ITO, Vellore v. M/s. Sankar Sarees, Arni

ITA 158/CHNY/2010 | 2003-2004
Pronouncement Date: 08-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 15821714 RSA 2010
Assessee PAN AAAFS8132M
Bench Chennai
Appeal Number ITA 158/CHNY/2010
Duration Of Justice 1 year(s) 4 month(s) 23 day(s)
Appellant ITO, Vellore
Respondent M/s. Sankar Sarees, Arni
Appeal Type Income Tax Appeal
Pronouncement Date 08-07-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 08-07-2011
Assessment Year 2003-2004
Appeal Filed On 15-02-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A .M. I.T.A. NOS. 158 159 AND 160/MDS/2010 ASSESSMENT YEARS: 2003-04 04-05 AND 05-06 THE INCOME TAX OFFICER WARD I (3) VELLORE. VS. M/S. SANKAR SAREES NO.51 PALANI ANDAVAR KOIL ST. ARNI. [PAN:AAAFS8132M] I.T.A. NOS.161 162 163 AND 164/MDS/2010 ASSESSMENT YEARS: 2002-03 03-04 04-05 AND 05-06 THE INCOME TAX OFFICER WARD I (3) VELLORE. VS. M/S. SANKAR SILKS NO.51 PALANI ANDAVAR KOIL ST. ARNI. [PAN:AAAFS8134M] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P JACOB ASSESSEE BY : MS. MAYA J. NICHANE ORDER PER BENCH THESE SEVEN APPEALS OF THE DEPARTMENT ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LD. CIT(A) IX CHENNAI ALL DATED 10.1 1.2009 IN TWO GROUP CASES AGAINST DELETION OF DIFFERENT AMOUNTS OF PENALTIES IMPOSED UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEARS 2002-03 03-04 04-05 AND 05-06. 2. THESE APPEALS WERE HEARD TOGETHER AND INVOLVE C OMMON ISSUE THEREFORE BEING DISPOSED OF BY THIS SINGLE ORDER F OR THE SAKE OF CONVENIENCE. 3. THE DEPARTMENT IN THESE CASES HAS RAISED ALMOST IDENTICAL GROUNDS WITH DIFFERENCE IN AMOUNT OF PENALTY LEVIED BY THE ASSES SING OFFICER AND DELETED BY THE LD. CIT(A) AND RELEVANT IDENTICAL EFFECTIVE GR OUNDS NO 2 TO 2.6 ARE AS UNDER: 2 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 2. THE LD. CIT(A) HAS ERRED IN DELETING THE PENALT Y OF RS.4.00 LAKHS FOR A.Y. 2003-04 (RS. 5.00 LAKHS FOR A.Y. 2 004-05 RS.3.60 LAKHS FOR A.Y. 2005-06 IN THE CASE OF M/S. SANKAR S AREES AND RS.4.00 LAKHS FOR A.Y. 2002-03 RS.3.75 FOR A.Y. 20 03-04 RS.3.50 LAKHS FOR A.Y. 2004-05 RS.5.60 LAKHS FOR A.Y. 2005 -06 IN THE CASE OF M/S. SANKAR SILKS) LEVIED U/S.271(1)(C). 2.1. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FA CT THAT DURING THE COURSE OF ASSESSMENT CERTAIN AMOUNTS NOT EARLI ER OFFERED FOR TAXATION WERE OFFERED AS INCOME AND IT WAS ONLY UPO N INITIATION OF SURVEY PROCEEDINGS THE ASSESSEE HAD COME FORWARD T O SURRENDER THE AMOUNTS HENCE THIS ACTION CAN BY NO STRETCH OF IMA GINATION BE CALLED A VOLUNTARY ACT. 2.2. THE LD. CIT(A) FAILED TO NOTE THAT IN THE REPL Y TO THE NOTICE U/S.271(1)(C) THE ASSESSEE DID NOT OFFER ANY CREDIBLE EXPLANATION INDICATING THE REASONS FOR WHICH THE AMOUNT HAD NOT BEEN DISCLOSED IN THE ORIGINAL RETURN AND HENCE THE SURRENDER COUL D NOT BE TREATED AS VOLUNTARY. 2.3. THE LD. CIT(A) FAILED TO CONSIDER THAT THE PEN ALTY WAS LEVIED ON ACCOUNT OF INFLATED PURCHASE OF JARI BY CREATING BO GUS PURCHASE BILLS BY THE ASSESSEE FIRM AND NOT ON ACCOUNT OF HIGHER I NCOME HAVING BEEN SUBSEQUENTLY DECLARED BY THE ASSESSEE FIRM. 2.4. THE LD. CIT(A) FAILED TO CONSIDER THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF V. VENUGOP AL CHETTIAR VS. CIT 153 ITR 376 (MDS.) WHEREIN IT WAS HELD THAT THE PEN ALTY PROCEEDINGS ARE INDEPENDENT OF ASST. PROCEEDINGS AN D IT CANNOT BE SAID THAT THE A.O. SHOULD IGNORE ALL THE MATERIA LS COLLECTED AT THE ASST. STAGE INCLUDING ADMISSION MADE BY THE ASS ESSEE. IT IS WELL ESTABLISHED IN LAW BY SEVERAL RULINGS OF COURS E THAT ONCE THERE IS ADMISSION OF CONCEALMENT AND VOLUNTARY OFF ER BY THE ASSESSEE THERE IS NO ONUS ON THE DEPARTMENT TO PROV E CONCEALMENT WITH ANY POSITIVE MATERIAL. 2.5. THE LD. CIT(A) FAILED TO CONSIDER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P.MADHUSUDHANAN 251 ITR 99 WHEREIN IT WAS HELD THAT THE ASSESSEE HAD AGREED TO THE ADDITION IN DISPUTE BECAUSE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE SUPPORTING ITS CLAIM AND THEREFORE THE A.O. HAS RIG HTLY LEVIED THE PENALTY U/S.271(L)(C) OF THE ACT. 2.6. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE DE CISION OF THE HON1BLE APEX COURT IN THE CASE OF UOI VS. DHARMENDR A TEXTILES PROCESSORS AND OTHERS ( 306 ITR 277) WHEREIN IT WAS HELD THAT THE EXPLANATION APPENDED TO SEC. 271(1)(C) OF THE IT AC T ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR CON CEALMENT OR FOR GIVING 3 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 INACCURATE PARTICULARS WHITE FILING THE RETURN AND THAT THE OBJECT BEHIND THE ENACTMENT OF SEC. 271(1)(C) READ WITH THE EXPLA NATIONS INDICATES THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. 