M/S GRASS FIELD FARMS and RESORTS PVT LTD vs. DY COMMISSIONER OF I T CIRCLE-2 JAIPUR

PDF · subscribers
ITA/60/2016HC RajasthanRJHC02087300201601 June 201633 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the penalty imposed under Section 271(1)(c) was rightly sustained. The Court found that voluminous unrecorded material was discovered during the survey, including purchase deeds for agricultural land and statements from employees and Directors. These documents established that the assessee was recording land purchases at a much lower value than the actual price, and cash payments were made for these purchases, which were not recorded in the books of accounts. The Directors themselves prepared a detailed chart of unrecorded investment and filed a revised return. The Court distinguished the assessee's case from various precedents cited by the appellant, including T. Ashok Pai, CIT v. Anwar Ali, CIT v. Suresh Chandra Mittal, and CIT v. S. Khader Khan Son, by emphasizing that in this case, the assessee's surrender was a direct result of the incriminating evidence found during the survey and the admissions made by its Directors. The Court concluded that it was a proved case of concealment of income and that the penalty was rightly imposed by the AO and upheld by the appellate authorities. No substantial question of law arose from the Tribunal's order, which was based on appreciation of evidence and a finding of fact. The appeal was dismissed.

What were the facts?

The assessee, M/s Grass Field Farms & Resorts Private Limited, engaged in developing farmhouses, filed its return for assessment year 2006-07. A survey operation conducted from February 26-28, 2008, at the company's premises revealed incriminating documents indicating undisclosed investments in agricultural lands and properties, with purchase considerations recorded at lower values than actual. Statements of employees and Directors, including Sunil Bansal, were recorded, leading to a surrender of undisclosed investment. The assessee filed a revised return on March 27, 2008, offering an additional income of Rs. 3,02,33,672/-. The Assessing Officer (AO) added this amount to the total income. The CIT(A) upheld the addition but directed it to be taxed as 'business income' instead of 'unexplained investment' under Section 69B. Subsequently, the AO initiated penalty proceedings under Section 271(1)(c) for concealment of income, imposing a penalty of Rs. 1,01,76,653/-. The CIT(A) upheld the penalty. The Tribunal, however, had a difference of opinion between its members, leading to a reference to a Third Member.

What were the issues?

1. Whether, on the peculiar facts and circumstances of this case, there is any justification for the sustenance of penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961? Assessee's Contention (as inferred from the Tribunal's discussion and the Accountant Member's order): The assessee argued that there was no documentary evidence of "on money" payment or unexplained investment in stock entries. The revised return was filed in good faith, and after the CIT(A)'s order, there was no concealed income. The penalty proceedings should be dropped. Revenue's Contention (as inferred from the Tribunal's discussion and the Judicial Member's order): The revenue contended that incriminating documents and statements of employees and Directors clearly indicated "on money" payments and undisclosed investment. The revised return was filed as a consequence of the survey and the discovery of evidence, not voluntarily. The penalty was rightly imposed and upheld by appellate authorities.

Which sections of the Income-tax Act were involved?

Section 260A,Section 133A,Section 133A(3)(ia),Section 69B,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cited by 9 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No.60/2016 M/s Grass Field Farms & Resorts Private Limited v. Dy. CIT Circle-2, Jaipur Date of order : 1st June 2016 Reportable Hon'ble Mr. Justice M.N. Bhandari Hon'ble Mr. Justice J.K. Ranka Mr. Gunjan Pathak, counsel for appellant By the Court (per Ranka, J.)

1.

The instant appeal at the instance of assessee under Section 260A of the Income Tax Act, 1961, is directed against the order dated 27.10.2015 passed by 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 12.7.2005 and is, inter alia, engaged in developing Farm Houses at National Highway no.8 near Village Mehala Distt. Jaipur. It filed return declaring an income of Rs.1,87,697/- on 29.11.2006. A survey operation was directed against the appellant on 26.2.2008 which continued upto 28.2.2008 at the business premises of the appellant

2 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 Distt. 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. 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

3 during the course of regular assessment proceedings on 12.3.2008, 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 27.3.2008 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 crore, 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 CIT(A), while disposing of the appeal did not interfere in 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

4 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 inacurate particulars in respect of the surrendered income.

5.

After the appellate order having become final, the AO 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.3023672.00 as unexplained investment u/s 69B by then learned ITO have been rejected by the Hon'ble CIT(A) Jaipur in his order dated 16.10.2008. ii) Then 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 CIT(A) Jaipur.

