONARY E QUATES ITS MEANING 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 ITE M OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME-TA X AUTHORITIES. IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEE N DEFINED AS UNDER: 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRAN SCRIPT ITA NO.96/AGR/2011 A.Y. 2002-03 . 15 9.1 IN ADDITION TO MAIN PROVISIONS OF CONCEALMENT HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCU RATE PARTICULARS OF SUCH INCOME THERE ARE DEEMED TO REPRESENT THE INCO ME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED .THE DEEMED C ONCEALMENT IS PROVIDED IN EXPLANATIONS. THE PENALTY UNDER THE SAI D SECTION IS A CIVIL LIABILITY. WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING THE CIVIL LIABILITY. WHILE CONSIDERING AN APPEAL AG AINST AN ORDER MADE UNDER SECTION 271(1)(C) WHAT IS REQUIRED TO BE EXAM INED IS THE RECORD WHICH THE OFFICER IMPOSING THE PENALTY HAD BEFORE H IM AND IF THAT RECORD CAN SUSTAIN THE FINDING THERE HAD BEEN CONCEALMENT, THAT WOULD BE SUFFICIENT TO SUSTAIN THE PENALTY. THE EXPLANATIONS ADDED TO SECTION 271(1)(C) IN THAT ENTIRETY ALSO INDICATE THE ELEMEN T OF STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURA TE PARTICULARS WHILE FILING RETURNS. IT IS OBVIOUS THAT THE PENAL PROVIS IONS WOULD OPERATE WHEN THERE IS CONCEALMENT OF PARTICULARS OF INCOME OR A FAILURE OF DUTY TO DISCLOSE FULLY AND TRULY PARTICULARS OF INCOME, IMP OSED UNDER THE ACT AND THE RULES THERE UNDER. THE INCOME TAX IS COLLECTING FROM TAXPAYERS WHO ARE HAVING TAXABLE INCOME FOR WELFARE OF THE STATE. EVERY CITIZEN IS DUTY BOUND TO PAY THE TAX ON HIS CORRECT TAXABLE INCOME. THE INCOME TAX IS PAYABLE ON ANNUALLY ON ANNUAL TAXABLE INCOME THAT M EANS THIS IS YEARLY ITA NO.96/AGR/2011 A.Y. 2002-03 . 16 DUTY OF THE TAXPAYERS. UNDER THE CIRCUMSTANCE SOME TIME TAXPAYERS AGREE TO CERTAIN ADDITIONS DURING ASSESSMENT PROCEEDINGS NOT ALWAYS BECAUSE THEY ARE CONVINCED THAT SUCH ADDITION IS WARRANTED OR OTHERWISE JUSTIFIED, BUT WITH A VIEW TO BRING FINALITY TO THE WHOLE MATT ER TO PURCHASE PEACE AND AVOID LITIGATION. THE GENERAL VIEW HAS ALWAYS BEEN THAT MERE ADMISSION BY ITSELF NEED NOT OFFER IMMUNITY TO THE TAXPAYER, WHERE THE ADMISSION HAS BEEN EXTORTED FROM HIM AFTER CONCEALM ENT HAD BEEN BROUGHT HOME. THE DUTY IS ENJOINED UPON A PERSON TO MAKE A CORRECT AND COMPLETE DISCLOSURE OF PARTICULARS OF HIS INCOME AN D IT IS ONLY WHEN HE FAILS IN HIS DUTY BY NOT DISCLOSING PARTICULARS OF HIS INCOME OR PART THEREOF, HE CONCEALS THE PARTICULARS OF HIS INCOME. THE DUTY IS ENJOINED UPON HIM TO MAKE A COMPLETE DISCLOSURE OF PARTICULA RS OF HIS INCOME AS WELL AS A CORRECT DISCLOSURE. THEREFORE, IF THE DIS CLOSURE MADE OF THE PARTICULARS OF INCOME IS INCORRECT, THEN ALSO HE CO MMITS BREACH OF HIS DUTY. SUCH DEFAULTS ENTAIL THE PENAL CONSEQUENCES C ONTEMPLATED BY SECTION 271(1) (C). 9.2 AS STATED ABOVE THAT THE DUTY IS ENJOINED U PON THE ASSESSEE TO MAKE A COMPLETE DISCLOSURE OF PARTICULARS OF HIS IN COME AS WELL AS A CORRECT DISCLOSURE. THUS MERELY FILING REVISED RETU RN IT HAD NO BASIS OF ITA NO.96/AGR/2011 A.Y. 2002-03 . 17 IMMUNITY FROM THE CONCEALMENT PENALTY. WHAT IMPORTA NT THINGS TO BE SEEN ARE WHETHER THE ASSESSEE MAKES A COMPLETE DISC LOSURE OF PARTICULARS OF HIS INCOME AS WELL AS A CORRECT DISCLOSURE? THIS ASPECT CAN BE EXAMINED ONLY CONSIDERING THE FACTS OF EACH CASE. 9.3 IN THE LIGHT OF ABOVE BACK GROUND OF DISCUSS IONS LET US SEE SOME CASES OF FILING REVISED RETURN OR VOLUNTARILY SURRE NDER OF INCOME AND PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WHICH A RE AS UNDER:- 9.4 WHERE ASSESSEE HAD FILED REVISED RETURN SURREND ERING UNDISCLOSED INCOME ONLY ON COMING TO KNOW ABOUT DETECTION OF CO NCEALMENT BY THE DEPARTMENT, IT WAS NOT A CASE OF BONA FIDE VOLUNTAR Y DISCLOSURE AND HENCE PENALTY UNDER S. 271(1)(C) WAS IMPOSABLE. RAJESH C HAWLA VS. CIT (2006) 203 CTR (P&H) 209. IN THIS CASE DECISION IN PADAM KUMAR GARG VS. ITO & ANR. (2005) 26 IT REP 26 (P&H) WAS FOLLOWED A ND DECISIONS IN P.C. JOSEPH & BROS. VS. CIT (2000) 158 CTR (KER) 10 4: (2000) 240 ITR 818 (KER) AND CIT VS. SUDHARSHAN SILKS & SAREES (20 01) 171 CTR (KAR) 256 : (2002) 253 ITR 145 (KAR) WERE RELIED ON AND D ECISIONS IN SIR SHADI LAL SUGAR & GENERAL MILLS VS. CIT (1987) 64 CTR (SC ) 199: (1987) 168 ITA NO.96/AGR/2011 A.Y. 2002-03 . 18 ITR 705 (SC) AND CIT VS. SURESH CHANDRA MITTAL (200 1) 170 CTR (SC) 182: (2001) 251 ITR 9 (SC) WERE DISTINGUISHED. 9.5 WHERE THE ASSESSEE HAS OFFERED ADDITIONAL INCOM E, ASSESSEE CANNOT OBJECT TO THE CONSIDERATION OF THE SAME INCOME FOR PENALTY PURPOSES AS HELD IN S.S. RATANCHAND BHOLANATH VS. CIT (1995) 12 4 CTR (MP) 28: (1994) 210 ITR 682 (MP) . IN KRISHNA KUMAR CHAMANL AL VS. CIT (1995) 127 CTR (BOM) 458: (1996) 217 ITR 645 (BOM) ALSO I T WAS HELD THAT PENALTY CAN BE LEVIED EVEN WHEN ADDITION IS AGREED. 9.6 IN CIT VS. MOHD. MOHTRAM FAROOQUI (2002) 177 CT R (RAJ) 434 IT WAS HELD THAT DISCLOSURE OF INCOME IN THE REVISED RETURN AFTER SEIZURE OF UNEXPLAINED CASH FROM THE ASSESSEE CANNOT BE SAID TO BE A VOLUNTARY DISCLOSURE AND, THEREFORE, LEVY OF PENALTY UNDER S. 271(1)(C) WAS JUSTIFIED IN THE ABSENCE OF SATISFACTORY EXPLANATION FOR THE SEIZED CASH. 9.7 M.S. MOHAMMED MARZOOK (LATE) (REPRESENTED BY UH ) & ANR. VS. ITO (2006) 283 ITR 254 (MAD) IN THIS CASE REVISED R ETURN WAS FILED AFTER SEARCH AND OMISSION OR WRONG STATEMENT IN THE ORIGI NAL RETURN WAS NOT BONA FIDE OR DUE TO INADVERTENCE OR MISTAKE ON THE PART OF ASSESSEE. ITA NO.96/AGR/2011 A.Y. 2002-03 . 