Judgment:
D.A. Mehta, J.
1. In all these appeals as the controversy Involved is common, they are taken up for hearing and disposal together.
2. The issue relates to levy of penalty under Sections 271(1)(a), 271(1)(c) and 273(2)(a) of the IT Act, 1961 (the Act). For the present it is not necessary to specify the penalties levied year-wise. Suffice it to state that various penalties relate to asst. yrs. 1982-83 to 1985-86.
3. Originally when the appeals had come up for hearing, the following question was proposed by appellant-Revenue:
Whether the Tribunal is right in law and on facts in cancelling the penalty levied under Sections 271(1)(c), 271(1)(a) and 273(2)(a) of the IT Act, on the ground that benefit under the amnesty scheme was available to the assessee, when subsequent to search operation, the assessee itself had revised its returns on a number of time, which would go to show that the return was not voluntary?
After hearing the parties vide order dt. 25th Oct., 2005 the appeals came to be rejected by the High Court holding that no substantial question of law arose from the impugned common order of the Tribunal dt. 28th May, 2004. Revenue carried the matter in appeal before the apex Court and the following order has been made by the apex Court on 12th Feb., 2008 and, therefore, the appeals have been heard once again:
In the Supreme Court of India
Civil Appellate Jurisdiction
Civil Appeal No. 1252 of 2008
[Arising out of Special Leave Petition (C) No. 19085/2006]
CIT v. C.A. Taktawala
Order
Delay condoned.
Leave granted.
Having heard learned Counsel for the parties, we are of the view that the High Court had erred in not answering the question which, in our opinion, was the substantial question of law under Section 260A of the IT Act, 1952 (sic-1961).
We quote hereinbelow for the sake of convenience the said question :
Whether on the facts and circumstances of the case, the Tribunal was right in law and on facts in cancelling the penalty levied under Sections 271(1)(a) and 273(2)(a) of the IT Act, on the ground that benefit under the amnesty scheme was available to the assessee, particularly when subsequent to search operation, the assessee itself had revised its returns on a number of occasions, which would go to show that the return was not voluntary?
For the sake of clarity we also annex here the position of various returns filed for various assessment years in question:
------------------------------------------------------------------------------------Asst. yr. 1982-83 1983-84 1984-85 1985-86-----------------------------------------------------------------------------------1. Original return filed on 3-3-83 12-7-84 28-6-85 28-6-85-----------------------------------------------------------------------------------Income declared Rs. 1,19,949 1,10,700 60,210 8.070-----------------------------------------------------------------------------------2. First revised return filed on 31-3-86 28.11.85 28.11.85 31-3-86-----------------------------------------------------------------------------------Income declared Rs. 44,58,688 1,22,460 72,220 79,460-----------------------------------------------------------------------------------3. Second revised return filed on 29-9-86 30-3-86 31-3-86 29-9-86-----------------------------------------------------------------------------------Income declared Rs. 25,27,210 14,99,630 10,71,970 1,86,700-----------------------------------------------------------------------------------4. Third revised return filed on 23-2-87 23-2-87 29-9-86 25-2-87-----------------------------------------------------------------------------------Income declared Rs. 24,98,769 16,96.350 6,54,572 9,67,830-----------------------------------------------------------------------------------5. Fourth revised return filed on ...... ...... 26-2-87 ......-----------------------------------------------------------------------------------Income declared Rs. ...... ...... 2,99,540 ......-----------------------------------------------------------------------------------6. Original asst. order passed on 23-3-85 31-3-86 30-3-87 30-9-87-----------------------------------------------------------------------------------Assessed income Rs. 20,29,840 15,31,240 11,70,540 10,27,700-----------------------------------------------------------------------------------7. Reassessment order passed on 31-8-87 7-9-87 ...... ......-----------------------------------------------------------------------------------Ultimate assessed income Rs. 38,22,110 16,98,150 ...... ......-----------------------------------------------------------------------------------Having considering the above chart with relevant documents we are of the view that the above question needs to be considered by the High Court.
Accordingly, the impugned order is set aside and the matters are remitted to the High Court for fresh consideration in accordance with law.
Accordingly the tax appeal Nos. 281-288 of 2005 stand restored to the file of the High Court.
The appeal is disposed of with no order as to costs.
Sd/-
(S.H. Kapadia)
Sd/-
(B. Sudershan Reddy)
New Delhi
12th Feb., 2008.
4. In light of the aforesaid directions made by Supreme Court whereby substantial question of law under Section 260A of the Act has been formulated the Court has not found it necessary to make any formal order of admission as the appeals have already been admitted by the apex Court.