5 After order of the learned CIT(A), Jaipur thee is no concealed income and no penalty can be imposed. You are therefore requested to kindly drop the penalty proceedings.” However, the AO vide order dated 26.3.2010, 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 AO 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 CIT(A), 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 CIT(A) 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 6 appeal and cancelled the penalty. However, learned Judl. 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 27.3.2008. 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

7 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 accounts. He, with the help of those documents, prepared a detailed chart and worked out the un-recorded 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 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 accounts. 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

8 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 above, I have no hesitation to hold that on the facts and circumstancdes of the case, learned Judicial Member rightly proposed to sustain the penalty imposed u/s 271(1)(c)." (emphasis supplied) Thus, even the learned Vice-President being 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 9 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 AO 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 un-explained 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 [2011] 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)

10 CIT v. S. Khader Khan Son (2013) 352 ITR 480 (SC) Paul Mathews & Sons v. CIT (2003) 181 CTR 207 (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 29.11.2006. A survey as aforesaid, was conducted between 26.2.2008 to 28.2.2008, where statements of Nagesh Bhaskar and Ram Kishore Jat were recorded. It would be appropriate to quote the statements recorded on 26.2.2008 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, Teh. Phagi. He had admitted of having received payments as follows :- उतर : य दन जम न श रम क मर जट ननवस शयससह पर तह. सगनर (जयससह पर स 3Km. दर) क मर त बच थ । भगतन क& रस' नगद एव च)क दन ह* श रम क मर क हथ पप क& थ । भगतन इस पकर पप ककय थ। ददनक रस' नकद/च)क मर त 31.03.2007 21,000/- नकद रमक मर 4.4.2007 1,00,000/- नकद रमक मर 5.4.2007 6,00,000/- नकद रमक मर 14.4.2007 1,00,000/- नकद रमक मर 21.4.2007 1,00,000/- नकद रमक मर

11 23.04.2007 18,67,500/- च)क न. 040158 In the name of Smt. Bholi Devi रमक मर 23.4.2007 72,300/- नकद रमक मर 23.4.2007 3,13,950/- च)क न. 040160 In the name of Sh. Suraj Karan Jat रमक मर" Statement of Nagesh Bhaskar is also being reproduced hereunder :- उतर : मर भई श करण ससह न 11 ब घ 10 बबसव क5 ष7 भसम Sale deed ददलई 28.7.05 क दर Grass Field Farms & Resorts (P) Ltd. क बच थ यह जम न 450,000/- रपय म षवकय क& थ इसक& Registry 200000 रपय षवकय पनतरल ददखकर करवई थ । षवकय पनतरल क& पर* रस' 450000/- मर समक भत श करण ससह न पप क& थ । 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 :- पश : म@ आपक श करण ससह S/o श चतरम दर M/s Grass Field Farms & Resorts (P) Ltd. क ददनक 28.7.05 क षवकय क& गई क5 ष7 भसम स समबनDEत registry ददख रह ह। क5 पय इस दखकर बतय कक इस सFद क बर म आपक कय जनकर* ह)। उतर: म@न उपरक षवकय पत दख सलय ह) यह जम न म@न और श कमल' ज)न न बबकवई थ यह जम न 11 ब घ 10 बबसव ह)। यह जम न Rs. 450,000/- म Grass field Farms & Resorts क खर*द करवई थ । म@न श नग' भसकर दर ददय गय बयन भ पढ सलय ह@ और म@ उनस पण त: सहमत ह। जम न क सFद Rs. 450,000/- क हआ थ तथ Registry 200000 क& करई थ ज कक M/s Grass Field Farms & Resorts क& सषवEनसर करवई थ ।” 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 :

12 पश : 11 म@ आपक एक power attorney ज सगर क वर पत श हनमन ससह हड ननवस गम बढ श म तह. ललसट दर आपक नम पर करवई गई ह) ददख रह ह यह POA। द ब घ जम न क& ह) यह जम न गव गषवDदपर उर बसड तह.रग म ह) क5 पय बतय कक इस POA। क अनसर इस जम न खर*द ररखत ह गई ह) कय? उतर : जम न क पर प)स चकन क बद ह* power of attorney क& जत ह) जयद stamp duty स बचन क चककर म POA। करवई गई ह)। इस जम न क पर प)स चक ददय गय ह)। यह power of attorney मर नम स ह) इससलए यह मन जव कक यह जम न मर नम स ह* खर*द* गई ह)। यह रपय कमपन न चकय ह) ज मर नम स ददय गय ह) कमपन जयदतर कम चररय क नम स जम न खर*दत ह) और उसक भगतन नकद म करत ह)। पश: 12 म@ आपक पमदव पत श अख रम जनत जट ननवस गम बकन त. रग क& power of attorney ज आपक नम स क& गई ह) क5 पय इस दखकर बतय कक यह जम न आपन ककतन रपय म खर*द* और और इसक भगतन क) स ककय? उतर : यह जम न पमदव पत श अख रम गम बकन त. रग स power of attorney पर खर*द* गई ह) जम न खर*दन क सलए पमदव क पर भगतन नकद म ककय गय । यह भगतन कमपन क डयरकटर श सन ल बसल ज न ककय ह) power of attorney मर नम स त)यर करवई ह) जम न खर*दन क भगतन मकS ट Value पर ककय गय ह)।" Relevant portion of statement of Ramkishore Jat, the key operator of the business of the assessee, is reproduced hereunder :- “उतर 2: महल म कमपन क ज ऑकरस ह) उसक& जम न 2 व7 पव मर एव श सन ल बसल क नम स खर*द* थ ज 55X37 र&ट ह)। इस जम न क ननम ण कय श सन ल बसल (Director) ह) उDह न करवय ह)। इनक ननम ण म ककतन रपय क ननयजन ककय गय ह) नजसक& जनकर* उDह* क ह)। कमपन क ऑकरस म म@ ब)ठत ह, और कमपन दर खर*द एव बबक& क& जन वल* जम न क कगजत ज लकल पटवर* स सबधEत हत ह@ वह कय म@ दखत ह। मर अलव महल कमपन क ऑकरस म श गपल 'म (चFक&दर) रहत ह@। उतर 3: कमपन क क छ जम न मर नम पर खर*द* थ । इस जम न क खर*दन म ज रपय लग थ वह श सन ल बसल न ह* ददय थ। अब इस बत क& जनकर* श सन ल बसल ज क ह* ह) कक यह रपय उDह न कमपन क अकउणYस स। बद म यह पर* ज मल उDह न कमपन क नम पर जतदसमत करव द*। म@ क वल कगज पर हसतकर करत थ, जम न खर*दन म पर रपय श सन ल बसल एव कमपन क ह* लगत थ।....... उतर 7: म@ गस र&लड रम स एव ररसट प.सल. म मर* जनकर* क अनसर इस