4. WE SHALL FIRST DEAL WITH ITA NO 158 AND 159/MDS /2010 IN RELATION TO DELETION OF PENALTIES IMPOSED FOR THE ASSESSMENT YE AR 2003-04 AND 04-05 IN THE CASE OF SHANKAR SAREES. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM INVOLVED IN MANUFACTURING AND TRAD ING OF SILK SAREES. THE ASSESSEE FIRM CARRIED ON ITS BUSINESS IN THE NAME A ND STYLE OF M/S. SANKAR SAREES AT ARANI. THE ASSESSEE FILED RETURN OF INCOM E FOR THE ASST.YEARS 2003- 04 AND 2004-05 ADMITTING A TOTAL INCOME AT RS. 1 01 510/- AND RS. 93 120/- RESPECTIVELY. A SURVEY U/S 133A WAS CONDUCTED IN T HIS GROUP CASE ON 15.3.2007. CONSEQUENT TO THE SURVEY THE ASSESSEE F IRM HAD FILED SUBSEQUENT RETURNS STATED TO BE REVISED RETURNS OF INCOME FOR THE ASST.YEARS UNDER CONSIDERATION ON 29-03-2007 BY OFFERING ADDITIONAL INCOME AS FOLLOWS: 2003-04 - RS.7 20 000/- 2004-05 - RS.5 71 200/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE PE NALTY PROCEEDINGS WERE INITIATED AND AFTER DUE NOTICE TO THE ASSESSEE AND CONSIDERING THE REPLY FILED IN RESPONSE TO THE PENALTY NOTICE THE ASSESSING OFFIC ER IMPOSED PENALTIES OF RS.4.00 LAKHS AND RS.5.00 LAKHS FOR THE ASSESSMENT YEARS 2003-04 AND 04-05 RESPECTIVELY. 5. AGGRIEVED BY THE ORDERS OF THE ASSESSING OFFICE R THE ASSESSEE TOOK UP THE MATTERS IN APPEAL BEFORE THE FIRST APPELLATE AU THORITY AND FILED SUBMISSIONS RAISING VARIOUS PLEAS CITING CASE LAW ETC.: 4 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 6. THE LD. CIT(A) WHILE CONSIDERING AND ACCEPTING THE PLEAS OF THE ASSESSEE AND WHILE REFERRING TO THE HONBLE P&H HIG H COURTS DECISION IN THE CASE OF CIT V. SURAJ BHAN 159 TAXMAN 26 AND THE HON BLE SUPREME COURTS DECISION IN THE CASE OF CIT VS. SURESH CHANDRA MITT AL 251 ITR 9 HAS OPINED THAT THIS CASE IS NOT FIT FOR IMPOSITION OF PENALTIES FO R EITHER OF THE YEARS SO HE DELETED THE PENALTIES OF RS..4.00 LAKHS FOR THE ASS ESSMENT YEAR 2003-04 AND RS. 5.00 LAKHS FOR THE ASSESSMENT YEAR 2004-05. 7. AGGRIEVED BY THIS ORDERS OF THE LD. CIT(A) THE DEPARTMENT HAS COME UP IN APPEAL AND IT WAS STRONGLY PLEADED THAT THE ASSE SSEE FILED ITS RESPECTIVE RETURNS FOR THE ASSESSMENT YEARS 2003-04 AND 04-05 THOUGH BELATEDLY DURING THE RELEVANT ASSTT YEARS AND LATER ON SURVEY WAS C ONDUCTED ON THE ASSESSEES FIRM ON 15.03.2007 IN WHICH SOME UNACCOUNTED PURC HASE INVOICES OTHER MATERIAL AND INCRIMINATING DOCUMENTS WERE FOUND WH ICH WERE LATER ON SEIZED AND IN THOSE DOCUMENTS IT WAS FOUND THAT THERE IS ADDITIONAL INCOME OF RS..7.20 LAKHS FOR THE ASSESSMENT YEAR 2003-04 AND RS.5 71 2 00/- FOR THE ASSESSMENT YEAR 2004-05 WHICH CAME TO BE OFFERED BY THE ASSES SEE ON ACCOUNT OF SURVEY IN RESPECT OF BOGUS PURCHASES OF JARI AND SIPHONING OF AMOUNTS REPRESENTING SUCH PURCHASES THROUGH ISSUE OF BEARER CHEQUES IN V ARIOUS NAMES AND APPROPRIATING THE AMOUNTS. FURTHER AN ANALYSIS OF BANK ACCOUNT AND BOOKS OF ACCOUNT OF THE ASSESSEE-FIRM SHOWED THAT PAYMENTS W ERE MADE TO THESE PARTIES BY MEANS OF BEARER CHEQUES WHICH WERE EN-CA SHED BY THE ASSESSEE OR ITS MEN LOCALLY WHICH RESULTED IN FILING SUBSEQUEN T RETURNS AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ABOVE FACTS W ERE PUT FORTH BEFORE THE 5 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 PARTNER AND THEIR REPRESENTATIVE THEREBY PROPOSING TO BRING TO TAX THE INFLATED PURCHASES AFTER CONSIDERING THE AMOUNT OF SUCH INF LATED PURCHASES ADMITTED IN THE SUBSEQUENT RETURNS FILED DURING POST SURVEY ACT ION UNDER SECTION 133A OF THE ACT. RESPONDING TO THE PROPOSAL MADE THEY HAVE ADMITTED MAKING BOGUS PURCHASES OF JARI BY STATING THAT SUCH BOGUS PURCHA SES WERE INCLUDED IN THE SUBSEQUENT RETURNS FILED CONSEQUENT TO THE SURVEY. THE LD. AR OF THE ASSESSEE HAS FURTHER EXPLAINED THAT NOT ALL THE PURCHASES WE RE BOGUS AND SOME OF THESE PURCHASES WERE GENUINE AND THAT THE ASSESSEE IS MAN UFACTURING AND TRADING SILK SAREES FOR WHICH JARI IS AN ESSENTIAL RAW MATE RIAL. CONSIDERING THE ASSESSEES SUBMISSIONS AND IN THE ABSENCE OF QUANTI TATIVE DETAILS OF SUCH BOGUS PURCHASES GROSS PROFIT RATE OF 25% AGAINST DECLARED PROFIT RATE AT 23.87% FOR 2003-04 AND 21.85% FOR 2004-05 WAS ADOPTED TO MAKE FURTHER ADDITIONS OF RS 164074/- AND RS.476883/- RESPECTIVE LY FOR THESE TWO YEARS AND SUCH ASSESSMENTS