19 9.8 IN RAVI & CO. VS. ASSTT. CIT (2004) 271 ITR 286 (MAD) IT WAS HELD THAT THOUGH THE ASSESSEE HAS FILED A REVISED RETURN , UNLESS THE ASSESSEE CAN SHOW THAT THE SAME WAS FILED VOLUNTARILY, PENAL TY WAS IMPOSABLE FOR CONCEALMENT OF INCOME. 9.9 IN CIT VS. DR. A. MOHD. ABDUL KHADIR (2003) 260 ITR 650 (MAD) PENALTY UNDER S. 271(1)(C) WAS HELD JUSTIFIED IN SP ITE OF FILING OF REVISED RETURN WHEN SUCH REVISED RETURN COULD NOT BE SAID T O BE VOLUNTARY IN VIEW OF FACTS THAT IT WAS FILED AFTER SEARCH OPERATIONS HAD TAKEN PLACE AND AFTER THE ACCOUNTANT OF ASSESSEE HAD MADE ADMISSION ABOUT CONCEALMENT. WHERE REVISED RETURN DECLARING ENHANCED INCOME WAS FILED AFTER SEARCH PROCEEDINGS AND OMISSION TO INCLUDE EXTRA INCOME IN THE ORIGINAL RETURN WAS NOT DUE TO ANY BONA FIDE MISTAKE, LEVY OF PENAL TY UNDER S. 271(1)( C) WAS JUSTIFIED. (M. SHAHUL HAMEED BATCHA VS. ITO (20 07) 292 ITR 585 (MAD)] 9.10 IN P.C. JOSEPH & BROS. VS. CIT (2000) 158 CTR (KER) 104 IT WAS HELD THAT WHERE THE SURRENDER OF INCOME IN THE REVI SED RETURN IS NOT VOLUNTARY BUT IS AS A RESULT OF DETECTION BY ASSESS ING AUTHORITY, THE FILING OF REVISED RETURN IS OF NO CONSEQUENCE. SIMPLY BEC AUSE ASSESSEE AGREED ITA NO.96/AGR/2011 A.Y. 2002-03 . 20 TO ADDITION OF CONCEALED INCOME AFTER DETECTION THE REOF BY SPREADING THE AMOUNT OVER FOUR YEARS AND FILED RETURNS IN RESPONS E TO NOTICE UNDER S. 148 OFFERING ADDITIONAL INCOME, IT CANNOT ESCAPE PE NALTY UNDER S. 271(1)(C). SIMILAR VIEW HAS BEEN TAKEN IN DEEPAK C ONSTRUCTION COMPANY VS. CIT (2007) 208 CTR (GUJ) 444 IN WHICH I T WAS HELD THAT SINCE AO HAD DETECTED CONCEALMENT OF INCOME BY THE ASSESSEE BEFORE SHOW-CAUSE NOTICE, ASSESSEE WAS NOT ENTITLED TO BEN EFITS OF THE AMNESTY SCHEME IN RESPECT OF ADDITIONAL INCOME DECLARED BY IT IN THE REVISED RETURN WHICH WAS FILED PURSUANT TO SAID SHOW-CAUSE NOTICE AND, THEREFORE, LEVY OF PENALTY UNDER S. 271 (1)(C) WAS JUSTIFIED. 9.11 IN JYOTI LAXMAN KONKAR VS. CIT (2007) 209 CTR (BOM) 5 THE ASSESSEE HAD FILED REVISED RETURN DISCLOSING ADDITI ONAL INCOME AFTER DISCREPANCY WAS DETECTED IN THE STOCK DURING SURVEY UNDER S. 153A AND THE AO ACCEPTED THE REVISED RETURN BUT IMPOSED PENA LTY UNDER S. 271(1)(C) ON THE BASIS THAT SAID INCOME HAD BEEN SU PPRESSED BY THE ASSESSEE. IT WAS HELD THAT IMPOSITION OF PENALTY WA S JUSTIFIED SINCE REVISED RETURN HAD BEEN FILED UNDER COMPULSION ARIS ING FROM DETECTION DURING SURVEY. ITA NO.96/AGR/2011 A.Y. 2002-03 . 21 9.12 IN SMT. B. INDIRA RANI VS. CIT (2003) 183 CTR (KER) 399 : (2003) 263 ITR 525 (KER) SINCE ASSESSEE HAD MADE DISCLOSUR E IN RESPECT OF UNEXPLAINED INVESTMENTS IN VEHICLES AND IMMOVABLE P ROPERTIES ONLY AFTER A SEARCH WAS CONDUCTED AT HER PREMISES WITHOUT OFFE RING ANY ACCEPTABLE EXPLANATION, TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THERE WAS CONCEALMENT IRRESPECTIVE OF THE FACT THAT THE ADDITIONS MADE IN THE ASSESSMENTS WERE ONLY OF INCOME FROM OTHER SOURCES. 9.13 ASSESSEE HAVING WILLFULLY ENHANCED THE LOSSES BY NOT OFFERING AN AMOUNT TO TAX AND BY CLAIMING WRONG DEDUCTION UNDER S. 80HHC, AND OFFERED THESE AMOUNTS TO TAX ONLY IN RESPONSE TO NO TICE UNDER S. 148, THERE WAS CONCEALMENT ATTRACTING PENALTY UNDER S. 2 71(1)(C). [CIT VS. CHEMIEQUIP LTD. (2003) 182 CTR (BOM) 144]. 9.14 WHERE ORIGINAL RETURN IS NEITHER UNDER S. 139( 1) OR UNDER S. 139(2) BUT IS A RETURN FILED UNDER S. 139(4) WHICH COULD N OT HAVE BEEN REVISED UNDER S. 139(5) AS HELD BY THE SUPREME COURT IN THE CASE OF KUMAR JAGDISH CHANDRA SINHA VS. CIT (1996) 133 CTR (SC) 1 43 : (1996) 220 ITR 67 (SC).THE ASSESSEE CANNOT GET ANY ADVANTAGE O R BENEFIT OF REVISED RETURN FILED BY HIM IN RELATION TO IMPOSITION OF PE NALTY FOR CONCEALMENT ITA NO.96/AGR/2011 A.Y. 2002-03 . 22 IN THE ORIGINAL RETURN FILED UNDER S. 139(4). THIS WAS HELD BY ALLAHABAD HIGH COURT IN SMT. KUSUM JAISWAL VS. CIT (2005) 193 CTR (ALL) 651 : (2005) 273 ITR 369 (ALL). 9.15 GUJARAT HIGH COURT IN THE CASE OF LMP PRECISIO N ENGG. CO. LTD. VS. DCIT, 330 ITR 93 (GUJ) HELD AS UNDER (PAGE NOS. 101 & 102 }:- THE LAW ON THE SUBJECT OF TREATING A REVISED RETUR N OF INCOME AS VOLUNTARY OR OTHERWISE IS WELL SETTLED. MERELY BECAUSE A RETURN IS REVISED THAT FACT BY ITSELF CAN NOT LEAD TO ANY PRESUMPTION AS TO CONCEALMENT IN THE ORIGINAL R ETURN OF INCOME, BECAUSE THE LEGISLATURE ITSELF HAS PROVIDED FOR FURNISHING A REVISED RETURN IN CASE OF ANY OMISSION IN THE ORIGINAL RETURN. ALBEIT SUCH OMISSION HAS TO BE IN ADVERTENT AND BONA FIDE. IF THE OMISSION IS INTENTIONAL THE REVISED RETURN CANNOT ABSOLVE AN ASSESSEE. THE FACT THAT T HE DEPARTMENT HAS INITIATED CERTAIN INQUIRIES PER SE W OULD NOT BE SUFFICIENT TO TREAT THE REVISED RETURN AS NOT BE ING VOLUNTARY. THIS WOULD DEPEND ON THE FACTS OF EACH CASE CONSIDERING THE STAGE AT WHICH THE INVESTIGATION HA S PROGRESSED, THE SUBJECT-MATTER OF INVESTIGATION BY THE DEPARTMENT, AND THE EVIDENCE AVAILABLE IN THE COURS E OF SUCH INVESTIGATION. IF THE AFORESAID PRINCIPLES ARE APPLIED TO THE FACT S OF THE CASE, IT CAN SAFELY BE NOTED THAT THE OVERALL CONDU CT OF THE ASSESSEE DOES NOT INDICATE THAT THE REVISED RETURNS WERE FILED VOLUNTARILY AND IN GOOD FAITH. IN FACT, THE FIRST DISCLOSURE ON OCTOBER 20, 1988, CAME IN PURSUANCE OF THE INQUIRIE S UNDERTAKEN BY THE DDIT (INV), MUMBAI AND AFTER STAT EMENT OF CHAIRMAN AND MANAGING DIRECTOR IN RELATION TO THE S UBJECT- MATTER OF PURCHASES BEING RECORDED ON SEPTEMBER 21, 1988. FOR THE ASSESSMENT YEAR 1985-86, THE ASSESSEE, BY I TS VERY CONDUCT, ACTED CONTRARY TO ITS OWN STAND OF THE REV ISED RETURN BEING VOLUNTARY WHEN THE ASSESSEE ITSELF REVISED TH E REVISED ITA NO.96/AGR/2011 A.Y. 2002-03 . 