13 कमपन क पस लगभग 1800 ब घ जम न सडक क दन तरर ह)। इसम स लगभग 200 ब घ जम न व7 2008 म खर*द* गई ह)। व7 2007 म जनवर* स ददसमबर तक लगभग 500 ब घ जम न खर*द* ह)। तथ '7 जम न इसस पहल क& ह) व7 2007 एव व7 2008 म खर*द* गई जम न म स व7 2007 म खर*द* गई जम न लगभग 14 लख रपय पनत ब घ तथ व7 2008 म लगभग 15 लख रपय पनत ब घ क& दर स खर*द* गई थ । इस कमपन क सलए ननमन दलल जम न ददलन क कम करत ह@:- 1. श कमल' ज)न S/o श क) ल' चDद ज)न, ननवस -मह\ल, क क जनरल सटर म० न० 9829024847 2. श रम सहय चFEर* S/o श गगरम, ननवस -बकन 3. श रमकक'र (सवय) उतर:- कमपन ज जम न खर*दत ह)। उसक& DLC रट हत थ ककDत षवद' कमपन इनक सथ आन स वत मन म रनजस^* क& दर लगभग 10 लख रपय पनत ब घ ह)। '7 रस' क भगतन रकड म ककय जत ह)। पश: 9 म@ आपक क छ रनजस^*य क& क_प ददख रह ह नजन पर आपक गवह क रप म हसतकर ह@। इDह दखकर बतय कक जम न क सFद ककस रट स हआ व रनजसट` ककस रट स हई-? उतर : म@न आप दर ददखय रनजनस^य दख ल* ह@ इDह म@ ननमन पकर स सपष करत ह। 1. श न रज रठड ननवस 59, सरदर पटल मग दर ददनक 8.8.05 क बच गई जम न म बतच त मर मधयम स हई थ नजसम श षवमल ससघव न 70,000/- पनत ब घ क& दर स क&मत लगई थ परDत सFद नह* ब)ठ थ कय कक षवक त पट` इस रस' पर जम न बचन पर त)यर नह* थ । इसक पशत इस जम न क सFद लगभग 1 लख रपय पनत ब घ क दहसब स दन पट`य न तय ककय तथ रनजस^* करत समय म@ तथ कमल' ज)न दन उपनसथत थ। इस जम न क& रनजस^* 4 लख 50 हजर रपय म हई ज 30000/- पनत ब घ क दहसब स हई। 2. श क .एस.'ह एव स . एस. 'ह, HUF क& जम न क ल 58 ब घ जम न बच गई ह)। नजसक& रनजस^* 8.8.05 क करवई गई थ नजसक& वसतषवक दर भ न रज रठड क बरबर ह* हई थ । 3. श करण ससह पत श च)तरम स 11 ब घ 10 बबसव 28.7.05 क खर*द* गई थ । नजसम सFद मर मधयम स हआ थ पनतरल क भगतन भ मर मधयम स हआ थ यह सFद 40000/-पनत ब घ क& दर स हआ थ। तथ रनजस^* 2 लख क& क ल करई गई थ । परDत कय पनतरल क भगतन 460000/-रपय ककय गय थ ज रकड म ककय गय थ। 4. श भवर ससह S/o श गपल ससह स 19.9.05 क खर*द* गई क ल 21 ब घ 14 बबसव ह) ज कक ददनक 19.9.05 क कमपन क नम बचन क& गई बतई ह)। श भवर ससह कमपन म श सन ल बसल क यह पर नFकर* करत ह@। यह जम न श बसल न भवर ससह क नम खर*द* थ और भगतन भ सन ल बसल न ककय थ। यह जम न 26000/-र. पनत ब घ म म@न ददलई थ और भगतन श सन ल बसल न ददय थ। इस समबDE म म@ यह बतन चहत ह कक श भवर ससह क ब@क खत म प)स श सन ल बसल न जम करय थ। और इDह* प)स स जम न क भगतन हआ थ। पश 11: म@ आपक Annex.A.1 क पज न.1 ददख रह ह ज कक आपक कय लय स पप हआ ह) इस दखकर बतय कक यह कय ह)? उतर: म@न यह पपर दख सलय ह)। इस पपर क डडटलस क म@ जनत ह। श