HAVE BEEN ACCEPTED BY THE ASSESSEE 7.1 THE ASSESSEES REPRESENTATIVE IN THE PENALTY P ROCEEDING HAS SIMPLY STATED THAT IT HAS FILED REVISED RETURN OF INCOME V OLUNTARILY BEFORE ANY INVESTIGATION BY THE DEPARTMENT AMOUNTS OFFERED AS GROSS PROFIT SHOW THE GENUINENESS OF THE TRANSACTION AND MOREOVER WITHO UT PURCHASES THE SALES DECLARED CANNOT BE ACCOUNTED AND EVEN THOUGH THE SO URCES ARE AVAILABLE FOR THE PURCHASE BUT THE PURCHASERS ARE UNTRACEABLE AT THE TIME OF ASSESSMENT AND AGREED TO BUY PEACE WITH THE DEPARTMENT AND HIGHER PROFIT RATE WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAD CONCEALED P ARTICULARS OF ITS INCOME AND WHEN INCOME IS ESTIMATED AND ADDITIONS ARE MADE ON ESTIMATION BASIS THERE 6 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 CANNOT BE CONCEALMENT AND THE LD. CIT(A) JUST ACCEP TED THE PLEA OF THE ASSESSEE. SO THE LD. DR STRONGLY PLEADED THAT SINC E DETECTION MADE IN THE SURVEY HAS PROMPTED THE ASSESSEE TO FILE SUBSEQUENT RETURN AS DEFINITE MATERIAL WAS FOUND OUT SO DIFFERENCE IN AMOUNT OF INCOME IN SUBSEQUENT RETURN AND INCOME DECLARED IN THE ORIGINAL RETURN AMOUNTS TO F URNISHING OF INACCURATE PARTICULARS OF INCOME WHICH AMOUNTS TO CONCEALMENT SO PENALTY IS EXIGIBLE WHICH HAS RIGHTLY BEEN IMPOSED BY THE ASSESSING OFF ICER AND THE LD. CIT(A) WAS NOT CORRECT IN DELETING THE PENALTY. RELIANCE WAS P LACED ON 283 ITR 230 (MAD) 119 ITD 362 (CHENNAI) AND 219 ITR 157(MAD) TO PLEAD THAT PENALTY COULD LEGALLY BE IMPOSED EVEN AFTER INCOME IS ASSESSED ON ESTIMATE BASIS WHEN IN THIS CASE DEFINITE MATERIAL HAS BEEN FOUND DURING T HE COURSE OF SURVEY AND THE ASSESSEE ITSELF HAS ADMITTED THAT THERE ARE PURCHAS ES WHICH ARE NOT ACCOUNTED FOR SO IT CANNOT BE SAID THAT ADDITIONAL INCOME IN THE SUBSEQUENT RETURNS HAVE BEEN SHOWN OUT OF FREE WILL BECAUSE IT IS A CLEAR C ASE OF DETECTION AND ONLY ADDITION OF SMALL FRACTION OF GP AROUND 1% HAS BEEN MADE BY THE ASSESSING OFFICER KEEPING IN VIEW RELEVANT MATERIAL AND SURR OUNDING CIRCUMSTANCES OF THE CASE WHEN THE ASSESSEE DID NOT AGITATE SUCH ADDITI ON ON QUANTUM SIDE. THEREFORE PENALTY GETS ATTRACTED AND BEING EXIGIBL E IN THIS CASE REQUIRES TO BE RESTORED. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PERIOD INVOLVED IS FROM 2001-2007 AND PURCHASERS AFTER A GAP OF SO MA NY YEARS COULD NOT BE TRACED OUT OTHERWISE THERE IS EVERY GENUINITY IN THE TRANSACTION AND MOREOVER SALE CANNOT BE WITHOUT PURCHASE AND IT IS A CASE OF PURE ESTIMATION THEREFORE 7 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 PENALTY IS NOT EXIGIBLE WHICH HAS RIGHTLY BEEN DEL ETED BY THE LD. CIT(A) WHOSE ACTION DESERVES TO BE CONFIRMED. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANC E PETROPRODUCTS (P) LTD. [2010] 322 ITR 158 (SC) AND IT WAS PRAYED FOR UPHOL DING THE ORDER OF THE LD. CIT(A). 9. IN ORDER TO COUNTER THE SUBMISSION OF THE LD. C OUNSEL FOR THE ASSESSEE THE LD. DR SUBMITTED THAT THE RELIANCE PETROPRODUCT S (P) LTD.S CASE IS NOT APPLICABLE TO THE FACTS OF THE CASE IN HAND BECAUSE IT IS NOT A CASE OF MAKING AND REJECTION OF BONAFIDE CLAIM THEREFORE THE ORD ER OF THE LD. CIT(A) FOR ALL THE YEARS DESERVES TO BE REVERSED WHICH MAY BE REVERSE D. OTHERWISE THE SUBSEQUENT RETURNS FILED BY THE ASSESSEE FOR THESE TWO YEARS COULD NOT BE REVISED AS ORIGINAL RETURNS ARE BELATEDLY FILED AN D ALSO THESE SUBSEQUENT RETURNS ARE NOT WITHIN THE STIPULATED TIME AS ENVIS AGED UNDER SECTION 139(5) AND DEFINITE DETECTION ON THE BASIS OF MATERIALS FO UND IN THE SURVEY IS THERE SO PENALTY IS EXIGIBLE IN THIS CASE. 10. AFTER HAVING HEARD BOTH THE SIDES CONSIDERING THE MATERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY THE RIVAL SIDES WE FIND THAT SO FAR AS FIRST YEAR IN THE CASE OF M/S. SANKAR SAREES IS CONCERNED THE ASSESSEE FILED RETURN ON 14.11.2003 IN WHICH ORIGINAL INCOME DECLARED WAS R S.1 01 510/- AND CONSEQUENT UPON THE SURVEY CONDUCTED UNDER SECTION 133A ON 15-03-2007 THE ASSESSEE FILED SUBSEQUENT RETURN STATED TO BE REVIS ED RETURN OF INCOME ON 29.03.2007 OFFERING AN ADDITIONAL INCOME OF RS.7 20 000/- AND SIMILARLY FOR THE ASSESSMENT YEAR 2004-05 ORIGINAL RETURN WAS FILED ON 09.09.2004 IN WHICH 8 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 INCOME WAS DECLARED AT RS.93 120/- SUBSEQUENT RETU RNS STATED TO BE REVISED RETURN OF INCOME WAS FILED ON 29.03.2007 OFFERING AN ADDITIONAL INCOME OF RS.5 71 200/- ON ACCOUNT OF BOGUS PURCHASE OF JARI. BOTH THESE SO FILED SUBSEQUENT RETURNS