Rajasthan H.C : There is any justification in sustenance of penalty imposed under section 271(1)(c) of the Income Tax Act

High Court Of Rajasthan

Grass Field Farms & Resorts (P.) Ltd. vs. DCIT

Section : 271(1)(C)

Assessment Year 2006-07

M.N. Bhandari And J.K. Ranka, JJ.

IT Appeal No. 60 Of 2016

June 1, 2016

JUDGMENT

J. K. Ranka, J.-The instant appeal at the instance of the assessee under section 260A of the Income-tax Act, 1961, is directed against the order dated October 27, 2015 passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. It relates to the assessment year 2006-07.

2. Brief facts for disposal of the present appeal, are that the appellant is a private limited company, incorporated on July 12, 2005 and is, inter alia, engaged in developing farm houses at the National highway No. 8 near Village Mehala District Jaipur. It filed return declaring an income of Rs. 1,87,697 on November 29, 2006. A survey operation was directed against the appellant on February 26, 2008 which continued up to February 28, 2008 at the business premises of the appellant and during the survey operation, certain incriminating 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 be made of undisclosed investment and offering income. A show-cause notice was issued during the course of regular assessment proceedings on March 12, 2008, bringing it to the notice of the assessee about the statements recorded of various persons including Sunil Bansal and confirmation by the other directors. It is only thereafter that on March 27, 2008 the assessee sought to file a revised return declaring an additional income offered during the course of survey at Rs. 3,02,33,672. Since the incriminating documents also related to the assessment years 2007-08 and 2008-09 as well, therefore, the assessee offered and furnished revised returns offering therein substantial amounts making total surrender to the tune of Rs. 15 crores, including the assessment year under appeal.

3. Taking into consideration the revised return filed by the assessee, the Assessing Officer added the said amount of Rs. 3,02,33,672, and thus computed the total income at Rs. 3,04,21,370.

4. An appeal came to be filed by the assessee objecting to the addition being made as unexplained investment under section 69B of the Act and not as “business income” as claimed by the appellant. The Commissioner of Income-tax (Appeals), while disposing of the appeal did not interfere with the addition, but only observed that the dispute is not about the quantum but only on account of head of income and since the only activity of the assessee company is trading in real estate, the income offered by the appellant may be “business income” and accordingly directed to tax the income under the head “business income” as against income under section 69B of the Act. The said appellate order became final and was not challenged by the appellant or by the Revenue. Since the addition was made in the assessment order, notice under section 271(1)(c) of the Act was also issued along with the assessment order, and a show-cause notice was issued as to why the penalty proceedings under section 271(1)(c) of the Act may not be initiated for concealment and furnishing inaccurate particulars in respect of the surrendered income.

5. After the appellate order having become final, the Assessing Officer again issued a show-cause notice under section 271(1)(c) of the Act as to why penalty may not be imposed. An explanation was offered by the assessee as under :

“In the above case, it is submitted that :

(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 penalty order was assailed before the Commissioner of Income-tax (Appeals), who also upheld the imposition of penalty taking into consideration not only the various submissions of the appellant, but also taking into consideration the statements, the material and judgments.

7. The assessee further assailed the said order of the Commissioner of Income-tax (Appeals) before the Tribunal. The matter was heard by the Bench of the Tribunal, however, while the learned Accountant Member (Shri B. R. Jain) in his order taking into consideration the peculiar situation, observed that there was no documentary evidence on record to show payment of any “on money” or to suggest that there is any unexplained investment in stock entry. He chose to allow the appeal and cancelled the penalty. However, learned Judicial Member (Shri V. Durga Rao) wrote a separate judgment observing that after carefully going through the order of the learned Accountant Member, he was unable to persuade to agree with the views and conclusion drawn by the learned Accountant Member that there being no material or documentary evidence on record to show payment of any “on money”, while he found that there was ample evidence on record in the shape of incriminating documents and clear working of the “on money” which was noticed by the survey team. He further noticed that the statements were recorded of two persons and also directors who themselves calculated the concealed income and filed revised return on March 27, 2008. He also came to the conclusion that there is nothing on record that the assessee filed revised return of income due to pressure from the Department, rather in fact the directors of the assessee company themselves have calculated the undisclosed income and thereafter filed revised return. Thus, learned Judicial Member disagreed with the findings of the learned Accountant Member and upheld the penalty. Since there was difference of opinion, the same was referred to a Third Member on the following question :

“Whether on the peculiar facts and circumstances of this case, there is any justification in sustenance of penalty imposed under section 271(1)(c) of the Act ?”