14 रक ' क मर ज)न स श सन ल बसल क 15 ब घ क छ बबसव जम न, गव नसरFद म 5 लख 50 हजर रपय पनत ब घ क& दर स लगभग 6 मह पव म ददलवई थ । इसम श कमल' ज)न भ दलल थ तथ श रम ननवस चFEर*, ननवस -गडFत भ दलल थ। इस सFद म हम त न दलल थ। सFद क भगतन गस करलड, शयम नगर म ककय गय थ और इसक& रनजस^* भ करव द* गई ह)। इस सFद क& रनजस^* मर* जनकर* क अनसर 2 लख रपय ब घ क& दर स हई थ । इस सFद म हम त न दलल क क ल समलकर 2: दलल* समल* थ । पश 17: म@ आपक Annex.A.1 क पज न.13 ददख रह ह। इस दखकर पर* जनकर* बतय। उतर: म@न उपरक पज 13 दख सलय ह)। इसम श पभ र@गर स गस करलड रम स एणड ररसट स खसर न. 427/4 स 14 ब घ जम न 15 लख 30 हजर रपय पनत ब घ क& दर स लगभग 6 मह पव ददलवई थ । इस जम न क क ल भगतन 2 करड 14 लख 20 हजर रपय बनत ह)। नजसम स 45,00,000/-लख रपय एग मDट क पट) सई वसत च)क स ददय थ। इस जम न म स 2/3 भग व ब घ 6.5 बबसव क& रनजस^* कर ल* गई ह)। तथ '7 जम न क& रनजस^* हन बक& ह)। इसक& रनजस^* रट य उसस क छ अधEक पड गई हग । इस कगज म वरण त च)क व रकड रस' क भगतन वसतषवक ह)। ज सन ल बसल न ककय थ। बद म बतय कक यह एग मDट क पट ज रस' व 45 लख रपय रकड ददय गय थ परDत पहल म@न च)क स बतई थ । इस जम न क& रनजस^* श रजकक'र गठवल क नम करई ह)। ज सन ल बसल क षवशस पत वयडक ह)। पश 21: म@ आपक Annex.A-II क पज स.13 ददख रह ह। इस दखकर बतय कक इसम ककन सFद क डडटल सलख ह)? उतर: म@न उपरक कगज दख सलए ह@। इस कगज म सबस ऊपर बसल सलख हआ ह)। इसस न च 438 बबसव, उसक न च 20 ब घ सलख हआ ह)। इस कगज क दय ओर द करड 11 लख रपय बसल 11.04.05 सलख हआ ह) इसक ननच 1 करड 89 लख रपय नसनFद क बसल स आय 11.4.05 सलख हआ ह) इसक न च 6,50,000/-रपय गडFत म घस रम क ददय इसक न च 5 लख रपय, 15 ब घ एडवस इसक न च 2 लख रपय ब_सड एडवस तथ इसक न च 28 लख रपय नDद लल पर खचj सदहत सलख हआ ह)। इस कगज क षपछ क& सईड म ननमन पषवषषय सलख हई ह@:- 1,25,00,000 नसनFद सदहत 7.1.05 5,00,000 10.1.05 10,00,000 22.1.05 5,00,000 7.2.05 5,00,000 18.2.05 5,00,000 19.2.05 16,00,000 25.2.05 5,00,000 14.3.05 5,00,000 16.3.05 5,00,000 23.3.05 3,00,000 8.4.05 10,00,000 11.4.05 उपरक सभ भगतन गस करलड रम स एणड ररसट तथ श सन ल बसल स समबनDEत ह)। नसनFद क& जम न तथ अDय जम न क& रनजस^*य ककतन रट