ALLEGED TO BE REVISED RETURN WER E TREATED AS INVALID RETURNS AND NOTICE UNDER SECTION 148 WAS ISSUED ON 30.05.20 07 CALLING FOR FILING OF THE RETURN FOR THESE YEARS IN RESPONSE TO WHICH THE A SSESSEE VIDE LETTER DATED 11.06.2007 SUBMITTED THAT RETURNS FILED ON 29.03.20 07 FOR BOTH THE YEARS MAY BE TREATED AS IN RESPONSE TO NOTICE UNDER SECTION 1 48 AND CERTAIN ADDITIONS WERE MADE IN REASSESSMENT COMPLETED AFTER DUE OPPOR TUNITY TO THE ASSESSEE AND CONSIDERING ITS REPLY ETC. AT RS. 9 85 584/- A ND RS. 11 41 203/- BY TWO SEPARATE ASSESSMENT ORDERS BOTH DATED 31.12.2008. ( AND SUCH ASSESSMENTS STATED TO HAVE BEEN ACCEPTED BY THE ASSESSEE). AT THE SAME TIME PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED FOR BOTH THE YEARS AND AFTER DUE NOTICES TO THE ASSESSEE AND CONSIDERING ITS REP LY IMPUGNED PENALTIES WERE IMPOSED FOR THESE YEARS AND DELETED IN APPEALS MAIN LY CONSIDERING VOLUNTARY ACT OF ASSESSEE IN FILING REVISED RETURNS. 10.1 NOW IT IS TO BE SEEN WHETHER SUBSEQUENT RET URNS FILED COULD BE TREATED AS REVISED RETURNS AND SAME COULD BE CONSIDERED FOR DELETION OF PENALTIES IMPOSED BY THE ASSESSING OFFICER SO IT WOULD BE AP T TO DISCUSS RELEVANT PROVISION WHICH IS CONTAINED IN SECTION 139 (5) WHI CH READS AS UNDER: (5) IT ANY PERSON HAVING FURNISHED A RETURN UNDER SUB-SECTION (1) OR IN PURSUANCE OF A NOTICE I9SSUED UNDER SUB-SECTION (1) OF SECTION 142 DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WH ICHEVER IS EARLIER. .. .. . . 9 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 SINCE THE REVISED RETURN CAN BE FILED ONLY IF THE O RIGINAL RETURN AS FILED WITHIN DUE DATE: A RETURN FILED ONLY U/S 139( 1) CAN BE REVISED I.E. ONLY RETURN FILED WITHIN THE DUE DATE AS PRESC RIBED U/S 139(1) CAN BE REVISED. A BELATED RETURN FILED U/S 139(4) CANNO T BE REVISED. THUS IF A RETURN IS FILED AFTER THE DUE DATE THEN IT CAN NOT BE REVISED. THIS VIEW HAS ALSO BEEN CONFIRMED IN KUMAR JAGDISH CHAND RA SINHA V. CIT 220 ITR 67 (SC). 10.1 AND TO INTERPRET THE IMPLICATION OF REVISED RE TURN IN THE CONTEXT OF PENALTY UNDER SECTION 271(1)(C) THE HONBLE GAUHATI HIGH C OURT IN F.C. AGARWAL V. CIT [1976] 102 ITR 408 THIS COURT HELD AS UNDER (PAGE 419): . TO AVOID THE PENALTY PROCEEDING AS CONTEMPLATE D UNDER SECTION 271(1)(C) BY REASON OF SUBMISSION OF REVISED RETURN THE REVISED RETURN ITSELF MUST BE WITHIN THE CORRECT AMBIT AND SCOPE O F SUB-SECTION (5) OF SECTION 139 OF THE ACT. IF IT CANNOT BE SAID THAT A REVISED RETURN IN FACT DOES COME WITHIN THE CORRECT AMBIT AND SCOPE OF SEC TION 139(5) THEN IMMUNITY FROM SECTION 271(1)(C) CANNOT BE AVAILED O F BY THE ASSESSEE. 10.2 THE ABOVE SAID DECISION HAS BEEN AFFIRMED BY T HE HONBLE SUPREME COURT IN THE CASE OF G.C. AGARWAL V. CIT 186 ITR 57 1 (SC) AND RELEVANT HEAD- NOTE AND HELD PORTION READS AS UNDER: PENALTY - EXPLANATION TO SECTION 271 (L) (C) - PRE SUMPTION - BURDEN OF PROOF- ASSESSEE FILING REVISED RETURNS SH OWING MUCH LARGER INCOME - NOT ABLE TO ESTABLISH INADVERT ENT MISTAKE OR OMISSION IN ORIGINAL RETURNS - DECISION OF TRIBUNAL ON FACTS THAT PENALTY WAS JUSTIFIED QUAN TUM - DIFFERENCE BETWEEN TAX ASSESSED IN FIRST RETURNS AN D THE TAX ON THE INCOMES ASSESSED SHOULD BE TAKEN AS THE TAX WHICH WOULD HAVE BEEN EVADED-INCOME-TAX ACT 1961 S S. 139(5) 271(1)(C) EXPLN. FROM THE DECISION OF THE GAUHATI HIGH COURT IN F. C . AGARWAL V. CIT [1976] 102 ITR 408 TO THE EFFECT THAT THE APPELLATE TRIBUN AL WAS CORRECT IN HOLDING ON THE FACTS (I) THAT PENALTIES UNDER SECTION 271(1)( C) OF THE INCOME-TAX ACT 1961 READ WITH THE EXPLANATION THERETO WERE JUSTIFIED I N RESPECT OF THE ASSESSMENT YEARS IN QUESTION SINCE THE ASSESSEE HAD FILED REV ISED RETURNS DISCLOSING MUCH LARGER INCOMES THAN THOSE DISCLOSED IN THE ORIGINAL RETURNS BUT WAS UNABLE TO DISCHARGE THE BURDEN OF PROOF UNDER THE EXPLANATION AND (II) THAT FOR THE PURPOSE OF CALCULATION OF PENALTY THE DIFFERENCE BETWEEN TH E TAX ON THE INCOMES SHOWN IN 10 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 THE FIRST RETURNS AND THE TAX ON THE INCOMES ASSESS ED SHOULD BE TAKEN AS THE AMOUNT OF TAX THAT WOULD HAVE BEEN EVADED THE APPE LLANT PREFERRED APPEALS TO THE SUPREME COURT. THE SUPREME COURT DISMISSED THE APPEALS HOLDING THAT THERE WAS NO ERROR OF LAW IN THE ORDER OF THE HIGH COURT. DECISION OF THE GAUHATI HIGH COURT IN F. C. AGARWAL V. CIT [1976) 102 ITR 408 AFFIRMED. CIVIL APPEALS NOS. 213 TO 215 OF 1976. APPEALS BY SPECIAL LEAVE FROM THE JUDGMENT AND ORDE R DATED JULY 16 1975 OF THE GAUHATI HIGH COURT IN INCOME-TAX REFERENCE NO.8 OF 1972. THE JUDGMENT OF THE HIGH COURT IS REPORTED AS F. C. AGARWAL V. CIT [ 1976) 102 ITR 408. ORDER THESE APPEALS ARE BY WAY OF SPECIAL LEAVE GRANTED B Y THIS COURT AGAINST THE JUDGMENT AND ORDER OF THE GAUHATI HIGH COURT DA TED JULY 16 1975. (SEE [1976] 102 ITR 408). THE INCOME-TAX APPELLATE TRIBUNAL REFERRED TWO QUES TIONS TO THE HIGH COURT UNDER SECTION 256(1) OF THE INCOME-TAX ACT. 