5. Though in the order the apex Court has formulated the question, it appears that due to typographical error Section 271(1)(c) of the Act has not been incorporated in the question but the parties have been permitted to address the Court in relation to penalties levied under all the three provisions and hence, the following question has been considered:
Whether, on the facts and circumstances of the case, the Tribunal was right in law and on facts in cancelling the penalty levied under Sections 271(1)(a), 271(1)(c) and 273(2)(a) of the IT Act, on the ground that benefit under the amnesty scheme was available to the assessee, particularly when subsequent to search operation the assessee itself had revised its returns on a number of occasions, which would go to show that the return was not voluntary?
6. As can be seen from the impugned order of the Tribunal the facts recorded by the Tribunal are taken from the order of the CIT(A) for asst. yr. 1984-85. In para No. 3 the Tribunal has reproduced a chart showing the position of various returns filed for assessment years under appeal, which is as under:
-----------------------------------------------------------------------------------Assessment years-----------------------------------------------------------------------------------1982-83 1983-84 1984-85 1985-86-----------------------------------------------------------------------------------1. Original return filed on 3/3/83 12/7/84 28/6/85 28/6/85-----------------------------------------------------------------------------------Income declared therein Rs. 1,19,949 1,10.700 60,210 8,070-----------------------------------------------------------------------------------2. First revised return filed on 31/3/86 28/11/85 31/3/86 31/3/86-----------------------------------------------------------------------------------Income declared therein Rs. 38,20.680 1,22,460 10,71,966 79,460-----------------------------------------------------------------------------------3. Second revised return filed on 30/3/86 26/2/87 29/9/86-----------------------------------------------------------------------------------Income declared therein Rs. 14,99,630 2,99,541 1,86,700-----------------------------------------------------------------------------------4. Third revised return filed on 25/2/87-----------------------------------------------------------------------------------Income declared therein Rs. 9,67,830-----------------------------------------------------------------------------------5. Assessment order passed on 31/8/87 31/3/86 30/3/87 30/9/87and31/7/87-----------------------------------------------------------------------------------Ultimate assessed income 38,22,110 15,31,240 2,89,540 10,27,700-----------------------------------------------------------------------------------6. Reassessment order passed on -- 7/9/87 -- -- -----------------------------------------------------------------------------------Ultimate reassessed income -- 16,98,150 -- -------------------------------------------------------------------------------------
Thereafter, the Tribunal has recorded the following facts:
Thus, from the perusal of above details, it reveals that returns in different years were revised on number of occasions. In asst. year 1984-85, the original return was filed on 28th June, 1985 declaring total income at Rs. 60,200 wherein the assessee has disclosed salary income, interest on securities, income from house property, business income and income from other sources. A search and seizure operation was carried out at the residential and business premises of the assessee along with the premises of connected entities on 20th Feb., 1984. As a result of search, certain incriminating materials were found. During the investigation for asst. yrs. 1982-83 to 1984-85 it reveals that amounts received by the assessee in his name or in the name of the family members or in the names of the company in which the assessee or his family members were having substantial interest from M/s Patel Glass Corporation and M/s Sunlight Enterprises were shown as either interest free loans or withdrawals, although these amounts were in the nature of income. The assessee had utilized these amounts for investment in income yielding movable or immovable assets as well as for meeting personal obligations. On such investigation;, it was concluded that the assessee had used M/s Patel Glass Corporation and Sunlight Enterprises as a conduit for siphoning the funds from Vallabh Glass Works Ltd. When the assessee was confronted with this incriminating material and outcome of the investigation he filed a revised return of income for asst. yr. 1984-85 on 31st March, 1986 wherein additional income of Rs. 9,99,743 was disclosed as amounts received from M/s Patel Glass Corporation. In support of his return, the assessee wrote a letter to the CIT, Gujarat requesting him that return was filed under amnesty scheme and benefit of that scheme should be extended to him. However, the AO has recorded a finding that the assessee was informed that his so-called disclosure made by him was largely as a result of search and subsequent investigation by the ITO, the declaration in his case would not be covered by the amnesty scheme. Against this, additional declared income of Rs. 9,99,743 the assessee claimed deduction of Rs. 8,71,000 on the ground that this amount was referable to the loans by M/s Patel Glass Corporation from the bank against the assessee's personal bank guarantee. This claim of the assessee was rejected and his total income was determined by the AO on Rs. 11,70,540. However, subsequently in the proceedings under Section 264 of the Act, the learned CIT reduced the total income of the assessee by Rs. 8,71,000 vide his order dt. 29th July, 1987 and ultimately the income assessed for asst. yr. 1984-85 stood reduced to Rs. 2,81,504. The learned AO did not grant the benefit of amnesty scheme to the assessee and initiated the penalty proceedings under Section 271(1)(c) along with other provisions. Ultimately the AO arrived at a conclusion that the assessee has concealed the particulars of his income and liable to be visited with penalty under Section 271(1)(c) of the Act. Consequent to the denial of amnesty benefit, the assessee was held leviable (sic-liable) to be visited with penalty under Sections 271A, 273(2)(a) as well as under Section 18(1)(c) of the WT Act in all the assessment years.