15 पर हई यह मर* जनकर* म नह* ह)। पश 25: म@ आपक एक सल ड ड ज गजनDद पत बछ लल एव श मत न ल बसल Eम पत श सन ल बसल क मधय ददनक 24.8.04 क हआ ह) नजसक तहत 10 ब घ 10 बबसव पकक& जम न 1 लख 70 हजर रपय म कय ककय जन बतय ह)। इस सल ड ड पर एक पचk धचपक& ह)। नजस पचk म 25500/-रपय सटमप डयट* एव अDय खचj तथ दसर* ओर 396000/-रपय क दहसब सलख गय ह)। इस कगज पर ह* न च 25500/-खचj एव 367500/-ल)णड क ल 393000/-र. म इस सपष कर? उतर: म@न आप दर ददखई गई षवकय पचk दख ल* ह)। यह स)ल ड ड म@न करवई ह)। यह जम न 367500/-र. म खर*द* गई ह) व इसक& रनजस^* 1,70,000/-रपय म करई गई ह)। रनजस^* कम क& कय करई ह) यह मर* जनकर* म नह* ह)।" 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 :- "पश : 13 श रमकक'र जट पत श रमलल जट ननवस -महल क कय आप जनत ह@। इसस आपक कय वयपररक सबE ह)? उतर: उपरक पश क उतर म ज)स म@न बतय थ कक रमकक'र जट क सथ समलकर NH-8 क महल म कमपन क सईट ऑकरस क सलए जम न खर*द* थ और उस पर ननम ण कय कमपन क खत म स करवय थ। श रमकक'र जट कमपन क Site Office म (महल) म बठत ह@। श रम कक'र जट क& मदद स कमपन स व7 2005-06 म जम न खर*द* थ । जम न खर*दन क दFरन ज रनजस^*य हई उन पर भ श रम कक'र जट न गवह क रप म हसतकर ककय थ। श रमकक'र जट न कमपन क& जम न खर*दन म Broker क रप म कय ककय ह)। पश : 14 ददनक 26.2.2008 क जर* सवS क& कय वह* क दFरन श रमकक'र जट क बयन 'पथ पव क दज ककय गय ह@। य बयन म आपक ददख रह ह, उDह न अपन बयन क पश स.3 क उतर म बतय कक कमपन न क छ जम न श रमकक'र जट क नम पर खर*द* थ । इस जम न क खर*दन म ज रपय लग थ न श सन ल बसल न ह* ददय थ। इस बत क& जनकर* भ उसन अपन बयन म द* ह)। कक जम न कमपन क नम पर बद म बबन प)स ददय।(कमपन क नम) पर Transfer कर द* गई। इस षव7य म सपष करण दव? उतर: कमपन क& 56 एकड जम न (खत ) खर*दन क& स सलग ह) इससलए जम न दसर लग क नम पर भ खर*दत ह@। कमपन न जम न रम कक'र जट क नम स खर*द* थ । म@ रम कक'र जट दर ददय गय बयन स सहमत ह। श

16 रमकक'र जट क नम स

33

ब घ

11

बबसव जम न खर*द* थ । इस जम न क

खर*दन म रपय गस र&लड कलब प

. सल . स रकड ननकल कर म@न ददय थ।

नजनक इDmज कलब क& लख पसतक म नह* ह)। इस रस' क कलब क डयरकटर क& ह)ससयत स म@ आयकर क सलए समषप त करत ह। इसम क ल षवननयग

7,00,675/-

रपय ककय गय थ । इसक अलव ह* रमकक'र जट क

नम स दद

. 02.08.2005

एव

27.07.

2005

क कम'

: 43,910

एव

38,840

रपय क&

जम न म@ गस र&लड रम स एणड ररसट प

. सल . कमपन स नकद म भगतन

ककय गय थ। नजसक लख पसतक म कई इDmज नह* ह)। नजस आयकर क सलए समषप त करत ह। पश :20 म@ आपक सवS क& कय वह* क दFरन कमपन क सईड ऑकरस स समल Anex.A-I क पज न.13 ददख रह ह। इस Annex म 427/4=14 ब घ सलख ह) इस दखकर बतय कक इसम दज (इDmज) कय ह)? उतर: यह

14

ब घ जम न नसनFत गnव म खर*द* ह)। यह जम न जन

, 2007

म खर*द* थ और इसम कमपन दर

Agreement

क पट

45,00,000/-

रपय नकद

ददय गय थ। यह नकद रस'

M/s Grass field Farms & Resorts (P) Ltd.

Jaipur

क& लख पनसतक क बहर स ददय ह)। यह

45,00,000/-

रपय क& रस' म@

कमपन क& अघष7त आय मनत हए

, आयकर क समषप त करत ह

। पश : 21 पश स. 16 क जवब म आपन बतय ह) कक श करण ससह स कय क& गई जम न बबत श नग' भसकर क बयन एव इस सFद क दलल श रमकक'र जट क बयन क आEर पर 2,50,000/-रपय क कय पनतरल अघष7त रप स भगतन ककय गय थ, परDत आपन जवब म बतय ह) कक आईडडय नह* ह)। वपस सचकर एव कमपन क अDय ननद'क स षवचर कर सह* नसथनत क& जनकर* द? उतर : म@न श रम कक'र जट तथ श नग' भसकर दन क बयन पढ सलय ह@। इस सFद म रमकक'र जट दलल थ। जम न क सFद

45,00,000/-

रपय

एव

Sales Consideration

कर भगतन पण रपण रकड ककय गय थ।

रनजस^* क&

Value, Stamp duty

बचन क करण

DLC Rate

पर करय गय

थ। पश :22 श रमकक'र जट न अपन बयन म पश स.9 क उतर म बतय ह) कक श न रज रठड, श क एस 'ह, स एस 'ह, श करण ससह, श भवर ससह एव श चDm पक' गFतम स कय क& गई जम न क सFद म वसतषवक कय पनतरल तथ Sale deed म द' य वसतषवक पनतरल म अDतर ह)। आप बयन पढकर इस बबत अपन सपष करण द। उतर: म@न श रमकक'र जट क बयन क उतर पढ सलय ह)। म@ श रमकक'र क कथन स सहमत ह। अचल समपषत क कय म