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). THESE QUESTIONS ARE : '(1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL WAS CORRECT IN HOLDING THAT PENALTIES UNDE R SECTION 271(L)(C) OF THE INCOME-TAX ACT READ WITH THE EXPLANATION TO THAT SE CTION WERE JUSTIFIED IN RESPECT OF THE ASSESSMENT YEARS 1963-64 1964-65 AN D 1965-66 ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT FOR THE PUR POSE OF CALCULATION OF PENALTIES THE DIFFERENCE BETWEEN THE TAX ON THE IN COME SHOWN IN THE FIRST RETURNS AND THE TAX ON THE INCOMES ASSESSED SHALL BE TAKEN AS THE AMOUNT OF TAX THAT WOULD HAVE BEEN AVOIDED ?' ON A DETAILED DISCUSSION THE HIGH COURT ANSWERED B OTH THE QUESTIONS AGAINST THE ASSESSEE. HENCE THESE APPEALS BEFORE T HIS COURT. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES AT LE NGTH WE DO NOT FIND ANY ERROR OF LAW IN THE ORDER OF THE HIGH COURT WAR RANTING INTERFERENCE BY THIS COURT. THE APPEALS FAIL AND ARE ACCORDINGLY DISMI SSED; BUT THERE WILL BE NO ORDER AS TO COSTS. 10.3 SINCE THE ASSESSEE HAS FILED A SUBSEQUENT RET URNS STATED TO BE REVISED RETURNS DECLARING ADDITIONAL INCOME WHICH AS PER T HE PROVISIONS OF SECTION 11 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 139(5) CANNOT BE TERMED OR TREATED AS REVISED RETU RN BECAUSE THE ORIGINAL RETURNS IN THIS CASE WERE NOT FILED WITHIN THE STIP ULATED TIME AS PROVIDED UNDER SECTION 139(1) AND BEYOND TIME. SO SUCH REVISED RE TURNS COULD NOT BE CONSIDERED AT ALL. THAT APART IF THESE ARE PRESUME D TO BE REVISED RETURNS WHETHER BENEFIT OF FILING OF REVISED RETURN COULD B E GIVEN TO THE ASSESSEE TO EXONERATE IT FROM LEVY OF PENALTY IN VIEW OF THE FA CTS AND CIRCUMSTANCES OF THE CASE. IN THIS REGARD IT SHALL HAVE TO BE SEEN WHET HER THE ADDITIONAL INCOME DISCLOSED IN THE SO-CALLED REVISED RETURN WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURNS COULD BE A GROUND FOR NOT IMPOSING THE PENA LTY OR WOULD IT AMOUNT TO CONCEALMENT FOR LEVY OF PENALTY. FILING OF THE REVI SED RETURN BY THE ASSESSEE DOES NOT IN ITSELF EITHER ESTABLISHES ITS BONAFIDE NOR DOES IT NECESSARY IMPLY THAT ASSESSEE HAS CONCEALED THE INCOME. THE CIRCUMSTANCE S IN WHICH THE REVISED RETURN IS FILED WOULD REALLY MATTER. THE REVISED RE TURN CAME TO BE FILED BY THE ASSESSEE UNDER THE CIRCUMSTANCES AND IN THE BACKGRO UND THAT CANNOT BE DIVORCED FROM THE QUESTION OF BONA FIDE OF THE ASSE SSEE. THE RETURNS IN THESE CASES WERE FILED AFTER SURVEY AND INVESTIGATIONS AB OUT GENUINENESS OF THE PURCHASES WHICH WAS UNDERTAKEN BY THE DEPARTMENT A FTER HAVING CONDUCTED SURVEY. THIS FACT HAS NOT BEEN DENIED BY THE ASSESS EE EVEN IN PENALTY PROCEEDINGS. WHAT IS IMPORTANT IS THAT THE ENTIRE P ROCESS OF CONCEALMENT OF INCOME AND MODUS OPERANDI ADOPTED BY THE ASSESSEE H AVING BEEN DISCOVERED ON SURVEY AND POST-SURVEY INVESTIGATION BY THE DEPA RTMENT. FILING OF SO-CALLED REVISED RETURNS COULD NOT BE SAID TO BE AIMED CORRE CTING ANY BONA FIDE ERROR IN THE DISCLOSURE OF THE PARTICULARS OF INCOME. FILING OF RETURNS WAS NOT UNDER THE 12 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 COMPULSION BY CIRCUMSTANCES THAT HAD COME TO LIGHT IN WHICH IT WOULD BECOME DIFFICULT FOR THE ASSESSEES TO AVOID SUBSTANTIAL AD DITION WARRANTED IN SUCH CIRCUMSTANCES. EVEN ASSUMING THAT FILING OF THE REV ISED RETURN WAS NOT UNDER THE COMPULSION WHEN THE DETECTION WAS MADE DURING T HE SURVEY/INVESTIGATION YET THE SAME WOULD NOT BY ITSELF LEAD TO THE CONCLU SION THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO CONCEAL IT S INCOME WHEN IT FILED ITS ORIGINAL RETURN. THE QUESTION WHETHER THERE WAS ANY SUCH INTENTION WOULD DEPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CAS E THAT WOULD THROW LIGHT ON THE MENTAL PROCESS OF THE ASSESSEE AT THE RELEVA NT TIME. SUBSEQUENT CONDUCT MAY BE ONE OF THE FACTORS WHICH CAN BE TAKE N NOTE OF BUT MERE FILING OF A REVISED RETURN MAY NOT BE SUFFICIENT TO EXONERATE THE ASSESSEE. EVEN IF THE DEPARTMENT HAD NOT COME ACROSS ANY FURTHER