23 RETURN UNDER LETTER DATED MARCH 30, 1990, BY DISCLO SING A FURTHER SUM OF RS.78 LAKHS AND ODD. IT IS TRUE THA T MERE FACT OF NOT CHALLENGING THE ASSESSMENT ORDER PER SE WOUL D NOT BE INDICATIVE OF ANY ACCEPTANCE THAT THERE WAS CONCEAL MENT OF INCOME, BUT IN THE FACTS OF THE PRESENT CASE, THE S AID FACT OF THE ASSESSEE NOT HAVING CHALLENGED ANY OF THE ASSES SMENT ORDERS FOR THE THREE YEARS UNDER CONSIDERATION, AS SUMES SIGNIFICANCE. THIS FACT ON ITS OWN, AS A SOLITARY FACTOR MAY NOT BE SUFFICIENT ABUT READ IN CONJUNCTION WITH OVE RALL CONDUCT OF THE ASSESSEE WOULD DEFINITELY BE A POINT ER TO THE FACTUM OF THE ASSESSEE HAVING INDULGED IN AN ACT OF CONCEALMENT OF INCOME IN THE FORM OF UNVERIFIABLE PURCHASES. 9.16 AN ASSESSEE MAY FILE MORE THAN ONE RETURN. TH E FIRST RETURN MAY BE EITHER A REGULAR RETURN OR A BELATED RETURN. THE V IEW THAT IS GENERALLY TAKEN IS THAT THE DEFAULT SHOULD BE TREATED AS HAVI NG OCCURRED IN THE ORIGINAL RETURN THOUGH THE SAME DEFAULT MAY BE REPE ATED IN THE REVISED RETURN. THIS ISSUE MAY INDIRECTLY BE TAKEN AS SETTL ED BY THE SUPREME COURT IN CIT VS. ONKAR SARAN & SONS (1992) 103 CTR (SC) 293 : (1992) 195 ITR 1 (SC). 9.17 ALLAHABAD HIGH COURT IN THE CASE OF SMT. KUSUM JAISWAL VS. CIT, 273 ITR 369 (ALL) HELD AS UNDER:- [ PAGE NO. PAGE 3 75} :- IT MAY BE MENTIONED HERE THAT THE APPLICANT CANNOT GET ANY ADVANTAGE OR BENEFIT OF THE REVISED RETURN FILE D BY HER INASMUCH AS THE ORIGINAL RETURN, WHICH WAS FILED, W AS NEITHER UNDER SECTION 139(2) NOR UNDER SECTION 139(1) BUT W AS A RETURN FILED UNDER SECTION 139(4) OF THE ACT WHICH COULD NOT ITA NO.96/AGR/2011 A.Y. 2002-03 . 24 HAVE BEEN REVISED AS HELD BY THE APEX COURT IN THE CASE OF KUMAR JAGDISH CHANDRA SINHA V. CIT [1996] 220 ITR 6 7. MOREOVER, THE CONCEALMENT HAD ALREADY BEEN DETECTED BY THE INCOME- TAX OFFICER AT THE TIME WHEN THE RETURN DEC LARING NIL INCOME WAS FILED. 9.18 THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX, AHMEDABAD V. RELIANCE PETROPRODUCTS (P.) LTD 322 IT R 158 (SC) WHEREIN IT WAS HELD AS UNDER:- WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PART ICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE W ORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORREC T, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DET AILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCO RRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 2 71(1)( C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT S USTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING IN ACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 9.19 D.C.I.T. 4 (1) VS. MUKESH KUMAR AGARWAL, HUF, ITA NO. 178/AGRA/2011 ASSTT. YEAR : 2002-03 ORDER DATED 11. 5.2012. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE M ATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE FILE D ORIGINAL RETURN OF INCOME ON 07.08.2002 DECLARING INCOME OF RS.7,98,95 0/- ON ACCOUNT OF LONG TERM CAPITAL GAINS ON SELLING THE SHARES OF M/S. CAPITAL TRADE LINK LTD. THE SAID SHARES WERE STATED TO BE SOLD TH ROUGH THE BROKER M/S. NORTH INDIA SECURITIES PVT. LTD., NEW DELHI. O N GETTING ITA NO.96/AGR/2011 A.Y. 2002-03 . 25 INFORMATION OF BOGUS TRANSACTION OF SHARES, THE AO ISSUED NOTICE U/S. 148 OF THE ACT, ASKING THE ASSESSEE TO FURNISH THE RETURN OF INCOME U/S. 148 OF THE IT ACT. THE ASSESSEES REPRESENTATIVE IN STEAD OF COMPLYING WITH THE STATUTORY NOTICE, SOUGHT ADJOURNMENTS ON V ARIOUS DATES AND ULTIMATELY PROCEEDINGS WERE ADJOURNED TO 04.08.2005 AND 11.08.2005. THE ASSESSEES REPRESENTATIVE WANTED TIME TO FILE R ETURN OF INCOME U/S. 148 BELATEDLY, BUT HIS REQUEST WAS NOT ALLOWED BECA USE THERE WAS NO SUCH PROVISION UNDER THE LAW. THE ORDER SHEETS OF T HE AO HAVE BEEN FILED IN THE PAPER BOOK BY THE LD. DR. THE AO ON 26 .07.2005 NOTED THAT NO INFORMATION HAS BEEN RECEIVED FROM BROKER, M/S. NORTH INDIA SECURITIES PVT. LTD., BUT INFORMATION WAS RECEIVED FROM M/S. CAPITAL TRADE LINK LTD. DATED 22.07.2005 WHOSE SHARES WERE ALLEGED TO BE SOLD THROUGH BROKER. COPY OF THE LETTER DATED 22.07 .2005 IS FILED ON RECORD IN WHICH M/S. CAPITAL TRADE LINK LTD. CONFIR MED THAT ENTIRE SHARES STATED TO BE SOLD ARE STILL HELD IN THE NAME OF ASSESSEE AND HAVE NOT BEEN TRANSFERRED TO ANY PERSON IN THE RECORDS O F THE COMPANY. THEREAFTER THE ASSESSEES REPRESENTATIVE APPEARED O N 05.08.2005 BEFORE THE AO AND SOUGHT ADJOURNMENT FOR FILING REP LY. THE CASE WAS ADJOURNED ON 11.08.2005 AND ON THAT DAY, REPLY WAS FILED AND OBJECTIONS WERE RAISED REGARDING PROCEEDINGS U/S. 1 48 AND ASSESSEE WAS DIRECTED TO FILE REPLY BY 18.08.2005 AND THE AS SESSEE WAS SHOWN INFORMATION RECEIVED FROM M/S. CAPITAL TRADE LINK L TD. THAT NO SHARES HAVE BEEN TRANSFERRED TILL DATE AND THE SAME ARE HE LD IN THE NAME OF ASSESSEE. THEREFORE, THE ASSESSEE WAS DIRECTED TO P ROVE THE GENUINENESS OF THE SALE OF SHARES IN QUESTION AND S HOW CAUSE