Sale deed

स अधEक षवकय

पनतरल कई बर ददय जत ह)

, एव श रमकक'र न बयन म ज

instruction

बतई ह)

, व इस पकर क& ह@। इन सFद म ननमन रस'

Sale deed

म वरण त रस'

क अलव भगतन क& गई ह):- क.स.1 श न रज 15X85,000 - 4,50,000 = 8,25,000/- क.स.2 श क .एस.'ह 58X70,000 - 14,50,000 = 26,10,000/- श स एस 'ह

17 क.स. 3 श करणससह -पव म - - - - बतय ज चक ह)। क .स.4 श भवर ससह - भगतन क& गई रस' लख पसतक स सतयषपत करव द* जवग । क. स. 4 श चDm पक' गFतम - लख पसतक स सतयषपत करव द* जयग । इस पकर उपरक जम न क कय करवन म र

.34,35,000/-

क भगतन रकड म

ककय गय थ

, ज लख पसतक म दज नह* ह) तथ यह कमपन क& सबधEत व7

क& अघष7त आय स अनज त ह नजस पर दय आयकर क भगतन ननE रण व7 2006-07

म हम कर दग

। पश : 23 श रमकक'र जट न अपन बयन क पश स.11 क उतर म बतय ह) कक Annex.A.1 क पज न.1 पर भ रक ' क मर ज)न स 15 ब घ जम न नसरFद म 5,50,000/-रपय पनत ब घ क& दर स ददलवई थ इस बबत अपन सपष करण द? उतर: म@न Annex.A.1 क प5ष स.1 दख सलय ह) तथ इसस सलय गय तथय सह* ह@ एव म@. नकज कलनईजस स श रक ' ज)न क मधयम स 14 ब घ 19 बबसव जम न खसर स.427/6 गम-नसनत म खर*द* गई थ । यह जम न 5,50,000/-र. पनत ब घ क& दर कय क& गई थ । रम कक'र जट न जम न छ: मह पव कय करन बतय ह) ज सह* नह* ह)। जम न पव म कय कर द* गई थ । इस जम न क पट

82,50,000/-

रपय क लगभग भगतन ककय गय थ एव रनजस^* म

22,00,000/-

र 0 द' य गय थ

, नजनक कमपन क& लख पसतक म कई इDmज

नह* ह) एव कमपन क& आय स अनज त ककय गय ह)। य

60,50,000/-

म ननE रण

व7

2006-07

म कमपन क& अघष7त आय मनत हए

, आयकर क समषप त करत

ह। इस सFद क& जनकर* कमपन क त न ननद'क क ह)। पश : 25 म) . गस र&लड रम स एणड ररसट प

. सल . क रनजसटड ऑकरस

K-107,

कक'न नगर

, शयम नगर

, जयपर

B-32

रज भवन रड

, ससषवल लईDस

, ग_व महल

नसथत सइट ऑकरस क पररसर पर सवS क& कय वह* क दFरन बहत सर दसतवज समल ह@। नजनम कमपन क सलए कमपन क ननद'क दर भसम क कय सबधEत दसतवज समल ह@। नजनम वरण त कय पनतरल सबधEत षवकय पत म वरण त कय पनतरल स बहत अधEक ह)। इस बबत पय गय दसतवज आपक ददखय ज रह ह@ तथ क छ पर पव पश म आपस जनकर* ल ल* ह)। इस बबत आप बतय कक कमपन दर इसक आरमभ स लगकर आज तक नजतन भ क5 ष7 भसम अथव अDय अचल समपषत कय क& गई थ उसम ककतन कय पनतरल sale deed म द' य गय ह) और वसतव म ककतन कय पनत रल अद ककय गय थ। यह जनकर* आप त न ननद'क सवय तथ अपन कम चररय क& मदद स सभ

Sale deed

एव अDय दसतवज क आकलन कर प' कर

? उतर : कमपन क त न ननद'क न आप दर बतय गय

Loose Papers

दख

सलय तथ पव पश क उतर म वरण त

Loose Papers

भ दख सलय ह@ कमपन

क परमभ षव

. व7

2005-06

म हआ थ एव कमपन क

incorporation

स आज

तक कमपन न नजतन भ अचल समपषतय कय क& गई ह@ उनक&

Sale deeds

हमन दख ल* ह@ तथ नजनक&

Sale deeds

उपलबE नह* ह@ उनस समबनDEत आय

ररक_ड

Consider

करन क बद हमन त न ननद'क स सलगन

-' ए ' क अनसर

18 अघष7त कय पनतरल नजसक भगतन ककय गय ह)

, वह

Summarise

ककय ह) एव

इसक अलव मर बयन म पव पश म षवसभDन सथन पर कमपन स सबधEत अघष7त ननव' तथ आय क बर म बतय ह) वह भ सलगन चट म समदहत कर सलय गय ह)। एव सलगनक

'A'

क अनसर षवसभDन व7j म म)

. गस र&लड

रम स एव ररसट स प

. सल . क& अघष7त आय ननमन पकर स बनत ह)