TANGIBLE EVIDENCE IN REGARD TO THE CONCEALMENT YET SO LONG AS THE QUESTION WHETHER T HERE WAS ANY SUCH CONCEALMENT WAS OPEN BEFORE THE DEPARTMENT AND THE LATER HAD THE OPTION TO INITIATE APPROPRIATE PROCEEDINGS THE SUBMISSION OF REVISED RETURNS BY THE ASSESSEE CANNOT BE VIEWED IN ISOLATION AND MOREOVE R THE ASSESSEE COULD NOT BE ABLE TO ESTABLISH THAT ADDITIONAL INCOME DETECTE D ON CONDUCTING OF SURVEY WAS OFFERED TO TAX VOLUNTARILY BY THE ASSESSEE OF I TS FREE VOLITION WHEN THERE WAS A CLEAR DETECTION ON THE BASIS OF MATERIAL FOUND AN D LATER ON SEIZED DURING POST- SURVEY ACTION AND THE ASSESSEE COULD NOT BE ABLE TO GIVE ANY BONAFIDE REASON OR PROPER EXPLANATION. 11. THE HONBLE MADRAS HIGH COURT IN THE CASE OF M. SAJJANRAJ NAHAR [2006] 283 ITR 230 THE HEAD-NOTES ARE AS UNDER: 13 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 PENALTY CONCEALMENT OF INCOME SATISFACTION OF ASSESSING OFFICER THAT THERE HAS BEEN CONCEALMENT OF INCOME INDICATION IN ASSESSMENT ORDER SUFFICIENT ACCEPTANCE OF REVISED RETURN NOT A BAR TO INITIATION OF PENALTY PROCEEDINGS FINDING BY TRIB UNAL THAT REVISED RETURN WAS NOT BONA FIDE- IMPOSITION OF PENALTY VALID INCOME-TAX ACT 1961 S. 271(1(C). 11.1 SIMILARLY THE HONBLE MADRAS HIGH COURT IN TH E CASE OF M.S. MOHAMMED MARZOOK (LATE) AND ANOTHER VS. ITO [2006] 283 ITR 2 54 (MAD) WHILE CONSIDERING THE CASE OF K. P. MADHUSUDHUDHNAN 251I TR 99 HAS HELD AS UNDER: PENALTY CONCEALMENT OF INCOME REVISED RETURN F ILED AFTER SEARCH PROCEEDINGS FINDING BY TRIBUNAL THAT THERE HAD BEEN CONCEALMENT OF INCOME LEVY OF PENALTY VALID INCOME-TAX ACT 1961 S. 271(1)(C). HELD THAT THE TRIBUNAL ON THE FACTS OF THE CASE FOUND THAT THE OMISSION OR WRONG STATEMENT BY THE ASSESSEE IN THE ORIGINAL RETURN WAS NOT BONA FIDE OR DUE TO ANY INADVERTENCE OR MISTAKE ON HIS PART BUT THE REVISED RETURN WAS FILED ONLY AFTER THE SEARCH ACTI ON. THE LEVY OF PENALTY WAS VALID. 11.2 FURTHER THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. S. KRISHNASMWANY AND SONS 219 ITR 157 THE HEAD-NOTES AND HELD PORTION HAS OPINED AS UNDER PENALTY CONCEALMENT OF INCOME PENALTY CAN BE LEVIED EVEN IF ASSESSMENT IS BASED ON ESTIMATE _ TRANSPORT OPERATO R SEARCH OPERATIONS SHOWING THAT COLLECTIONS FOR A NUMBER OF DAYS HAD B EEN SUPPRESSED ASSESSEE ADMITTING SUPPRESSION AND FILING REVISED R ETURN LEVY OF PENALTY WAS JUSTIFIED INCOME-TAX ACT 1961 S.271(1)(C). XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX PENALTY PROVISIONS CAN BE APPLIED EVEN IN CASES WH ERE ASSESSMENT IS MADE ON THE BASIS OF AN ESTIMATE. IF ON THE ASSESSEES OWN SHOWING THE FILING OF THE ORIGINAL RETURN WAS AN ACT OF CONCEALMENT OF INCOME IT DOES CALL F OR A PENALTY. 14 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 11.3 HONBLE SUPREME COURT IN THE CASE OF B.A. BALA SUBRAMANIAM & BROS. CO. VS. CIT [1999] 157 CTR (SC) 556 AND AT PAGE 557 IT IS HELD AS UNDER: IN THESE APPEALS THE QUESTION INVOLVED RELATES TO THE INTERPRETATION OF THE EXPLN. TO S.271(1)(C) OF THE IT ACT FOR THE PURPOSE OF LEVYING PENALTY ON THE CONCEALED INCOME. THE HIGH COURT ON A REFERENC E HAVING BEEN MADE HAS COME TO THE CONCLUSION THAT AS THE DIFFERENCE B ETWEEN THE INCOME ASSESSED AND THE INCOME RETURNED WAS MORE THAN 20 P ER CENT THEREFORE THE SAID EXPLANATION BECAME APPLICABLE AND THE ITO WAS JUSTIFIED IN IMPOSING PENALTY BECAUSE THE ASSESSEE HAD NOT BEEN ABLE TO DISCHARGE THE ONUS WHICH WAS ON IT UNDER THE SAID EXPLANATION. FO R THE INTERPRETATION OF THE SAID PROVISION WE NEED TO REFER TO THREE DECISI ONS OF THIS COURT VIZ. CIT VS. MUSSADILAL RAM BHAROSE (1987) 60 CTR (SC) 3 4 : (1987) 165 ITR 14 (SC) : TC 50R 474; CIT VS. K.R. SADAYAPPAN (1990 ) 86 CTR (SC) 120 : (1990) 185 ITR 49 (SC): TC 50R 795 AND ADDL. CIT VS. JEEVAN LAL SAH (1994) 117 CTR (SC) 130 : (1994) 205 ITR 244: TC 50 R 973. IN THESE DECISIONS IT HAS BEEN CLEARLY STATED THAT WITH THE INCORPORATION OF THE EXPLN. TO S. 271 THE VIEW WHICH HAD BEEN TAKEN EAR LIER IN CIT VS. ANWAR ALI 91970) 76 ITR 696 (SC): TC 50R 276 NO LONGER H OLDS THE FIELD AND IT IS FOR THE ASSESSEE TO DISCHARGE THE ONUS AS CONTEM PLATED IN THE SAID EXPLANATION. IN VIEW OF THE FACT THAT IN THE INSTAN T CASE THE ONUS HAS NOT BEEN DISCHARGED THE HIGH COURT JUDGEMENT CALLS FOR NO INTERFERENCE. THE APPEALS ARE ACCORDINGLY DISMISSED BUT WITH NO ORDER AS TO COSTS. 