TaxTMI 
TaxTMI 
2016 (11) TMI 792
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....criminating documents were found and impounded under section 133A(3)(ia) of the Income-tax Act, 1961. The survey resulted into undisclosed investment in purchase of agricultural lands and other properties, which was noticed and admitted by the directors of the appellant. It was noticed on perusal of the incriminating documents found at the site office of the company located at village Mehala District Jaipur, that these included loose papers having details in respect of purchase of agricultural lands and the actual purchase consideration paid. It, inter alia, was noticed on perusal of the loose papers that the purchase consideration was recorded at a lesser value than the actual value of the transaction. During the course of survey, statements of some of the persons, namely, Nagesh Bhaskar s/o. Chet Ram, and Ram Kishore Jat s/o Ram Lal Jat were recorded. The statements of Nagesh Bhaskar and Ram Kishore Jat were provided to Sunil Bansal, director, and thereafter statements of Sunil Bansal, one of the directors of the appellant, were recorded and the statements of Sunil Bansal were confirmed by Atma Ram Gupta and Vimal Singhvi the other two directors, wherein surrender was sought to b....
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.... (i) Considering the income offered of Rs. 30,23,672.00 as unexplained investment under section 69B by the then learned Income-tax Officer have been rejected by the Hon'ble Commissioner of Income- tax (Appeals) Jaipur in his order dated October 16, 2008. (ii) The learned Assessing Officer's observation that the revised return filed by the assessee was not voluntary but as a result of survey operation, has also been rejected by the Hon'ble Commissioner of Income-tax (Appeals) Jaipur. After order of the learned Commissioner of Income-tax (Appeals), Jaipur there is no concealed income and no penalty can be imposed. You are therefore requested to kindly drop the penalty proceedings." However, the Assessing Officer vide order dated March 26, 2010, being not satisfied with the explanation offered, imposed a penalty of Rs. 1,01,76,653 under section 271(1)(c) of the Act. The Assessing Officer held that the surrender was not voluntary and it was only after the survey operation and after incriminating documents having been noticed and found and statements having been recorded, the assessee per force had to surrender and to file revised return. 6. The said ....
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....ent. In the case under consideration before me, as already noted, there was survey at the assessee's premises. During the course of sur vey, various incriminating documents, including the purchase deed for purchase of agricultural land, were found. The statements of the employees were recorded. On the basis of those documents and statements, it was established that the assessee was recording the purchase of the land at a much lesser value than the actual purchase price. When these facts were confronted to the director of the company, he admitted to have made the cash payment for purchase of agricultural land which was not recorded in the books of account. He, with the help of those documents, prepared a detailed chart and worked out the unrecorded investment in the land by the assessee-company in three assessment years. The revised return was filed to include those unexplained investment in the purchase of agricultural land. Therefore, it is a case where the revised return is filed by the assessee after the detection of understatement of purchase price by the survey authorities. It is not a case where the revised return was furnished by the assessee voluntarily to buy peace wit....
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....ject to non initiation of penalty proceedings and once there was subjective offer/surrender, the Assessing Officer was precluded from initiating the proceedings under section 271(1)(c) of the Act. He further contended that merely making of surrender in a peculiar situation and there being no documentary evidence on record to show payment of any "on money" or to suggest any unexplained investment in stock, and even the surrender was tax neutral as there was no tax when there was no sale, and there was no occasion for the assessee to have not disclosed the said amount. He further contended that there being difference of opinion between the Members of the Tribunal, substantial questions of law arise out of the order of the Tribunal as the order of the learned Third Member as also the Judicial Member is perverse. He relied upon the following judgments : T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC) ; CIT v. Anwar Ali [1970] 76 ITR 696 (SC) ; CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC) ; CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) ; CIT v. Punjab Tyres [1986] 162 ITR 517 (MP) ; CIT v. Suraj Bhan [2007] 294 ITR 481 (P&H) ....