:- क.स. ननE रण व7 षवकय पत म कमपन दर अपककत कय द' य पनतरल द' य अधगम पनतरल य

(Advance) अDय पकर स आय 1. 2006-07 4,49,05,871 1,27,53,220 3,02,33,672 2. 2007-08 6,08,70,920 3,20,15,047 5,57,72,494 3. 2008-09 50,28,50,055 65,59,000 5,68,10,943 क ल यग 61,56,26,846 5,13,27,267 14,28,17,110 उपरक वरण त रस'य क& षवसत5त जनकर* सलगनक 'ए' म द* गई ह)। ननE रण व7

2006-07

स

2008-09

तक सलगनक क अनसर रपय

14,28,17,110/-(

अकन

चFदह करड अठईस लख सतर हजर एक सF दस रपय

) क& अघष7त आय क&

गणन म)

. गस र&लड रम स एणड ररसट स प

. सल . म हम त न ननद'क म सभ

उपलबE ररक_ड क धयन म रखत हए क& ह)। चकक गणन षवसत5त ह) इससलए पतयक पषवषष क सबE म सलगन चट म

Summited

कर ददय गय ह)। इस चट

म सलख गई पतयक

entry

स हम त न ननद'क तथ कमपन सयक रप स एव

प5थक प5थक रपस नजममदर ह)। चट म

Purchases Value

क अथ रनजस^* क

मलय स ह) तथ

Amount already recorded in books

क भ हम सपष करन चहत

ह@ कक कमपन न

Stamp duty

क& बचत करन क सलए नजस वयनकत  स जम न

खर*द* गई उस क छ रस' जम न क कय पनतरल क बदल रनजस^* मलय स जयद क& गई थ

, नजस

Books

म Advance

ददख ददय गय थ। उस अब समप

ककय ज रह ह)। इस पषवषष क

Consider

करन क पशत भ ज अघष7त कय

पनतरल क भगतन ककय गय ह) वह

Chart

क Balance Column

म ददखय गय

ह)। चट क

Balance Column

म ददखई गई रस' सभ तथय क मदनजर रखत

हए अघष7त आय ह)। नजसम अDय कई छ ट नह* ल* जयग एव इस रस' पर दय आयकर क भगतन कमपन अपन षवसभDन व7j क& आय म ददख कर करग । अधEक' रनजनस^य श मह' क मर गप न कमपन क पनतननधE क तFर पर करवई ह)। पश : 26 क5 पय बतय कक आपक सलगनक 'ए' म वरण त अघष7त रस' नजस पकर बतई ह)। इस सबE म षवसत5त जनकर* द। उतर: हम त न ननद'क न म)

. गस र&लड रम स एव ररसट प

. सल . दर परमभ

स आज तक कय क& गई

, सभ जम न स सबधEत दसतवज दख सलय ह@। नजन

क&

Sale deed readily

उपलबE नह* ह)। उनक अDय ररक_ड दख सलय ह)। कमपन

क

Site Office

महल म पय गय दसतवज दख सलय ह@। श रम कक'र जट क

बयन दख सलय ह@ एव बयन म वरण त पव पश म द* गई जनकर* भ दख ल* ह)। इन सभ तथय पर पण रप स षवचर षवम' करन क बद कमपन क त न ननद'क न सलगन चट बनय ह) एव अपन हसतकर ककय ह@। श सन ल बसल बयन हमर* उपनसथनत म दज ह रह ह@ एव हम इसस सहमत ह@। कमपन क सलए श मह' गप न नजन सFद म कमपन क पनतननधE क बतFर हसतकर ककय ह@ एव षवकय पनतरल क भगतन ककय ह)। उDह न न भ तथय सबधEत सतयपन कर ददय ह)। सलगनक नजसम सभ सFद क& जनकर*

, उसम वरण त

Rate

क क_लम म भर* गई रस' वसतषवक ह)। नजसस हम सभ सहमत ह@।

19 पश : 29 म@ आपक आपक कय लय म उपनसथत सव श मह' गप, कमल' गप, श मक ' गप, समस रन पटन , श मत अनज ससह तथ सवS क दFरन इस कय लय म आन वल श मल चDm जट क बयन दज ककय गय ह@ आप इDह दख ल एव इनस वरण त तथय म यदद कई असहमनत त बतय? उतर : म@न उपरक सभ वयडकय क बयन पढ सलय ह@ एव इनम वरण त सभ तथय सह* ह@ तथ इनस हम सभ सहमत ह@। पश:30 म). गस करलड रम स एणड ररसट प.सल. क रनजसटड ऑकरस K-107, कक'न नगर, शयम नगर, करपरट ऑकरस B-32 रज भवन रड, ससषवल लईDस एव सईट ऑकरस महल (जयपर) नसथत कय लय स पप पय गय दसतवज एव लखपसतक

, लज पपस एव कमvयटर स ननकल गय दसतवज म म)