Learned Vice-President of the Tribunal (Shri G.D. Agrawal) who acting as a Third Member, heard the matter again and held as under :

“35. However, the facts of the assessee’s case are altogether different. In the case under consideration before me, as already noted, there was survey at the assessee’s premises. During the course of survey, 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 with the Income-tax Department. In view of the above, in my opinion, the above decision of hon’ble apex court would not be applicable to the facts of the assessee’s case. (Emphasis supplied)

36. After considering the arguments of both the sides and the facts of the case, I agree with the finding of the Assessing Officer in the penalty order that the assessee did not disclose the correct purchase consideration of the agricultural land. The purchase price of the land was recorded at a lesser value in the regular books of account. These facts were detected by the Revenue as a result of survey at the assessee’s premises. During the course of survey, the director of the company admitted these facts. Thus, it is a clear case where the assessee furnished incorrect particulars in the original return of income with regard to purchase price of agricultural land, value of closing stock as well as the business income. The revised return modifying the figure of purchase value of agricultural land, value of closing stock as well as business income was furnished only after the detection of these discrepancies during the course of survey. In view of the above, I have no hesitation to hold that on the facts and circumstances of the case, learned Judicial Member rightly proposed to sustain the penalty imposed under section 271(1)(c).” (Emphasis supplied)

Thus, even the learned Vice-President being the Third Member of the Tribunal, discarded the finding of the learned Accountant Member that there was no incriminating document or no documentary evidence on record to show payment of any “on money”. Thus, penalty was upheld.

8. Learned counsel for the appellant contended that statements of two persons were recorded, however, since they were employees of the company, they had no authority to give any statement. He also supported the findings of the learned Accountant Member that except statements recorded, there was no document/incriminating documents found. He further contended that merely on the basis of statements recorded in survey and no document or loose papers having been found, or evidence of payment of “on money” having been found the very inclusion was not proper. He contended that the offer of revising the return was voluntary, without delay and it was assured by the authorities during the course of statements that the income being offered is subject 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 11/161 Taxman 340 (SC) ;

CIT v. Anwar Ali [1970] 76 ITR 696 (SC) ;

CIT v. Suresh Chandra Mittal [2001] 251 ITR 9/119 Taxman 433 (SC) ;

CIT v. Suresh Chandra Mittal [2000] 241 ITR 124/[2002] 123 Taxman 1052 (MP) ;

CIT v. Punjab Tyres [1986] 162 ITR 517 (MP) ;

CIT v. Suraj Bhan [2007] 294 ITR 481/159 Taxman 26 (Punj. & Har.) ;

CIT v. S. Khader Khan Son [2013] 352 ITR 480/[2012] 210 Taxman 248/25 taxmann.com 413 (SC) ; and

Paul Mathews & Sons v. CIT [2003] 263 ITR 101/129 Taxman 416 (Ker).

9. We have heard the learned counsel for the assessee and have perused the orders passed by the learned Members of the Bench including the Third Member and the other orders. We have already narrated the seriatum of facts in the beginning of the order, and we need not repeat the same. Suffice it to say that the original return was filed disclosing an income of Rs. 1,87,697 on November 29, 2006. A survey as aforesaid, was conducted between February 26, 2008 and February 28, 2008, where statements of Nagesh Bhaskar and Ram Kishore Jat were recorded. It would be appropriate to quote the statements recorded on February 26, 2008 during the course of survey of Moolchand Jat, who had sold his land in village Nandlalpura, Teh. Phagi, wherein he admitted that 10 months ago his family members had sold land in village Nandlalpura, Tehsil Phagi. He had admitted of having received payments as follows :

Statement of Nagesh Bhaskar is also being reproduced hereunder :

Subsequently this statement of Sh. Nagesh Bhaskar was confronted with Sh. Ramkishore, seller of land, resident of Mehala. He confirmed the statement of Sh. Nagesh Bhaskar as follows :

Relevant portion of statement of Mahesh Kumar Gupta, who was looking after the accounts of the assessee, is reproduced hereunder :

“In question No.11 he categorically stated as follows :

Relevant portion of statement of Ramkishore Jat, the key operator of the business of the assessee, is reproduced hereunder :

Thereafter all the statements as aforesaid, as well as registered and un-registered sale deeds and loose papers found during the course of survey, were confronted with Sunil Bansal, director of the company, and it would also be relevant to observe his statement, which is reproduced hereunder :

On perusal of the statements of various persons including Sunil Bansal and confirmation by the other two directors, who were also present during the course of statements, it was categorically accepted and agreed by the three directors, which had also been placed on record as annexure “A”, 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 other two directors, during survey proceedings, but despite the same, the assessee chose not to file return immediately, however, it is only when a show-cause notice was again issued by the Assessing Officer on March 12, 2008 bringing it to the notice of the assessee about admission of surrender to the extent of Rs. 3,02,33,672 thereafter return was filed on March 27, 2008. In our view, the return so filed on March 27, 2008 by no stretch of imagination can be said to be a voluntary act, but after detection.