NOTICE WAS ALSO GIVEN TO THE ASSESSEE AS TO WHY IT SHOULD NOT BE CONCLUDED THAT THE SHARES WERE NOT SOLD AND THE AMOUNT IN QUE STION HAS BEEN RECEIVED ON ACCOUNT OF UNDISCLOSED INCOME SHOULD NO T BE ADDED U/S. 68 OF THE IT ACT. THE CASE WAS ADJOURNED TO 18.08.2 005. THE LD. DR FILED COPY OF REPLY OF ASSESSEE DATED 18.08.2005 IN WHICH THE ASSESSEE SURRENDERED THE INCOME EARNED ON SALE OF SHARES OF M/S. CAPITAL TRADE LINK LTD. AS INCOME FROM UNDISCLOSED SOURCES AND IT WAS CLARIFIED THAT BECAUSE OF THE ABOVE SURRENDER MADE BY THE ASSESSEE, THERE IS NO NEED TO PROVE THE GENUINENESS OF THE TR ANSACTION IN THE MATTER. BEFORE PROCEEDING FURTHER, WE MAY ALSO NOTE HERE THAT DESPITE SURRENDER MADE BY THE ASSESSEE OF THE INCOME OUT OF UNDISCLOSED SOURCES, THE AO BROUGHT SUFFICIENT MATERIAL ON RECO RD TO PROVE THAT THE ASSESSEE HAS NOT ENTERED INTO ANY GENUINE TRANS ACTION OF SALE OF SHARES. THEREFORE, THE FINDING GIVEN IN THE ASSESSM ENT ORDER AND THE SURRENDER MADE BY THE ASSESSEE IN PURSUANCE OF THE ENQUIRIES ITA NO.96/AGR/2011 A.Y. 2002-03 . 26 CONDUCTED BY THE AO AGAINST THE ASSESSEE, IT IS EST ABLISHED ON RECORD THAT THE ASSESSEE NEVER FILED ANY REVISED RETURN IN PURSUANCE OF NOTICE U/S. 148 OF THE ACT. IT IS ALSO ESTABLISHED ON RECO RD THAT THE AO CONDUCTED ENQUIRIES INTO THE MATTER OF SALE OF BOGU S SHARES PRIOR TO SURRENDER MADE BY THE ASSESSEE ON 18.08.2005 AND ES TABLISHED ON RECORD THAT THE AO BROUGHT SUFFICIENT MATERIAL ON R ECORD AGAINST THE ASSESSEE THAT THE ASSESSEE ENTERED INTO BOGUS AND S HAM TRANSACTIONS OF SALE OF SHARES AND SPECIFIC MATERIAL WAS BROUGHT TO THE NOTICE OF ASSESSEE AND SHOW CAUSE NOTICE WAS GIVEN TO THE ASS ESSEE ON 11.08.2005 AS TO WHY ADDITION U/S. 68 BE NOT MADE A GAINST THE ASSESSEE. IT IS, THEREFORE, CLEAR ON RECORD THAT TH E ASSESSEE AT THE INITIAL STAGE TRIED TO PROLONG THE MATTER BEFORE TH E AO AT THE REASSESSMENT STAGE AND HAS NOT PROVIDED ANY RELEVAN T INFORMATION TO THE AO. THE ASSESSEE MADE DISCLOSURE OF UNDISCLOSED INCOME ONLY UNDER COMPULSION WHEN THE ASSESSEE WAS CORNERED BY THE AO ON THE BASIS OF THE MATERIAL FOUND AGAINST HIM. THE LAW HA S PROVIDED FURNISHING OF REVISED RETURN IN A CASE OF ANY OMISS ION IN THE ORIGINAL RETURN. SUCH OMISSION HAS TO BE INADVERTENT AND BON A FIDE. IF THE OMISSION IS INTENTIONAL, THE REVISED RETURN ALSO CA NNOT ABSOLVE THE ASSESSEE. EACH CASE WOULD DEPEND ON THE FACTS OF EA CH CASE, CONSIDERING THE INVESTIGATION CONDUCTED BY THE REVE NUE DEPARTMENT AND THE EVIDENCE COLLECTED DURING THE COURSE OF INV ESTIGATION BY THE DEPARTMENT. IN THIS CASE, THE ORIGINAL RETURN FILED BY THE ASSESSEE DECLARING CAPITAL GAINS IN QUESTION ON SALE OF SHAR ES OF M/S. CAPITAL TRADE LINK LTD. WAS NOT BONA FIDE BECAUSE THE SHARE S IN QUESTION HELD BY THE ASSESSEE WERE NEVER TRANSFERRED IN THE NAME OF ANY PERSON AS A PURCHASER. THIS FACT WAS WITHIN THE KNOWLEDGE OF TH E ASSESSEE WHICH WAS ALSO CONFIRMED BY THE COMPANY, M/S. CAPITAL TRA DE LINK LTD., WHOSE SHARES WERE ALLEGEDLY HELD BY THE ASSESSEE AN D ALLEGEDLY SOLD BY THE ASSESSEE. SINCE NO SHARES WERE SOLD, THERE I S NO QUESTION OF RECEIVING ANY LONG TERM CAPITAL GAINS ON THE SAME T RANSACTION. THE AO CONDUCTED ENQUIRIES IN THE CASE OF BROKERS, M/S. NORTH INDIA SECURITIES PVT. LTD., NEW DELHI AND DESPITE SPECIFI C ENQUIRIES MADE IN THE CASE OF BROKER, THE BROKER WAS NOT TRACEABLE. T HE BANK ACCOUNTS WERE EXAMINED FROM WHERE DRAFTS IN QUESTION WERE IS SUED AND IT WAS FOUND THAT THE CASH WAS DEPOSITED BEFORE ISSUE OF D RAFTS. THUS, SUFFICIENT MATERIAL WAS BROUGHT ON RECORD BY THE RE VENUE DEPARTMENT AGAINST THE ASSESSEE AND ALL MATERIAL WAS BROUGHT T O THE NOTICE OF ASSESSEE AND ONLY THEREAFTER, THE ASSESSEE MADE SUR RENDER OF UNDISCLOSED INCOME ON 18.08.2005. ITA NO.96/AGR/2011 A.Y. 2002-03 . 27 5.1 HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAKESH SURI 331 ITR 458 HELD THE ASSESSEE FILED HIS RETURN FOR THE ASSESSMENT Y EAR 2004-05 DISCLOSING TOTAL OF RS. 1,17,600. THE CASE WAS SELECTED FOR SCRUTINY. IT WAS FOUND THAT THE ASSESSEE HAD SH OWN LONG- TERM CAPITAL GAINS ON SALE OF SHARES. HE HAD CONSTR UCTED A HOUSE BETWEEN FINANCIAL YEARS 2001-02 AND 2004-05 I NVESTING RS.56,74,567. THE INCOME-TAX AUTHORITIES REPEATEDLY REQUIRED THE ASSESSEE TO FURNISH THE CONTRACT NOTE OF PURCHA SE AND SALE OF SHARES SOLD WITH A COPY OF BILL OF BROKER, JUSTIFY HOLDING OF SHARES, WHICH WERE SOLD, YEAR-WISE INVESTMENT IN TH E HOUSE PROPERTY, VALUATION REPORT OF THE APPROVED VALUER, CONFIRMATION OF SALARY RECEIVED FROM THE COMPANY AND OTHER DOCUM ENTS. THE ASSESSEE DID NOT FURNISH FULL DETAILS. HIS STATEMEN T THAT THE SHARES HAD BEEN SOLD THROUGH THE DELHI STOCK EXCHAN GE WAS FOUND TO BE FALSE. THE ASSESSEE WAS DIRECTED TO FUR NISH REPLY IN TERMS OF THE ORDER DATED NOVEMBER 9, 2006. HE WAS F URTHER DIRECTED TO FURNISH THE NAME OF THE STOCK EXCHANGE THROUGH WHICH SHARES WERE PURCHASED AND SOLD, RATE OF SHARE S IN THE STOCK EXCHANGE ON DATE OF PURCHASE AND SALE ON OR B EFORE DECEMBER 6, 2006. ON DECEMBER 6, 2006, THE ASSESSEE SURRENDERED THE ENTRY APPEARING IN HIS BANK ACCOUNT ON SALE OF SHARES AMOUNTING TO RS. 61,35,844 ON AGREED BASIS. THE ASSESSING OFFICER TREATED THE SUM OF RS. 61,35,844 AS INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 69A OF THE I NCOME-TAX ACT, 1961, AND ALSO LEVIED PENALTY. THE COMMISSIONE R (APPEALS) CANCELLED THE PENALTY AND THIS WAS CONFIR MED BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEAL, THAT THE ASSESSEE HAD CO NCEALED THE MATERIAL FACTS AND GIVEN INCORRECT STATEMENT OF FAC TS IN THE APPLICATION AND ALSO NOT PROVIDED INFORMATION REQUIRED BY THE A SSESSING OFFICER, AFTER RECEIPT OF NOTICE. ACCORDINGLY THE ACTION OF THE ASSESSEE WAS NEITHER BONA FIDE NOR VOLUNTARY. THE MANNER IN WHIC H THE ASSESSEE HAD TRIED TO PROLONG THE CASE BEFORE THE ASSESSING OFFICER BY NOT PROVIDING INFORMATION IMMEDIATELY AND BY NARRATING INCORRECT FACTS IN THE LETTER DATED DECEMBER 6, 2006 SHOWED THAT THE A SSESSEE HAD CONCEALED THE INCOME AND DISCLOSURE WAS NOT VOLUNTA RY BUT UNDER ITA NO.96/AGR/2011 A.Y. 2002-03 . 