. गस

करलड रम स एणड ररसट प

. सल . गस बबलडस प

. सल . एव गस करलड रयर

क षपटल डवलपस प

. सल . एव गस रयर एसटट प

. सल . स सबधEत ह)। सभ

दसतवज षवसभDन सथन स एकबतत कर कमपन क क_रपरट

B-32,

रजभवन

रड , ससषवल लईDस

, जयपर म एकबतत

, आपक अDय ननद'क एव मह' क मर

गप

, म)नजर क ददख ददय गय ह@। श रम कक'र जट

( गठल

) एव श कमल'

गप दर सइट स लय गय दसतवज भ ददख ददय ह@। इनक बर म आपक क छ कहन ह)? उतर : हमन सभ दसतवज दख सलय ह@। सभ वयडकय दर ददय बयन दख सलय ह@। हम सभ इनस पण तय सहमत ह@। पश : 31 सवS क दFरन षवसभDन सथन स पप incriminating डमयमDट एव दज क बयन क आEर पर उपरक वरण त पश क उतर क आEर पर कर ननE रण 2006-07, 2007-08

एव

2008-09

म क ल

15,00,000/-

अकन पmह करड रपय क&

अघष7त आय क& गणन क& गई ह) ज आय एव कमपन क अDय ननद'क दर क& गई ह)। इस बबत आपक कय कहन ह)? उतर: म@न और श आतम रम गप

, षवमल ससघव एव श मह' क मर गप

, म)नजर न ज

working

करक द* ह) उसक आEर पर

50 व7

2006-07, 2007-08

एव

2008-09

क सलए

15,00,00,000/-

अकन पDmह करड रपय अघष7त आय षवभग

क कर क सलए षववद

(litigation)

समप करन क सलए एव कमपन क कय म

सचर गनत तथ मनससक 'नDत हत 'नDत एव असभयजन स बचन क सलए कर रह ह@। अघष7त आय क& गणन वसतषवक तथय क आEर पर क& गई ह) ज सथ ह)। हमन कई तथय नह* नछपय ह) एव ईशर क सक मनकर पण ह' हवस म बयन ददय ह@।" (emphasis supplied)

10.

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

20 undisclosed investment in purchase of the various properties during the following assessment years :- 2006-07 Rs.3,02,33,672 2007-08 Rs.5,57,72,494 2008-09 Rs.5,68,10,943 Total Rs.14,28,17,110/- Rounded off Rs.15 crore

11.

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 person/associates of the assessee and the Directors clearly admitting about the purchase through these key person/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,

21 however, it is only when a show cause notice was again issued by the AO on 12.3.2008 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 27.3.2008. In our view, the return so filed on 27.3.2008 by no stretch of imagination can be said to be a voluntary act, but after detection.

12.

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” (emphasis 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 22 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.

13.

On the contrary, not only the AO but the learned CIT(A) as well as the learned Judl. 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.

14.

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 fide nor submitted any explanation worth considering, before the AO 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 2.3.2010 which has been reproduced in para 5 hereinbefore, during the penalty proceedings before the AO, 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

23 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.

15.

The Madras High Court in the case of M.S. Mohammed Marzook (Late) And Another v. Income-Tax Officer [2006] 283 ITR 254 (Mad) 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 24 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 merits of the controversy at all, and unless it is demonstrated that the indication made by the AO 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.

18.

The Madras High Court in the case of CIT, Madras v. J.K.A. Subramania Chettiar [1977] 110 ITR 602, had an 25 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 AO, and in the said case the assessee had filed original return disclosing an income of Rs.27,556/-. 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, Lucknow v. Radhey Shyam [1980] 123 ITR 125, 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 26 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 AO 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 16.12.2003, in the case of one M/s. Marketing Services (a sister concern of the assessee). The AO then proceeded to seek information from the assessee and issued a show cause notice dated 26.10.2006. By the show cause notice, the AO 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 22.11.2006, in which the assessee made an offer to surrender a sum of Rs.40.74 lakh 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

27 admitting any concealment whatsoever or with any intention to conceal and subject to non-initiation of penalty proceedings and prosecution." The AO 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 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 AO imposed penalty under Section 271(1)(c) at Rs.14,61,547/- which was upheld by the CIT(A), 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 AO, between reported and assessed income. The 28 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 channelize 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 :- "We are of the view that the surrender of income in this case is not (2009) 9 SCC 589." (emphasis supplied)

18.

Taking into consideration the above facts viz-a-viz 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 AO 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

30 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 AO 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 laws 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 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, Revenue being dissatisfied called for better particulars of investments made by the said assessee whereupon a revised return was filed on 12.1.1990 furnishing all the requisite particulars to the Department. A second revised return was filed on which assessment was made by the AO. The said revised return was accepted by the AO and it 31 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 AO in the penalty proceedings has considered the material again and has come to a definite conclusion about concealment of income.

22.

In CIT v. 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 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

32 which was not originally shown or recorded in the books of accounts.

23.

The case of CIT v. 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 asseessee 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 CIT v. 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 33 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 Judl. 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. (J.K. Ranka) J. (M.N. Bhandari) J. db 25 [All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.] Deepankar Bhattacharya PS

More judgments on Section 133A

All 5,893 judgments and leading authorities on Section 133A →

Recent GST High Court judgments

Search GST case law →