11. We would also like to refer to the observation of the learned Accountant Member (Shri B.R. Jain) of the Tribunal, where in para 13 he observes-“No documentary evidence in the shape of loose papers or any other agreements reflecting payment as “on money” is available on record of the assessing authority”, and another finding at page 15 of the impugned order “The assessing authority in the penalty proceedings made no field enquiry into the facts to find out as to whether the assessee really made any investment over and above what was disclosed originally in the books of account. The explanation thus tendered by the assessee has not been found to be false” (emphasis1 supplied). According to us, this findings by the learned Accountant Member is wholly perverse, based on no material and contrary to the material on record referred to hereinbefore and was available before all the authorities including the Tribunal. We have reproduced the statements of various persons/directors just to show the extent of loose papers and incriminating documents found and admitted by the appellants to counter the perverse finding of the learned Accountant Member of the Tribunal.

12. On the contrary, not only the Assessing Officer but the learned Commissioner of Income-tax (Appeals) as well as the learned Judicial Member and the learned Third Member have categorically found, as reproduced hereinbefore, that there was ample material, voluminous documents found at the time of survey which resulted into surrender by the appellant. There is concurrent finding of the two appellate authorities.

13. A bare perusal of the aforesaid submission of the assessee clearly makes out that in the penalty proceedings the assessee has not even attempted to establish its bona fides nor submitted any explanation worth considering, before the Assessing Officer during the penalty proceedings. 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 been retracted either during the assessment proceedings or during the penalty proceedings at any stage.

14. The Madras High Court in the case of M. S. Mohammed Marzook v. ITO [2006] 283 ITR 254 held that in a case where original return was filed disclosing an income and consequent to a search proceeding if a revised return has been filed, then the omission or wrong statement by the assessee in the original return was not due to bona fide or any inadvertence or mistake on his part, but the revised return was filed only after the search action. It further held that though it is the case of the assessee that with a view to purchase peace he offered the sums and non-taxable income, the Tribunal held that there is no material with the assessee to show that the mistake had crept in the original return accidentally without any intention warranting deletion of penalty. On the other hand, the Appellate Tribunal found that the reasons assigned by the Assessing Officer to hold that the assessee had concealed the income are genuine and accordingly, confirmed the penalty. The Madras High Court further held that it is settled law that once the authorities have arrived at a subjective satisfaction under the facts and circumstances of the case, it may not be proper for the court to enter upon the merits of the controversy at all, and unless it is demonstrated that the indication made by the Assessing Officer to initiate penalty proceedings is mala fide, perverse, based on no evidence, misreading of evidence or which a reasonable man could not form or that the person concerned was not given due opportunity resulting in prejudice, the said proceedings need no interference, and accordingly the court finding no question of law, much less a substantial question of law, the appeal was dismissed.

15. The Madras High Court in the case of CIT v. J.K. A. Subramania Chettiar [1977] 110 ITR 602, had an occasion to consider a case under section 271(1)(c) of the Act where a revised return was filed showing higher income, still higher income was assessed by the Assessing Officer, and in the said case the assessee had filed original return disclosing an income of Rs. 27,556. The assessee filed a second return of income for the assessment year 1963-64 disclosing a total income of Rs. 75,044 which included business income of Rs. 69,143. However, the assessment was ultimately 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/[1979] 1 Taxman 29, 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 593/38 taxmann.com 448 (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 deeds duly signed, had been impounded. These documents had been found in the course of survey proceedings under section 133A conducted on December 16, 2003, in the case of one M/s. Marketing Services (a sister concern of the assessee). The Assessing Officer then proceeded to seek information from the assessee and issued a show-cause notice dated October 26, 2006. By the show-cause notice, the Assessing Officer sought specific information regarding the documents pertaining to share applications found in the course of survey, particularly, blank transfer deeds signed by persons, who had applied for the shares. Reply to the show-cause notice was filed on November 22, 2006, in which the assessee made an offer to surrender a sum of Rs. 40.74 lakhs with a view to avoid litigation and buy peace and to make an amicable settlement of the dispute, with the following words used by the assessee :

“The offer of surrender is by way of voluntary disclosure of without admitting any concealment whatsoever or with any intention to conceal and subject to non-initiation of penalty proceedings and prosecution.”