28 COMPULSION BEING CORNERED BY THE ASSESSING OFFICER. PENALTY HAD TO BE IMPOSED. 5.2 HONBLE GUJARAT HIGH COURT IN THE CASE OF LMP P RECISION ENGG. CO. LTD. VS. DCIT, 330 ITR 93 HELD THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION), BOMBAY UNDERTOOK SURVEY ACTION SOME TIME IN SEPTEMB ER, 1988 AND ON VERIFICATION OF CERTAIN PURCHASES MADE BY TH E ASSESSEE IT WAS FOUND THAT THE PURCHASES DID NOT APPEAR TO BE G ENUINE. BEFORE THE PROCEEDINGS COULD BE FINALLY CONCLUDED T HE ASSESSEE FILED A DECLARATION UNDER SECTION 273A OF THE ACT D ISCLOSING ADDITIONAL INCOME OF RS. 54,71,463 AS BEING RELATAB LE TO ASSESSMENT YEAR 1985-86. ON THE SAME DAY, DECLARATI ON WAS ALSO MADE OF A SUM OF RS.18 LAKHS EACH FOR ASSESSM ENT YEARS 1986-87, 1987-88 AND 1988-89. THIS APPLICATION UNDE R SECTION 273A OF THE ACT WAS FOLLOWED BY REVISED RETURNS FIL ED ON FEBRUARY 14, 1989 FOR ALL THE THREE ASSESSMENT YEAR S DECLARING IDENTICAL ADDITIONAL INCOME IN THE REVISED RETURNS. BEFORE ASSESSMENTS COULD BE FINALISED, AFTER REGULARISING THE SAME BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT, TH E ASSESSEE CAME FORWARD WITH ANOTHER APPLICATION DECLARING ADD ITIONAL INCOME OF RS. 78,56,613. THE FIRST DECLARATION WAS IN RELATION TO PURCHASES FROM ISC WHILE THE SECOND DISCLOSURE WAS IN RELATION TO PURCHASE MADE FROM SC, NB AND NPST. THE ASSESSME NTS WERE NOT CHALLENGED BY THE ASSESSEE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(L)( C). THE EXPLANATION OF THE ASSESSEE FOR ALL THE THREE YEARS WAS THAT REVISED RETURNS WERE VOLUNTARY, ADDITIONAL INCOME I N EACH OF THE REVISED RETURNS WAS DECLARED TO PURCHASE PEACE AND NO CONCEALMENT WAS INVOLVED. IT WAS SUBMITTED THAT THE RETURNS WERE REVISED EVEN BEFORE ISSUANCE OF NOTICE UNDER S ECTION 148 OF THE ACT. THE ASSESSING OFFICER DID NOT ACCEPT TH E EXPLANATION OF THE ASSESSEE AND LEVIED PENALTIES. SUCCESSIVE AP PEALS FILED BY THE ASSESSEE BEFORE THE COMMISSIONER (APPEALS) AND THE TRIBUNAL WERE DISMISSED BY THE TWO APPELLATE AUTHOR ITIES CONFIRMING THE PENALTIES LEVIED BY THE ASSESSING OF FICER. HOWEVER, THE TRIBUNAL CAME TO THE CONCLUSION THAT T HE ASSESSEE HAD CO-OPERATED IN FINALISATION OF THE ASSESSMENT A ND ACCEPTED ITA NO.96/AGR/2011 A.Y. 2002-03 . 29 THE ASSESSMENT OF ADDITIONAL INCOME AND SO, THE TRI BUNAL REDUCED THE PENALTY LEVIED FROM THE MAXIMUM TO THE MINIMUM. ON A REFERENCE: HELD, THAT IT WAS ONLY AFTER THE STATEMENT OF THE C HAIRMAN AND MANAGING DIRECTOR WAS RECORDED BY THE DEPUTY DI RECTOR OF INCOME-TAX (INVESTIGATION MUMBAI, THAT THE FIRST DI SCLOSURE DATED OCTOBER 20,1988, RS. 54,71,463 WAS MADE ACCOM PANIED BY ANOTHER DISCLOSURE OF RS. 54 LAKHS IN A ROUND FI GURE BEING DIVIDED INTO THREE SEGMENTS OF RS. 18 LAKHS EACH FO R ASSESSMENT YEAN 1986-87, 1987-88 AND 1988-89. THE REVISED RETU RN DECLARING A SUM OF RS.78,56,613 CAME ABOUT AS A CO NSEQUENCE OF FOLLOW-UP PROCEEDINGS UNDERTAKEN BY THE DEPUTY D IRECTOR OF INCOME-TAX IN RELATION TO THE OTHER THREE SUPPLIERS , VIZ., SC, NB AND NPST. THEREFORE, THE ASSESSEE COULD NOT BE STAT ED TO HAVE VOLUNTARILY COME FORWARD TO DISCLOSE INCOME WHICH H AD UNINTENTIONALLY BEEN OMITTED FROM THE ORIGINAL RETU RN OF INCOME. THE IMPOSITION OF PENALTY WAS VALID. 5.3 HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PREM PAL GANDHI VS. CIT, 335 ITR 23 HELD THE ASSESSEE DERIVED INCOME FROM PROPERTY DEALINGS . AFTER ASSESSMENT WAS COMPLETED, THE ASSESSING OFFIC ER NOTICED THAT THE ASSESSEE HAD SUBSTANTIAL TRANSACTIONS IN T HE BANK WHICH WERE NOT DISCLOSED AND PROCEEDINGS WERE INITIATED F OR REASSESSMENT. THE ASSESSEE FILED A REVISED RETURN A ND OFFERED THE PEAK CREDITS IN THE BANK ACCOUNT AND INTEREST T HEREON, WITH A CONDITION THAT NO PENALTY BE IMPOSED AND HE MAY N OT BE PROSECUTED. THE ASSESSING OFFICER DID NOT ACCEPT TH E CONDITIONS. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AND ALSO IMPOSED PENALTY. THE COMMISSIONER (APPEALS) ACCEPTE D THE PLEA OF THE ASSESSEE TO THE EFFECT THAT THE ASSESSE E HAVING FILED HIGHER RETURN AND SURRENDERED THE UNDISCLOSED INCOM E, PENALTY WAS NOT LEVIABLE. THE TRIBUNAL REVERSED THE ORDER O N THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTI CULARS OF HIS INCOME AND ALSO CONCEALED PARTICULARS OF HIS INCOME WHILE FILING THE ORIGINAL RETURN AND WAS NOT ABLE TO ESTA BLISH THE INADVERTENT MISTAKE OR OMISSION IN THE ORIGINAL RET URN, WHEN HE ITA NO.96/AGR/2011 A.Y. 2002-03 . 