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....nnexure "A", * Portions in vernacular not printed here-Ed. stating about undisclosed investment in purchase of the various properties during the following assessment years : (Rs.) 2006-07 3,02,33,672 2007-08 5,57,72,494 2008-09 5,68,10,943 Total 14,28,17,110 Rounded off 15 crore 10. Thus, taking into consideration the material on record and voluminous documents found during the course of survey, in our view, the statements and offering of income during the course of survey, cannot be said to be voluntary as it was clear cut admission by not only Sunil Bansal but other two directors as well, who were also present at the time of statements who took into consideration the categorical statements of the various persons/ associates of the assessee and the directors clearly admitting about the purchase through these key persons/associates. It is only when faced with the statements as also the unrecorded/recorded documents found at the business premises that the assessee came with a surrender. It is also appropriate to observe that though the statements offering surrender was made by Sunil Bansal coupled with the confirmation by the ot....
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.... In our view, when the assessee failed to discharge the onus laid down upon it, and did not offer any cogent explanation except a small letter dated March 2, 2010 which has been reproduced in para 5 hereinbefore, during the penalty proceedings before the Assessing Officer, there is no option but to uphold the findings of fact by all the three Authorities confirming the levy of penalty. Even otherwise, the breach of civil obligation which attracts a penalty under the provisions of an Act would immediately attract the levy of penalty, irrespective of the fact whether contravention was made by the defaulter with any guilty intention or not. A very heavy onus was placed on the assessee to explain the difference between the assessed income and returned income and the assessee did not discharge the said onus. In the light of the discussion made above and conduct of the assessee, it is thus clear that all the material facts and particulars relating to the assessee's computation of income were never disclosed by the assessee, and it is only as a result of survey that a clear picture came out on the surface. Admittedly, the statements of the persons or/and the three directors have never....
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....timately completed on a total income of Rs. 3,15,201 which included a sum of Rs. 3,09,645 as income from business. The Madras High Court taking into consideration the aforesaid facts, held that the assessee had intentionally and deliberately concealed the particulars of his income in the first return as well as in the second return, he cannot escape the liability to penalty. 16. The Allahabad High Court in the case of Addl. CIT v. Radhey Shyam [1980] 123 ITR 125 (All), held that even filing of revised return is of no avail and benefit cannot be claimed by a person filing original return knowing it to be false and penalty was leviable on the basis of original return. 17. The apex court in a recent judgment in the case of MAK Data P. Ltd. v. CIT [2013] 358 ITR 593 (SC), had an occasion to consider a case where the original return was filed disclosing an income of Rs. 16,17,040 along with tax audit report, and during the course of assessment proceedings, the Assessing Officer noticed certain documents comprising share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income-tax returns and assessment orders and blank share transfer....
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....ssed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the Revenue to show that the amount in question constituted the income and not otherwise. The assessee in that case had already stated that he had surrendered the additional sum of Rs. 40,74,000 with a view to avoid litigation, buy peace and to channelise the energy and resources towards productive work and to make amicable settlement with the Income-tax Department. The statute does not recognize these types of defences under Explanation 1 to section 271(1)(c) of the Act. It is trite law that voluntary disclosure does not release the appellant-assessee from the mischief of penal proceedings. Law does not provide that when an asses see makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. Holding so, the judgment of the Tribunal was set aside and the appeal filed by the Revenue was allowed. The apex court further observed as under (page 598 of 358 ITR) : "We are of the view that the surrender of income in this case is not voluntary in the sense t....
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....surrender was made by the assessee herein, as in the case of MAK Data P. Ltd. (supra). Rather in the instant case, we find that there are not only documents of several unrecorded purchases coupled with the statements of not only the employees and key persons who had purchased the properties but also of the three directors accepting in unequivocal terms the undisclosed investment and detailing by way of separate annexures, the manner in which undisclosed investment was made year-wise. Therefore, the judgment of MAK Data P. Ltd. (supra) is squarely applicable. 19. Taking into consideration the above facts and circumstances, and particularly when voluminous documents and statements of various persons, as referred to hereinbefore, in our view it is a proved case of concealment of income and we are also of the view that penalty was rightly imposed by the Assessing Officer and has rightly been upheld by both the appellate authorities in unison based on evidence and is a finding of fact. 20. We may also deal with some of the case law cited by the learned counsel for appellant. 21. In the case of T. Ashok Pai v. CIT (supra) tax matters of the said assessee were looked after for a ....