The Assessing Officer verifying the details and calculations of the share application money added the said amount of Rs. 40,74,000 and brought to tax as “income from other sources” and assessed the total income at Rs. 57,56,700. The penalty proceedings were initiated for concealment of income and not furnishing true particulars of its income under section 271(1)(c) of the Act. The Assessing Officer imposed penalty under section 271(1)(c) at Rs. 14,61,547 which was upheld by the Commissioner of Income-tax (Appeals), however, was deleted by the Tribunal. The Delhi High Court accepted the plea of the Revenue that there was absolutely no explanation by the assessee for the concealed income of Rs. 40,74,000. The High Court took the view that in the absence of any explanation in respect of the surrendered income, the first part of clause (A) of Explanation 1 is attracted, and reversed the finding of the Tribunal and allowed the appeal. On a further appeal the apex court, taking into consideration, the words “voluntary disclosure”, “buy peace”, “avoid litigation”, “amicable settlement”, etc., was of the opinion that the Explanation to section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer, between reported and assessed 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 assessee 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 that the offer of surrender was made in view of detection made by the Assessing Officer in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. The Assessing Officer during the course of assessment proceedings has noticed that 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 deeds duly signed, have been impounded in the course of survey proceedings under section 133A conducted on December 16, 2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under section 271 read with section 274 of the Income-tax Act, 1961.

The Assessing Officer has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the Assessing Officer is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of section 271(1)(c) has also been elaborately discussed by this court in Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 (SC) ; [2008] 13 SCC 369 and CIT v. Atul Mohan Bindal [2009] 317 ITR 1 (SC) ; [2009] 9 SCC 589.” (Emphasis supplied)

18. Taking into consideration the above facts vis-a-vis the instant case, in our view the facts are exactly identical where voluminous unrecorded material was found during the course of survey which were impounded by the Assessing Officer and consequent thereto a 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 (supra) tax matters of the said assessee were looked after for a number of years by the law agency division of the Syndicate Bank, Manipal, which was authorised to file the returns of income before the tax authorities representing the assessee. On a return having been filed, the Revenue being dissatisfied called for better particulars of investments made by the said assessee whereupon a revised return was filed on January 12, 1990 furnishing all the requisite particulars to the Department. A second revised return was filed on which assessment was made by the Assessing Officer. The said revised return was accepted by the Assessing Officer and it was contended, in the penalty proceedings that the assessee had acted bona fide as the tax affairs were being looked after by the professional group working with the Syndicate Bank. However, the said contention was not accepted and penalty was imposed. The apex court observed that in the penalty proceedings the authorities must consider the matter afresh as the question has to be considered from a different angle. The said judgment is inapplicable as the Assessing Officer in the penalty proceedings has considered the material again and has come to a definite conclusion about concealment of income.

22. In Anwar Ali (supra), the issue was on different proposition. It held that though addition made in the quantum proceedings is good evidence, but before penalty can be imposed the entirety of the circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. The judgment of the apex court is inapplicable as the facts of the instant case the assessee himself has come forward and after noticing various statements and the voluminous documents found from the business premises of the assessee itself about offering of an income which was not originally shown or recorded in the books of account.

23. The case of Suresh Chandra Mittal (supra), relied upon by the learned counsel for the appellant, is yet again on a different proposition as the apex court found that the Department has not discharged its burden of proving concealment and has simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith. However, we have already noticed the judgment in the case of Mak Data P. Ltd. (supra), which is applicable to the facts of the instant case, where as a result of the survey proceedings, the assessee came forward and surrendered only because of the voluminous documents and statements of its employees and person concerned were recorded.

24. In the case of S. Khader Khan Son (supra), the apex court observed that section 133A does not empower any IT authority to examine any person on oath, hence any such statement has no evidentiary value and any admission made during such statement cannot, by itself, be made the basis for addition. This case is also inapplicable to the facts of the instant case because the assessee himself has accepted, surrendered and paid due taxes and has not denied the statements recorded under section 133A of the various persons. Rather the Directors of the assessee agreed on the statements in unison, which has been quoted extensively and even the surrender made by the assessee ultimately attained finality.

25. The other judgments are inapplicable on the facts of the instant case, therefore, having gone into the issue at length, we are of the view that the finding of fact recorded by the learned Judicial Member and learned Vice-President, as the Third Member of the Tribunal, is correct and the penalty was rightly imposed. No question of law, much less substantial question of law arise out of the order of the Tribunal as it is based on appreciation of evidence and is based on pure finding of fact.

26. Consequently, for the reasons aforesaid we do not find any illegality or perversity in the order impugned so as to call for any interference by this court. The appeal being devoid of merits, is accordingly dismissed.

[Citation : 388 ITR 395]

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