30 DECLARED SHOWING MUCH LARGER INCOME IN THE REVISED RETURN. ON APPEAL: HELD, DISMISSING THE APPEAL, THAT THE PLAUSIBILITY OR OTHERWISE OF THE EXPLANATION OF THE ASSESSEE WAS A PURE QUESTION OF FACT. ADMITTEDLY, THE ASSESSEE CONCEALE D THE TRANSACTIONS IN THE BANK ACCOUNT AND WHEN NOTICE OF REASSESSMENT WAS ISSUED, FINDING NO OTHER WAY OUT, THE ASSESSEE SURRENDERED INCOME TO AVOID PENAL CONSEQUENCES. IN SUCH A SITUATION, IT COULD NOT BE HELD THAT THE ASSESSEE W ANTED TO BUY PEACE OF MIND AND THERE WAS NO EVIDENCE OF CONCEALM ENT, WHICH CALLED FOR PENALTY. THIS WAS NOT A CASE WHERE PENAL TY HAD BEEN IMPOSED ONLY BECAUSE THE ASSESSEE DISCLOSED HIGHER INCOME VOLUNTARILY BUT A CASE OF CLEAR CONCEALMENT WHERE T HE ASSESSEE HAVING FOUND NO OTHER WAY OUT, WAS FORCED TO SURREN DER THE UNDISCLOSED INCOME. NO SUBSTANTIAL QUESTION OF LAW AROSE. 5.4 HONBLE BOMBAY HIGH COURT IN THE CASE OF JYOTI LAXMAN KONKAR VS. CIT, 292 ITR 163 HELD THE ASSESSEE HAD FILED A RETURN FOR THE ASSESSMENT YEAR 1999- 2000 DECLARING AN INCOME OF RS.7,40,510. NOT SATISF IED THEREWITH, THE ASSESSING OFFICER CARRIED OUT A SURV EY UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961, AND DURIN G THE SURVEY FOUND THAT THERE WAS A DISCREPANCY IN STOCK TO THE TUNE OF RS.18,28,706 WHICH WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, AND THE ASSESSEE FILED A REVISED RETURN D ISCLOSING ADDITIONAL INCOME OF RS.18,28,706. THE ASSESSING OF FICER IMPOSED PENALTY UNDER SECTION 271(1)(C) AND THIS WA S UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEAL, THAT THE QUESTION WHET HER THERE IS CONCEALMENT OF INCOME OR NOT HAS TO BE DEC IDED WITH REFERENCE TO THE FACTS OF A GIVEN CASE AND THE FACT FINDING AUTHORITIES UNDER THE ACT HAVING COME TO THE CONCLU SION THAT IN THE FACTS OF THE CASE, THE ASSESSEE HAD CONCEALED T HE INCOME INITIALLY WITH A VIEW TO AVOID THE PAYMENT OF TAX, THE IMPOSITION OF PENALTY WAS VALID. ITA NO.96/AGR/2011 A.Y. 2002-03 . 31 5.5 ALL THE ABOVE DECISIONS SQUARELY APPLY TO THE C ASE OF THE ASSESSEE AND PROVE THAT THE ASSESSEE HAD INTENTIONA LLY AND DELIBERATELY FILED INACCURATE PARTICULARS OF HIS IN COME IN THE ORIGINAL RETURN AND THEREFORE, PENALTY WAS LEVIABLE IN THE P RESENT CASE. 5.6 THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, RELI ED UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAJEEV GARG AND OTHERS (SUPRA) IN SUPPORT OF HIS CO NTENTION THAT IT IS NOT A CASE OF CONCEALMENT IN, WHICH DECISION IN THE CASE OF SURESH CHAND MITTAL HAS ALSO BEEN CONSIDERED. HOWEVER, THE SAID DECISIONS IN THE CASE OF RAJEEV GARG AND SURESH CHAND MITTAL HAVE BEEN CONSIDERED BY THE HONBLE PUNJAB & HARYANA HIGH COU RT IN ITS LATER DECISION IN THE CASE OF PREM PAL GANDHI VS. CIT (SU PRA) AND PENALTY HAS BEEN CONFIRMED. THEREFORE, SAID DECISIONS WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. FURTHER IN THE CASE OF ASSESS EE, NO REVISED RETURN HAS BEEN FILED IN RESPONSE TO THE NOTICE U/S. 148 O F THE IT ACT AND FURTHER THE ASSESSEE MADE SURRENDER OF UNDISCLOSED INCOME ONLY WHEN HE WAS CONFRONTED WITH THE INCRIMINATING MATERIAL A GAINST HIM AND CORNERED BY THE REVENUE DEPARTMENT AFTER MAKING DET AILED ENQUIRY. THEREFORE, SAID DECISION WOULD NOT SUPPORT THE CASE OF ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE FURTHER RELIED UPON TH E ORDER OF ITAT, AGRA BENCH IN THE CASE OF SMT. VANDANA AGARWAL (SUP RA), IN WHICH THE TRIBUNAL FOUND THAT EXPLANATION FURNISHED BY TH E ASSESSEE STANDS SUBSTANTIATED BY EVIDENCE BROUGHT ON RECORD. IN THE LIGHT OF THE DECISIONS OF VARIOUS HIGH COURTS, NOTED ABOVE, FIRS T OF ALL DECISION OF TRIBUNAL CANNOT BE GIVEN PREFERENCE AND FURTHER WHE N THE ASSESSEE HIMSELF SURRENDERED THE UNDISCLOSED INCOME AT THE A SSESSMENT STAGE, THERE IS NO QUESTION OF ASSESSEES EXPLANATION SUBS TANTIATED BY THE EVIDENCE TO PROVE GENUINE TRANSACTION OF SALE OF SH ARES. THEREFORE, SUCH DECISION OF THE TRIBUNAL WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. 6. WE MAY ALSO NOTE HERE THAT THE LD. CIT(A) WITHOU T CONSIDERING THE FACTS AND MATERIAL ON RECORD, MERELY BY FOLLOWI NG ANOTHER ORDER OF TRIBUNAL CANCELLED THE PENALTY. SUCH A CASUAL APPRO ACH BY THE LD. CIT(A) IS NOT APPRECIATED. THE LD. CIT(A) FAILED TO CONSIDER THE ORDER SHEET AND THE MATERIAL COLLECTED BY THE AO DURING T HE COURSE OF INVESTIGATION WHICH CLEARLY PROVED THAT THE ASSESSE E HAS DELIBERATELY AND INTENTIONALLY FILED INACCURATE PARTICULARS OF I NCOME IN THE ORIGINAL RETURN OF INCOME AND ONLY WHEN THE ASSESSEE WAS CON FRONTED AND ITA NO.96/AGR/2011 A.Y. 2002-03 . 32 CORNERED BY THE DEPARTMENT, THE ASSESSEE MADE SURRE NDER OF UNDISCLOSED INCOME. ON COLLECTING ADVERSE MATERIAL AGAINST THE ASSESSEE, HAD THE DEPARTMENT NOT REOPENED THE ASSES SMENT U/S. 148 OF THE IT ACT, THE ASSESSEE WOULD NEVER SURRENDER THE UNDISCLOSED INCOME. EVEN IF THE ASSESSEE WOULD HAVE FILED THE R EVISED RETURN IN THE FACTS OF THIS CASE IN PURSUANCE TO THE NOTICE U/S. 148 OF THE IT ACT, IT WOULD NOT MAKE ANY DIFFERENCE BECAUSE THE AO HAS CO LLECTED INCRIMINATING MATERIAL AGAINST THE ASSESSEE PRIOR T O THE SURRENDER OF UNDISCLOSED INCOME AND CONFRONTED THE SAME TO THE A SSESSEE WITH DUE SHOW CAUSE NOTICE. THEREFORE, THE FACTS AND MATERIA L BROUGHT ON RECORD CLEARLY JUSTIFY THE LEVY OF PENALTY, WHICH H AS BEEN IGNORED BY THE LD. CIT(A) WHILE CANCELING THE PENALTY. THEREFO RE, THE ORDER OF THE LD. CIT(A) CANNOT BE SUSTAINED IN LAW. 7. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTAN CES IN THE LIGHT OF DECISIONS OF VARIOUS COURTS REFERRED TO ABOVE, W E ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CANCELING THE PENALTY. WE ACCORDINGLY, SET ASIDE AND REVERSE THE ORDER OF LD. CIT(A) AND RESTORE THE ORDER OF AO IN IMPOSING PENALTY U/S. 271(1)(C) AGAINST THE ASSESSEE. 9.20 IN THE LIGHT OF ABOVE DISCUSSIONS, IF WE CONSI DER THE FACTS OF THE CASE, WE FIND THAT ADMITTED FACTS ARE THAT THE ASSE SSEE FILED ORIGINAL RETURN OF INCOME ON 31.10.2002 DECLARING INCOME WHICH INCL UDES LONG TERM CAPITAL GAIN IN SHORT, LTCG RS.12,65,949/- ON SALE OF SHARES OF SUMO FINANCE & INVESTMENT COMPANY LIMITED AND CLAIMED DE DUCTION UNDER SECTION 54F OF THE ACT. THE CASE OF THE ASSESSEE W AS REOPENED AND NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 9.2.2004 . IN RESPONSE TO THIS NOTICE, THE ASSESSEE HAS FILED REVISED RETURN ON 27 .9.2005 DECLARING TOTAL INCOME OF RS.30,67,118/-. IN THIS REVISED RETURN D EDUCTION UNDER SECTION ITA NO.96/AGR/2011 A.Y. 2002-03 . 33 54F ORIGINALLY CLAIMED WAS SURRENDERED BY THE ASSES SEE. THE REASONS RECORDED ON 9.2.2004 BY THE AO FOR REOPENING OF THE ASSESSMENT WHICH IS REPRODUCED FROM THE ORDER OF THE CIT (A) PAGE NOS.6 & 7 AS UNDER:- IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME DECLARING AN INCOME OF RS.16,42,690/- ON 31.10.02 W HICH HAS BEEN PROCESSED U/S 143(1) OF THE IT ACT, 1961 ON 20 .2.2003. IN THE RETURN OF INCOME THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE OF SHARES OF M/S SUMA FIN ANCE AT RS.14,24,430/-. THE SHARE DEALING AND THE LONG TER M CAPITAL GAIN CLAIMED ON THE DEALINGS OF SHARES OF AFORESAID COMPANIES HAVE BEEN SURRENDERED BY THE OTHER ASSESS EE FOR THE REASON THAT THE LONG TERM CAPITAL GAIN CLAIMED ON THE DEALINGS OF SHARES OF AFORESAID COMPANY WAS MERELY ACCOMMODATION ENTRY OBTAINED THROUGH SHARE BROKERS. THE FOLLOWING ASSESSEES HAVE SURRENDERED THE LONG TERM CAPITAL GAIN TO BE ASSESSED AS THEIR INCOME FROM OTHER SOUR CES :- 1. SHRI MAHENDRA KUMAR POPTANI, C/O. M/S RAM SONS, MG ROD, AGRA A.Y. 2002-03 2. SHRI RAM CHAND POPTANI, C/O. M/S. RAM SONS, MG ROAD, AGRA A.Y. 2002-03 3. SHRI SUNIL CHAND GUPTA, HUF, C/O. M/S. TRAVEL BU REAU, AGRA THEREFORE, SINCE THE SHARES CLAIMED TO HAVE BEEN TRANSACTED UPON ARE OF THE SAME COMPANY IN WHICH TH E AFORESAID ASSESSEES OF THE RANGE HAVE ACCEPTED THAT THE SHARE TRANSACTION WAS A SHAM ONE AND IN FACT REPRESENTED ASSESSEES OWN INCOME FROM OTHER SOURCES WHICH HAS BEEN INTRODUCED IN THE GARB OF LONG TERM CAPITAL GAIN, I HAVE REASON TO BELIEVE THAT THE ABOVE INCOME OF RS.14,24 ,430/- CLAIMED UNDER THE HEAD LONG TERM CAPITAL GAIN IS TH E ASSESSEES OWN INCOME FROM UNDISCLOSED SOURCES INTR ODUCED UNDER THE GARB OF LONG TERM CAPITAL GAIN. HENCE IN COME TO THE EXTENT OF RS.14,24,430/- HAS ESCAPED ASSESSMENT WITHIN ITA NO.96/AGR/2011 A.Y. 2002-03 . 34 THE MEANING OF SECTION 147 READ WITH EXPN 2(C) OF T HE I.T. ACT, 1961. ISSUE NOTICE U/S 148. 9.21 UNDER THE ABOVE ADMITTED FACTS AND CIRCUMSTANC ES, CAN IT BE SAID THAT THE REVISED RETURN FILED BY THE ASSESSEE ON 27 .9.2004 IS A BONA FIDE AND VOLUNTARY RETURN. THE DEPARTMENT HAS ALREADY CO ME TO KNOW ON 9.2.2004 THAT 17000 SHARES CLAIMED TO HAVE BEEN TRA NSACTED BY THE ASSESSEE UPON ARE OF THE SAME COMPANY IN WHICH THE ASSESSEES HAVE ACCEPTED THAT THE SHARE TRANSACTION WAS A SHAM ONE AND IN FACT REPRESENTED ASSESSEES OWN INCOME FROM OTHER SOURCE S WHICH HAS BEEN INTRODUCED IN THE GARB OF LONG TERM CAPITAL GAIN. T HE ASSESSEE KEEPS SILENCE SINCE 31.10.2002 TO 9.2.2004. HE CAME INTO ACTION ONLY WHEN A NOTICE UNDER SECTION 148 RECEIVED BY THE ASSESSEE. IT IS ALSO EQUALLY IMPORTANT TO NOTE THAT CLAIMING EXEMPTION OF INCOME UNDER SECTION IS A CONSCIOUS DECISION OF THE ASSESSEE AS SUCH CLAIMS A RE CLAIMING AFTER OBSERVING AND AFTER COMPLYING CERTAIN PROCEDURES AN D FORMALITIES OF THE ACT. THUS UNDER THE CIRCUMSTANCES UNDER WHICH THE A SSESSEE SURRENDER INCOME BY FILING REVISED RETURN MEANS ADMISSION BY THE ASSESSEE THAT WHATEVER STATED BY THE DEPARTMENT IN THE REASON REC ORDED THAT THAT THE SHARE TRANSACTION WAS A SHAM ONE AND IN FACT REPRES ENTED ASSESSEES OWN INCOME FROM OTHER SOURCES WHICH HAS BEEN INTRODUCED IN THE GARB OF LONG ITA NO.96/AGR/2011 A.Y. 2002-03 . 35 TERM CAPITAL GAIN. THE CRUCIAL AND IMPORTANT FACT O F THE CASE UNDER CONSIDERATION IS THAT THE ASSESSEE HAS FAILED TO FU RNISH ANY PARTICULARS OF INCOME OF RS.14,27,286/- EVEN TILL TODAY WHICH HAS BEEN SHOWN IN THE REVISED RETURN FILED BY THE ASSESSEE. IN OTHER WOR DS, IT IS A CLEAR CUT CASE OF CONCEALING PARTICULARS OF INCOME OF RS.14,27,286 /-. ONCE THIS INGREDIENT OF SECTION 271(1)(C) OF THE ACT CONCEALI NG PARTICULARS OF INCOME IS SATISFIED, PENALTY UNDER SECTION 271(1)(C ) OF THE ACT IS LEVIABLE. IN ADDITION TO IT, UNDER THE CIRCUMSTANCES, HOW ONE CAN SAY THAT THE OMISSION IN ORIGINAL RETURN OF INCOME WAS INADVERTE NT AND BONA FIDE. IT IS SETTLED POSITION OF THE LAW THAT IF THE OMISSION IS INTENTIONAL THE REVISED RETURN CANNOT ABSOLVE AN ASSESSEE. SUCH CASE IS CER TAINLY A CASE OF FURNISHING INACCURATE PARTICULARS AND CONCEALING PA RTICULARS OF INCOME. THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOM E-TAX, AHMEDABAD V. RELIANCE PETROPRODUCTS (P.) LTD 322 ITR 158 (SC) HELD THAT THE MEANING OF THE WORD 'PARTICULARS MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORREC T, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE FIND THAT IN THE CASE UNDER CONSIDERATION, THE ORIGINAL RETURN FILED BY THE ASSESSEE AND DETAILS F URNISHED IN THE SAID RETURN WAS FOUND INCORRECT OR ERRONEOUS OR FALSE. THIS FACT SUPPORTED BY THE REASONS RECORDED FOR REOPENING OF THE CASE UNDE R SECTION 147 OF THE ITA NO.96/AGR/2011 A.Y. 2002-03 . 