High Court Of Bombay At Goa
Jyoti Laxman Konkar vs. CIT
Sections 260A, 271(1)(c)
Asst. Year 1999-2000
Smt. Ranjana Desai & N.A. Britto, JJ.
Tax Appeal No. 9 of 2006
10th July, 2006
Counsel Appeared
S.V. Pikale with S.S. Gurav, for the Appellant : S.R. Rivonkar, for the Respondent
JUDGMENT
N.A. BRITTO, J. :
This is an appeal filed by the assessee under s. 260A(1) of the IT Act, 1961 (Act, for short). Heard Mr. S.V. Pikale, the learned counsel on behalf of the appellant/ assessee, and Mr. S.R. Rivonkar, the learned Government advocate on behalf of the respondent/Revenue.
The assessee had filed a return on 25th Nov., 1999 for the asst. yr. 1999-2000 declaring an income of Rs. 7,40,510. Not satisfied therewith, the AO carried out a survey under s. 133A of the Act and during 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 disclosing additional income of Rs. 18,28,706, and the AO found that the said income was suppressed by the assessee but the said revised return was finalized but at the same time a notice under s. 271(1)(c) of the Act to impose penalty was issued to the assessee and which was disposed of by order dt. 25th May, 2001 and a penalty of Rs. 2,75,000 was imposed upon the assessee. In the said order, the AO observed that the assessee had come forward with the revised return out of compulsion since suppression of income was detected in survey carried out under s. 133A and, therefore, the act of filing a revised return was not voluntary. He also found that the assessee had deliberately attempted to conceal the income.
The assessee carried an appeal to the CIT which came to be disposed of by order dt. 21st Sept., 2001. In allowing the assessee’s appeal, the CIT relied upon the decision in the case of CIT vs. Suresh Chandra Mittal (2000) 158 CTR (MP) 26 : (2000) 241 ITR 124 (MP) as affirmed by the Supreme Court in CIT vs. Suresh Chandra Mittal (2001) 170 CTR (SC) 182 : (2001) 251 ITR 9 (SC). The Revenue carried an appeal to the Tribunal (Income-tax Appellate Tribunal) and Tribunal by order dt. 2nd Jan., 2006 was pleased to allow the same. In disposing of the said appeal of the Revenue, the Tribunal observed that whether an assessee had concealed income or not was a matter of fact and one need not go into the gamut of cases which were decided on the facts of the respective cases. The Tribunal also observed that the filing of the second return (sic–revised) spoke loudly about the conduct of the assessee which could not be said anything else than mala fide (sic– dishonest) and filing of another return did not obliterate the fact of the earlier mala fide (sic– dishonest) return and that the assessee had furnished wrong particulars of the stock with a view to suppress the income and, therefore, was liable to be penalized and thus the AO was justified in levying the minimum penalty in view of the subsequent conduct of the assessee filing another return and paying the due tax.
At the time of admission, Mr. S.V. Pikale, the learned counsel on behalf of the assessee, has submitted that the assessee was entitled to file a revised return in terms of s. 139(5) of the Act at any time as prescribed therein and having filed the same and the AO having accepted the same there was no room to levy any penalty. Reliance has been placed on behalf of the Revenue by Mr. S.R. Rivonkar, learned Government advocate, on the judgments in the cases of Century Flour Mills Ltd. vs. CIT (2000) 162 CTR (SC) 407, CIT vs. Rhone Poulenc Ltd. (2001) 168 CTR (Bom) 45 : (2000) 246 ITR 699 (Bom) and CIT vs. K.P. Sampath Reddy (1993) 109 CTR (Kar) 244 : (1992) 197 ITR 232 (Kar). In the first case, the apex Court observed that the Tribunal having arrived at the finding of concealment of income on the basis of the material on record, no question of law arose, reference of which could be called for. In the second case, the Division Bench of this Court held that whether there was concealment of income or not is a finding of fact and, therefore, no substantial question of law arose on the facts of that case. In the third case, the Karnataka High Court, in a fact situation very similar to the facts of the case at hand, observed that the concealment of the income in the return filed by the assessee was a glaring fact. It further held that the assessee had to thank himself that the ITO levied the limited penalty only.
In the case of K.C. Builders vs. Asstt. CIT (2004) 186 CTR (SC) 721 : (2004) 265 ITR 562 (SC) relied upon on behalf of assessee, the Supreme Court stated that the word “concealment” inherently carried with it the element of mens rea and that the fact that some figures or some particulars have been disclosed by itself, even if it takes out the case from the purview of nondisclosure, would not by itself take out the case from the purview of furnishing inaccurate particulars and mere omission from the return of the item of receipts amounts neither to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances are found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In Bharat Rice Mill vs. CIT (2006) 200 CTR (All) 481 : (2005) 278 ITR 599 (All), a Division Bench of Allahabad High Court reiterated the view that mens rea is an important factor in relation to concealment of income. That was a case where there was non-disclosure of certain profits due to mistake and, therefore, it was held that penalty could not be imposed under s. 271(1)(c) of the Act. In the case of West Bengal State Electricity Board vs. Dy. CIT & Anr. (2005) 198 CTR (Cal) 122 : (2005) 278 ITR 218 (Cal), a Division Bench of Calcutta High Court held that the question regarding jurisdiction of the AO can be raised for the first time before the Tribunal.
In our view, the AO as well as the Tribunal having come to the conclusion that the assessee had filed the initial return dishonestly with a view to conceal the income and the revised return was filed out of compulsion, i.e. after having found that the assessee had concealed the income and filed a false return with a view to avoid tax liability, in our view, no substantial question/s of law arises in this case either in the manner formulated on behalf of the assessee in the memorandum of appeal or otherwise. The CIT allowed the appeal of the assessee by misapplying the said decision of the Division Bench of Madhya Pradesh High Court which had no relevance to the fact situation prevailing in the case at hand. Whether there is concealment of income or not has to be decided with reference to the facts of a given case and the fact finding authorities under the Act having come to the conclusion that in the facts of the case, the assessee had concealed the income initially with a view to avoid the payment of tax, we are of the view that no substantial question of law is involved in this case requiring the admission of the appeal. Consequently, the same is hereby dismissed.
[Citation : 292 ITR 163]