11.4 THE HONBLE MADRAS HIGH COURT IN THE CASE OF C IT V. C. ANANTHAN CHETTIAR 273 ITR 401 HAS HELD AS UNDER: PENALTY CONCEALMENT OF INCOME INSERTION OF EXPL ANATION TO SECTION 271(1)(C) EFFECT BURDEN ON ASSESSEE TO PROVE NO N-CONCEALMENT ADDITIONAL INCOME DISCLOSED IN REVISED RETURN AFTER SEARCH AND SEIZURE NO EXPLANATION OFFERED FOR NOT HAVING DISCLOSED INC OME EARLIER TRIBUNAL NOT JUSTIFIED IN SETTING ASIDE PENALTY INCOME T AX ACT 1961 S. 271(1)(C) EXPLN. HELD THAT THE ASSESSEE HAD OFFERED NO EXPLANATION EXCEPT TO ASSERT THAT HE DISCLOSED THE INCOME ONLY TO BUY PEACE WITH THE DEPARTMENT AND WHAT WAS DISCLOSED WAS ADDITIONAL INCOME. THE REASON FOR NOT HAVING DISCLOSED THE INCOME EARLIER WAS NOT STATED. THUS THE TRIBUN AL WAS NOT RIGHT IN HOLDING THAT NO PENALTY SHOULD BE LEVIED WITH REFER ENCE TO THE CONCEALED INCOME SEIZED IN THE FORM OF JEWELLERY AND CASH FOL LOWING THE RATIO OF THE SUPREME COURT IN SIR SHADILAL SUGAR AND GENERAL MIL LS LTD. V. CIT 15 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 [1987]168 ITR 705 EVEN AFTER THE AMENDMENT TO SECTI ON 271 IN 1964 AND 1975. 12. FROM THE RATIO OF ABOVE NOTED DECISIONS AND IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS FOUND THAT THE ASS ESSEE IN THESE CASE HAS NOT FILED VALID REVISED RETURN AS ENVISAGED UNDER SECTI ON 139(5) NOR COULD IT ESTABLISH ITS BONAFIDE ABOUT FILING OF THE SO-CALLE D REVISED RETURNS AS THE RETURNS HAVE BEEN FILED AFTER DETECTION ON SURVEY OF THE SU PPRESSED MATERIAL/ PURCHASES. THEREFORE THE ASSESSEE CANNOT TAKE ANY HELP FROM SUCH RETURNS. SINCE CONCEALMENT PENALTY IS ALSO IMPOSABLE ON THE ESTIMATED INCOME AS HELD BY APEX COURT AS WELL JURISDICTIONAL HIGH COURT WHE N ON FACTS IT DOES NOT GET ESTABLISHED THAT INCOME HAS BEEN ASSESSED ON ESTIMA TED BASIS SO THE PLEA OF THE ASSESSEE IN THIS REGARD IS ALSO UNTENABLE. FUR THER THE ASSESSEE COULD NOT BE ABLE TO EXPLAIN OR ESTABLISH AS TO WHY IT COULD NOT DISCLOSE THE CORRECT INCOME EARLIER BEFORE ITS DETECTION AND WAS ALSO UNABLE TO SHOW ITS BONAFIDES FOR NOT DISCLOSING CORRECT INCOME HENCE IT HAD FAILED TO ESTABLISH ITS BONAFIDE FOR NOT HAVING FURNISHED ALL THE FACTS AND MATERIAL TO THE COMPUTATION OF ITS INCOME AND THERE IS VAST DIFFERENCE BETWEEN INCOME DECLARED AN D INCOME ASSESSED THEREFORE IN OUR CONSIDERED VIEW PENALTY UNDER SE CTION 271(1)(C) IS ATTRACTED IN THIS CASE FOR BOTH THE YEARS. 13. AS SUCH CONSIDERING THE ENTIRETY OF FACTS CI RCUMSTANCES MATERIAL ON RECORD AND THE RATIO OF DECISIONS IN THE PRECEDENT S NOTED AND DISCUSSION HELD ABOVE WE HOLD THAT IT IS A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) AND ACTION OF THE ASSESSING OFFICER IN IM POSING THE PENALTY IS PROPER AND JUSTIFIED. THEREFORE THE ORDER OF THE LD. CIT( A) IS SET ASIDE AND THAT OF THE 16 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 ASSESSING IS RESTORED TO THE EXTENT THAT PENALTY IS ATTRACTED AND IMPOSABLE. SO FAR AS QUANTUM OF PENALTY IS CONCERNED THE ASSESSI NG OFFICERS ORDER IN THIS REGARD IN CALCULATING THE PENALTY ON THE ENTIRE INC OME AS ASSESSED IS FOUND TO BE NOT PROPER AND JUSTIFIED. THEREFORE WHILE RESTO RING THE ORDER OF THE ASSESSING OFFICER ABOUT IMPOSITION OF PENALTY UNDER SECTION 2 71(1)(C) WE IN VIEW OF FACTS CIRCUMSTANCES DIRECT THE ASSESSING OFFICER TO REVI SE THE QUANTUM OF PENALTY BY RESTRICTING IT TO MINIMUM IMPOSABLE AMOUNT ONLY ON THE DIFFERENCE BETWEEN THE INCOME DECLARED IN THE ORIGINAL RETURN AND FINALLY ASSESSED. 14. AS REGARDS APPEAL FOR 2005-06 IN ITA NO. 160/M DS/2010 IS CONCERNED THE RETURN IN THIS CASE CAME TO BE FILED ON 20.10.2 005 ADMITTING TOTAL INCOME OF RS.1 35 290/- WHEN SURVEY WAS CONDUCTED ON 15.03.20 07 AND CONSEQUENT UPON SURVEY THE ASSESSEE FILED REVISED RETURN ON 2 9.03.2007 OFFERING AN ADDITIONAL INCOME OF RS.3 90 000/- AND THE ASSESSME NT WAS FRAMED AT RS.10 33 790/- VIDE ORDER DATED 26.12.2007 AND INIT IATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). AFTER DUE NOTICE TO THE AS SESSEE AND CONSIDERING ITS REPLY PENALTY OF RS.3 60 000/- CAME TO BE IMPOSED AGAINST WHICH THE ASSESSEE PREFERRED APPEAL TAKING THE SAME PLEAS AS TAKEN FOR THE ASSESSMENT YEARS 2003-04 AND 04-05 THE LD. CIT(A) DELETED SUC H PENALTY ON THE SAME BASIS AND REASONING AS GIVEN FOR EARLIER TWO YEARS. AGAINST SUCH ACTION OF LD. CIT(A) THE DEPARTMENT IS IN APPEAL AND WHILE RELYI NG UPON THE ARGUMENTS AS ADVANCED FOR EARLIER TWO APPEALS AND RELYING UPON S AME CASE LAW THE LD. DR PLEADED FOR REVERSAL OF THE ORDER OF LD. CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER BECAUSE THIS IS A CLEAR CASE OF D ETECTION OF CONCEALED 17 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 INCOME AS EVIDENCE AND MATERIAL IN THE SHAPE OF IN VOICES AND VOUCHERS OF DIFFERENT PARTIES WHOSE PURCHASES WERE NOT ACCOUNT ED FOR WERE FOUND DURING THE SURVEY AND PART OF IT WAS OFFERED FOR ASSESSMEN T IN THE SUBSEQUENT RETURN WITHOUT ESTABLISHING OR SHOWING ANY BONAFIDE REASON FOR NOT DISCLOSING SUCH ADDITIONAL INCOME ON THE BASIS OF SUCH PURCHASES I N THE RETURN OF INCOME ORIGINALLY FILED AND THE LD. CIT(A) IS NOT JUSTIFIE D IN DELETING THE PENALTY WHOSE ORDER SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER IS RESTORED WHEREAS LD.AR RELIED ON THE ORDER OF LD. CIT(A) AND PRAYED FOR ITS CONFIRMATION. 15. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MA TERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY THE RIVAL SIDES AND FI ND THAT THERE WAS A VAST DIFFERENCE BETWEEN THE INCOME DECLARED IN THE ORIGI NAL RETURN AND INCOME ASSESSED. NO DOUBT THE ASSESSEE HAS FILED A SUBSEQ UENT RETURN STATED TO BE REVISED RETURN DECLARING PART OF UNACCOUNTED INCOME WHICH AS PER THE PROVISIONS OF SECTION 139(5) CANNOT BE TERMED OR T REATED AS REVISED RETURN BECAUSE THE ORIGINAL RETURN IN THIS CASE WAS NOT FI LED WITHIN THE STIPULATED TIME AS PROVIDED UNDER SECTION 139(1). SINCE THE FACTS CIRCUMSTANCES AND POINT AT ISSUE IS SAME AS FOR THE EARLIER TWO YEARS WITH DIF FERENCE IN AMOUNT OF INCOME ASSESSED AND PENALTY IMPOSED AND BOTH THE SIDES HAV E AGREED AND SUBMITTED THAT THE DECISION TAKEN FOR EARLIER YEARS MAY BE AP PLIED HERE. THEREFORE CONSIDERING THE ENTIRETY OF FACTS CIRCUMSTANCES AN D MATERIAL ON RECORD WE FIND THAT FACTS AND CIRCUMSTANCES AND POINT INVOLVED IN EARLIER TWO YEARS APPEAL AND THE APPEAL FOR THIS YEAR IS SAME THEREFORE WHILE APPLYING OUR DECISION TAKEN FOR EARLIER TWO YEARS FOR THIS YEAR TOO WE REVERSE THE ORDER OF THE LD. CIT(A) AND 18 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 RESTORE THAT OF THE ASSESSING OFFICER WITH REGARD T O IMPOSITION OF PENALTY AND RESTRICT THE PENALTY FOR THIS YEAR TO MINIMUM IMPOS ABLE AMOUNT ON THE DIFFERENCE IN INCOME DECLARED IN THE ORIGINAL RETURNS AND INCO ME FINALLY ASSESSED. 16. AS REGARDS APPEALS IN ITA NOS. 161 162 163 AN D 164/MDS/2010 IN RESPECT OF M/S. SANKAR SILKS ARE CONCERNED FACTS I NDICATE THAT ORIGINAL RETURNS IN THESE CASES FOR THE ASSESSMENT YEAR 2002-03 03-04 04-05 AND 05-06 DECLARING INCOME OF RS.1 00 400/- RS.1 29 860/- R S.72 218/- AND RS.74 110/- RESPECTIVELY WERE FILED DURING THE RELEVANT ASSESSM ENT YEARS. A SURVEY WAS CONDUCTED ON 15.03.2007 AND CONSEQUENT TO SURVEY T HE ASSESSEE FILED SUBSEQUENT RETURN ON 29.03.2007 OFFERING ADDITIONAL INCOME OF RS.4 32 077/- RS.6 00 000/- RS.4 68 000/- AND RS.4 32 000/- AND THESE RETURNS CAME TO BE REGULARIZED BY ISSUE OF NOTICE UNDER SECTION 148 IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THAT RETURNS FILED ON 29.03.2007 SHOULD BE TREATED AS RETURNS IN RESPONSE TO THE NOTICE. IT IS COMMON GRO UND OF BOTH THE SIDES THAT FACTS CIRCUMSTANCES AND POINT AT ISSUE IS SAME WI TH DIFFERENCE OF AMOUNT ONLY AS IS IN THE APPEALS OF THE REVENUE IN THE CASE OF M/S. SANKAR SAREES SO DECISION TO BE TAKEN IN THAT CASE MAY BE APPLIED HE RE TO DECIDE THESE APPEALS. 16.1 AFTER HAVING HEARD BOTH THE SIDES AND CONSIDER ING THE MATERIAL ON RECORD AS WELL AS COMMON GROUND TAKEN BY BOTH THE SIDES W E FIND THAT FACTS ARE ALMOST IDENTICAL WITH DIFFERENCE IN AMOUNTS DECLARE D IN THE RETURNS SUBSEQUENT RETURNS FILED AND ASSESSMENT MADE AND PENALTY IMPOS ED. SINCE THERE IS NO DISPUTE ABOUT THE FACTS AND ISSUE INVOLVED IN THESE CASES AND IN THE CASES OF M/S. SANKAR SAREES AS DECIDED BY US IN EARLIER PA RT OF THE ORDER THEREFORE WE 19 I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. .158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 158 TO 164/MDS/10 ADOPT THE SAME BASIS AND REASONING TO DECIDE THESE APPEALS AND WHILE REVERSING THE ORDER OF THE LD. CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER WITH REGARD TO IMPOSITION OF PENALTY AND WE RESTRIC T THE PENALTIES TO MINIMUM IMPOSABLE AMOUNT ON THE DIFFERENCE IN INCOME DECLAR ED IN THE ORIGINAL RETURNS AND INCOME FINALLY ASSESSED. 17. AS A RESULT ALL THE APPEALS OF THE DEPARTMEN T IN THE CASES OF BOTH THE ASSESSEES ARE TREATED TO HAVE BEEN PARTLY ALLOWED. ORDER PRONOUNCED ON 08 TH JULY 2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 08.07.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.