36 ACT. THE REVISED RETURN FILED BY THE ASSESSEE DOES NOT HELP TO THE ASSESSEE AS SAME HAS BEEN FILED AFTER DETECTING CONCEALMENT OF PARTICULARS AND INACCURATE PARTICULARS IN THE RETURN OF INCOME. TH US IT CAN SAFELY BE NOTED THAT THE OVERALL CONDUCT OF THE ASSESSEE DOES NOT INDICATE THAT THE REVISED RETURNS WERE FILED VOLUNTARILY AND IN GOOD FAITH. IT IS TRUE THAT MERE FACT OF NOT CHALLENGING THE ASSESSMENT ORDER P ER SE WOULD NOT BE INDICATIVE OF ANY ACCEPTANCE THAT THERE WAS CONCEAL MENT OF INCOME, BUT IN THE FACTS OF THE PRESENT CASE, THE FACT THAT TH E ASSESSEE HIMSELF SURRENDERED THE INCOME NOT HAVING CHALLENGED THE A SSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATION, ASSUMES SIGNIFICANCE. THIS FACT ON ITS OWN, AS A SOLITARY FACTOR MAY NOT BE SUFFICIENT BUT READ IN CONJUNCTION WITH OVERALL CONDUCT OF THE ASSESSEE WOULD DEFINITELY BE A POINTER TO THE FACTUM OF THE ASSESSEE HAVING INDULGED IN AN ACT OF CONCEALMENT OF INCOME IN THE FORM OF BOGUS/ SHAM SHARE TRANSACTION S CLAIMING EXEMPTION UNDER SECTION 54 F AND INTRODUCING OWN UNACCOUNTED INCOME IN GARB OF LONG TERM CAPITAL GAIN. ON THE COST OF REPEATATION WE MAY AGAIN STATED HERE THAT SHARE TRANSACTIONS ARE REQUIRED MORE INTE NTION AND CONSCIOUS DECISIONS BY AN ASSESSEE AS THESE TRANSACTIONS ARE BONDED BY VARIOUS PROVISIONS OF VARIOUS ACTS THEN TRANSITIONS OF OTHE R TYPE OF GOODS AND ITEMS. ASSESSEE HAVING WILLFULLY SHOWN BOGUS LONG T ERM CAPITAL GAIN ON ITA NO.96/AGR/2011 A.Y. 2002-03 . 37 SHAM TRANSACTION OF SHARES IN THE ORIGINAL RETURN O F INCOME FILED BY HIM AND HE HAS CLAIMED EXEMPTION AGAINST THAT INCOME UN DER SECTION 54F F OF THE ACT. BY NOT OFFERING AN AMOUNT TO TAX AND BY CL AIMING WRONG DEDUCTION UNDER S.54 F AND OFFERED THESE AMOUNTS TO TAX ONLY IN RESPONSE TO NOTICE UNDER S. 148, THERE WAS CONCEALMENT OF PA RTICULARS FILING INACCURATE PARTICULARS OF INCOME ATTRACTING PENALTY UNDER SECTION 271 (1) OF THE ACT. UNDER THE CIRCUMSTANCES THE ASSESS EE CANNOT BE ALLOWED ANY ADVANTAGE OR BENEFIT OF REVISED RETURN FILED BY HIM IN RELATION TO IMPOSITION OF PENALTY FOR CONCEALMENT IN THE ORIGIN AL RETURN FILED. FURTHER CONDITIONAL SURRENDER THAT NO PENALTY WILL BE LIVABLE DOES NOT HELP TO THE ASSESSEE AS SUCH MUTUAL AND CONDITIONAL AGREEMENT IS AGAINST THE LAW. 9.22 LET US SEE WHAT FINDING IS GIVEN BY THE CIT (A ) WHILE CANCELLING PENALTY. THE CIT(A) NOTED THAT THE ASSESSING OFFIC ER IN HIS ORDER NOWHERE DISCUSSED IN DETAIL OR EVIDENCE GATHERED BY HIM ON BASIS OF WHICH HE ARRIVED TO THE CONCLUSION THAT THE SHARE T RANSACTIONS SHOWN BY THE ASSESSEE ARE SHAM ONE. THE CIT(A) HAS ALSO NOT ED THE SUBMISSION OF THE ASSESSEE WHETHER THE A.O. HAS ISSUED ANY QUESTI ONNAIRE PRIOR TO THE DECLARATION MADE BY THE ASSESSEE AND WHETHER THERE WAS ANY EVIDENCE ITA NO.96/AGR/2011 A.Y. 2002-03 . 38 AVAILABLE WITH THE A.O. THAT THE SHARE TRANSACTIONS SHOWN BY THE ASSESSEE ARE NOT GENUINE AND FORCING HIM TO SURRENDER. THE CIT (A) NOTED THAT THE A.O. HAS NOT CORRECTLY NOTED THE FACTS THAT THE ASS ESSEE HAS DENIED ABOUT THE INFORMATION IN COMPLIANCE NOTICE UNDER SECTION 142(1) OF THE ACT. THE CIT(A) ESCAPED THE ATTENTION FROM THE FACT THAT WHEN ASSESSEE HIMSELF ACCEPTED THE FACT WHICH THE DEPARTMENT SAID THAT THE SHARE TRANSACTIONS WERE BOGUS THEN WHERE IS QUESTION FOR AO TO NOTE AND DISCUSS THE EVIDENCES OR TO COLLECT EVIDENCES TO SA Y THAT THE SHARE TRANSACTIONS SHOWN BY THE ASSESSEE ARE SHAM ONE. BE CAUSE FACTS OF THE CASE ITSELF SELF SPEAKING. THE FINDING OF THE CIT(A ) IS WITHOUT APPRECIATING FACTS OF THE CASE. THEREFORE, THE FIN DING OF THE CIT(A) CANNOT BE UP HELD. 9.23 AS REGARDS JUDGMENTS ON WHICH THE ASSESSEE AND CIT(A) RELIED UPON IT IS TO STATED AS ALSO STATED ABOVE THAT SU CH CASES ARE TO DECIDE CONSIDERING THE FACTS OF THE EACH CASE. ON CONSIDER ATION OF THE FACTS OF THE CASE UNDER CONSIDERATION WE FIND THAT FACTS OF THOSE CASES ARE DISTINGUISHABLE AS THOSE CASES WERE DECIDED CONSIDE RING FACTS OF RESPECTIVE CASE WHICH ARE NOT SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDERATION. IN THE CASE UNDER CONSIDERATION THE AO WHILE ASCERTAINING ITA NO.96/AGR/2011 A.Y. 2002-03 . 39 THE TOTAL INCOME CHARGEABLE TO TAX WAS IN A POSIT ION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCOME CONCEALE D OR OF WHICH FALSE PARTICULARS ARE FURNISHED. WHERE IN THE CONSTITUEN TS OF INCOME RETURNED, SUCH SPECIFIC OR DEFINITE PARTICULARS OF INCOME ARE DETECTED 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 THE AO SPECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DETECTED AS INACCURATE, THEREFORE SUCH FIGURE WILL ALSO MAKE THE TOTAL INCOME INACCUR ATE IN PARTICULARS IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE . WE FIND THAT THE CIT(A) HAS WRONGLY CANCELLED THE PENALTY, THEREFORE , WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ORDER OF THE A. O. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLO WED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NO.96/AGR/2011 A.Y. 2002-03 . 40 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY