SHRI JYOTI LAXMAN KONKAR, NAVELIM GOA. vs. THE COMMISSIONER OF INCOME TAX, PANAJI GOA.

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 25­11­1999 for the Assessment   Year   1999­2000   declaring   an   income   of Rs.7,40,510/­.   Not   satisfied   therewith,   the   Assessing   Officer carried   out  a survey under Section 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   Assessing   Officer 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 Section 271(1)(c) of the Act to impose penalty was issued to the assessee and which was disposed of by Order dated 25­5­2001 and a penalty of Rs.2,75,000/­ was imposed upon the assessee. In the said Order, the Assessing Officer observed that the  assessee  had  come  forward  with  the revised return out of 3 compulsion since suppression of income was  detected  in survey carried out under Section 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 Commissioner of Income   Tax   which   came   to   be   disposed   of   by   Order   dated 21­9­2001. In  allowing the  assessee's appeal, the  Commissioner of   Income   Tax   relied   upon   the   decision   in   the   case   of C.I.T.  v.  Suresh Chandra Mittal(2000 ITR 124) as affirmed  by the Supreme Court in C.I.T. v. Suresh Chandra Mittal(2001 ITR 9).   The   Revenue   carried   an   appeal   to   the   ITAT(Income   Tax Appellate   Tribunal)   and   ITAT   by   Order   dated   2­1­2006   was pleased to allow the same. In disposing of the said appeal of the Revenue,   the   ITAT   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   ITAT   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

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 Section 139(5) of the   Act   at   any   time   as   prescribed   therein   and   having   filed   the same and the  Assessing Officer 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  case  of  Century  Flour  Mills Ltd. v.  Commissioner   of   Income  Tax((2000) 162 CTR(SC)0407),

In   the   case   of  K.C.   Builders v. Assistant Commissioner of Income Tax ((2004) 265 ITR 562) 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 figure or some particulars have been 6 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  v. Commissioner   of   Income   Tax((2005)278   ITR   599)   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 Section 271(1)(c) of the Act.  In the case of West Bengal   State   Electricity   Board  v.  Deputy   Commissioner   of Income Tax and another  ((2005)278 ITR 218 (Cal)) a Division Bench   of   Calcutta   High   Court   held   that   the   question   regarding jurisdiction  of  the  Assessing  Officer  can be raised for the first

In our view, the Assessing Officer as well as the ITAT 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   Commissioner   of Income Tax 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 8 involved   in   this   case   requiring   the   admission   of   the   appeal. Consequently the same is hereby dismissed. SMT. RANJANA DESAI, J. N. A. BRITTO, J. RD