TaxTMI 
TaxTMI 
2013 (7) TMI 848
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.... the statement accompanying the return of income, the assessee had disclosed the value of closing stock of Rs. 17,88,961 and the sales at Rs.22,77,592. A survey under section 133A was conducted in the assessee's business premises on March 22, 1999. During the survey, it was found that the stock book was not maintained properly and that there were unaccounted sales and unaccounted cash credits, and that there was excess stock of gold, which was not reflected in the books of account. After this was accosted to the assessee, he filed a revised return of income declaring a taxable income of Rs. 9,79,760 showing the closing stock as on March 31, 1995, at Rs. 37,34,245 as against Rs. 17,88,961 declared in the original return of income. The assess....
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....red an appeal before the Tribunal, wherein the Tribunal dismissed the appeal. Hence, the present appeal by the assessee. This appeal was admitted to consider the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the levy of penalty in the absence of recording of satisfaction within the meaning of section 271(1)(c) before initiation of the proceedings under section 271(1)(c) of the Act ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the penalty even though the discrepancy alleged was on March 22, 1999 (date of survey) relating to the assessment year 1999-2000 and the impugned penalty was l....
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....action of the Assessing Officer for initiation of the penalty proceedings under the said clause (c)." The said amendment was inserted by the Finance Act, 2008, with retrospective effect from April 1, 1989. Hence, the said amendment is applicable to the case on hand. The said amendment would indicate that wherein in an order of assessment ; the same contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings. In the instant case, the penalty proceedings have been initiated in the reassessment proceedings and, hence, that itself is deemed to constitute sat....
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.... is 9063 grams. From this it appears that the dosing stock is undervalued. What is the reason for this ? (Please note that this observation is made without taking the closing stock of silver ornaments)" The answer of the assessee was as follows : "Answer : There is some mistake in the computation of value of dosing stock. I will rectify this and file revised returns of income." Question No. 14 was with reference to the physical inventory of gold ornaments taken at the time of survey, which reads as under : "Question No. 14 : As per the physical inventory of gold ornaments taken at the time of survey, the total weight of ornaments (gold) is 16,524,616 grams (net). Apart from this, gold ornaments weighing 2535360 grams were available at your ....
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....ven though the discrepancy was unearthed on the date of survey, the assessee has admitted to the discrepancy for the year 1995-96. Under these circumstances, the Tribunal was justified in passing the impugned order. Accordingly, question No. 2 is answered in favour of the Revenue and against the assessee. Question No. 3 is as to whether the penalty under section 271(1)(c) was exigible when the assessee has filed the return of income voluntarily. When the survey was conducted, it was brought to the notice of the assessee with regard to the discrepancies. The assessee admitted the concealment and, consequently, filed a revised return wherein the admitted undisclosed income as well as the undisclosed stock was disclosed in the return. The asse....
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....case, the concurrent findings are against the assessee. Hence, the said judgment is not helpful to the appellant. Further, reliance was placed on the judgment of the hon'ble Supreme Court in the case of Sudarshan Silks and Sarees v. CIT reported in [2008] 300 ITR 205 (SC). In the said judgment, it was held that the penalty under section 271(1)(c) was not exigible on the facts and circumstances of the case. The Tribunal upheld the findings of the Commissioner of Income-tax (Appeals) by cancelling the levy of penalty under section 271(1)(c) by holding that the revised return were not made on the basis of the incriminating materials found during the search operations. It is apparent that the revised return has been filed as a result of the sea....