7. In context of the aforesaid facts the learned senior standing Counsel appearing for the appellant Revenue in all the appeals, contended that search and seizure operation was carried out at the residential and business premises of the respondent assessee along with premises of connected entities on 20th Feb., 1984. That the original return was filed on 28th June, 1985 for asst. yr. 1984-85, namely, subsequent to the date of search under Section 132 of the Act and return of income was revised on 28th Nov., 1985, 31st March, 1986, 29th Sept., 1986 and 26th Feb., 1987 which indicated that the original return and the revised returns could not be considered to be voluntary returns bearing in mind the date of search i.e. 20th Feb., 1984. In this context the learned Counsel extensively read from the order of the AO and CIT(A) for asst. yr. 1984-85 to submit that in 1986 the AO had issued show-cause notice dt. 19th Feb., 1986, permitted cross-examination of certain persons between 6th March, 1986 to 8th March, 1986 as requested by the assessee, the assessee had filed reply on 19th March, 1986 and after considering all these the AO had come to the conclusion that neither were the returns voluntary nor was there full and true disclosure. That in fact the AO had detected material pursuant to search forcing the assessee to revise returns from time to time. That even CIT(A) had, after considering the facts, come to the conclusion that the revised returns could not be said to have been filed under Section 139(5) of the Act and the assessee had not made full and true disclosure. The learned Counsel placed reliance on decision of this Court in case of Deepak Construction Co. v. CIT : [2007]293ITR285(Guj) to submit that in similar circumstances the Court had categorically held that the assessee was not entitled to benefit under the amnesty scheme.
8. An alternative contention was raised based on the following two decisions of this Court:
(i) Ramesh Chandra M. Luthra v. Asstt. CIT : [2002]257ITR460(Guj) ; and
(ii) S.J. & S.P. Family Trust v. Dy. CIT : [2005]277ITR557(Guj)
to submit that the impugned order of Tribunal was also bad in law because the Tribunal had failed to give any reason as to how the order of CIT(A) was bad in law. That the Tribunal was required to deal with the reasons recorded by CIT(A) and could not have made an order without first recording as to why the order of first appellate authority could not be sustained.
9. Lastly, it was contended that if the Court came to the conclusion that the facts recorded by the AO and CIT(A) were insufficient or deficient, the matter be restored to the file of the AO so as to bring on record further material.
10. As against that on behalf of the respondent assessee it was submitted that, according to Revenue, merely because returns were revised a number of times, they should not be treated to be voluntary returns, but there was nothing in the amnesty scheme to warrant such an interference. Inviting attention to various questions and answers which have been reproduced by the Tribunal, being part of circulars forming the amnesty scheme, it was contended that question and answer No. 12 appearing in Circular No. 451, as well as question Nos. 19 and 30 along with respective answers had to be read in conjunction and could not be read in isolation. That the amnesty scheme did not provide for any prohibition for filing a revised return and the said fact could not be held against the assessee if the requirement of detection of concealment by the Department was not shown to be satisfied. Placing reliance on Bombay High Court judgment in case of CIT v. Attar Mohd. Dawood & Bros. : [2004]267ITR436(Bom) it was submitted that identical controversy was there before Bombay High Court and the only distinguishing feature, if one can term the same to be so, was that in the case before the High Court of Bombay there is only one revised return while in the case of the assessee return was revised on a number of occasions, but the said distinction was without any difference because as submitted, the only requirement was that the return had to be voluntary and in good faith and before detection by the Department. That on facts the Tribunal had found in no uncertain terms that there was no material recovered during search to which the returns filed by the assessee were relatable and, therefore, the case of the assessee was directly governed by answers to question Nos. 19 and 30 of Circular No. 451. It was, therefore, urged that the appeals were required to be dismissed.
11. In relation to the alternative contentions it was submitted that none of the alternative contentions merited acceptance in the facts and circumstances of the case and the Court should hold accordingly.
12. For appreciating the various circulars issued by Central Board of Direct Taxes (CBDT) which go to form the amnesty scheme (the Scheme) it is necessary to consider order dt. 14th Feb., 1986 issued by CBDT under Section 119(2)(a) of the Act. The said order reads as under:
Order dt. 14th Feb., 1986 [F. No. 281/8/86-IT(Inv. III)]
IT Act. 1961: Order under Section 119(2)(a): Direction to ITO and LAC not to initiate penalty proceedings under Section 271(1)(a) or 271(1)(c) or 273 in respect of any assessment year upto and including asst. yr. 1985-86
In exercise of the powers conferred by Clause (a) of Sub-section (2) of Section 119 of the IT Act, 1961 (43 of 1961), the CBDT hereby directs that the ITO and the IAC shall not initiate any proceeding for imposition of a penalty on a person or impose penalty on him for an offence under Clause (a) or Clause (c) of Sub-section (1) of Section 271 or Section 273 in respect of any assessment year upto and including asst. yr. 1985-86 in a case, if he is satisfied that such person:
(a) has prior to the detection by the ITO, or, as the case may be, the IAC, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made between the 15th day of November, 1985, and the 31st day of March, 1986, a full and true disclosure of such income;
(b) has, on or before the 31st March, 1986, paid the tax on the income disclosed; and
(c) has co-operated in any enquiry relating to the assessment of his income.
2. This order shall come into force on the 17th day of February, 1986.
(Sd.) S.K. Roy,
Member (Investigation) CBDT.
[F. No. 281/8/86-IT (Inv. III)]
13. It is necessary to note that similar order of even date has also been issued by CBDT in exercise of powers under Section 13(1) of the WT Act, 1957 and the said order is identically worded for the purposes of penalties under Section 18(1)(a) or Section 18(1)(c) of the WT Act.
14. When one reads the aforesaid order dt. 14th Feb., 1986 issued by CBDT the following requirements emerge:
(i) For any assessment year, upto and including asst. yr. 1985-86, if a person makes full and true disclosure of concealed income or inaccurate particulars which are furnished in a return of income between 15th Nov., 2005 [sic) and 31st March, 1986, coupled with the disclosure being voluntary and in good faith and prior to detection by the assessing authority;
(ii) the person has paid the tax on the income so disclosed on or before 31st March, 1986; and
(iii) the person has co-operated in any enquiry relating to the assessment of such income,
the assessing authority is under a mandate not to initiate any proceedings for imposition of a penalty or not impose a penalty for any of the offences stipulated by Section 271(1)(a), or Section 271(1)(c) or Section 273 of the Act. Therefore, if the assessee shows compliance with the three conditions cumulatively, the assessing authority is not empowered to either initiate or levy penalty under any or all of the three provisions stipulated by the order.
15. Rest of the circulars issued by CBDT from time to time are admittedly clarificatory in nature and, therefore, the clarifications have to be read and understood in context of the fundamental requirements of the aforesaid order. The clarifications cannot be permitted to override or cannot be given precedence over the basic requirements envisaged by the aforesaid order dt. 14th Feb., 1986. Therefore, the impugned order of Tribunal and the challenge thereto by Revenue has to be appreciated in light of the aforesaid legal requirements.
16. Before proceeding further it is necessary to take note of the fact that the second termini of 31st March, 1986 was extended initially upto 30th Sept., 1986 and thereafter upto 31st March, 1987. [Ref.: CBDT Circular No. 453, dt. 4th April, 1986 {(1986) 52 CTR (St) 3} and CBDT Circular No. 472, dt. 15th Oct., 1986]. Therefore, any disclosure made either by way of a solitary return or by way of revised return between 15th Nov., 1985 and 31st March, 1987 will have to be tested on the basis of the conditions stipulated by the aforesaid order dt. 14th Feb., 1986.
17. In this context one may consider Circular No. 451, dt. 17th Feb., 1986 [Ref. : (1986) 51 CTR (St) 82 : (1986) 158 ITR 135], more particularly the following questions and answers:
Circular No. 451, dt. 17th Feb., 1986.
Subject: Clarification regarding the Press note and circulars issued by the Ministry of Finance regarding declaration of higher income or wealth
Following clarifications are hereby issued on the questions raised at different places on the press note of the CBDT and the Circular No. 423 dt. 26th June, 1985, and Circular Nos. 432, 439, 440 and 441 dt. 15th Nov., 1985, issued by the CBDT regarding declaration of higher income or wealth.
Question No. 1 - What will be the procedure required to be followed by the assessee who wants to declare income or wealth in respect of the past years?
(a) in case where the assessments pertaining to those years are already completed;
(b) in case where the assessments in respect of those years are pending.
Answer. - In cases where the assessments are already completed, the taxpayer should approach the concerned CIT with the full disclosure of the amounts of income and/or wealth concealed in various years and should also file returns for the relevant years. He should also produce evidence of payment of taxes before 31st March, 1986. The filing of the returns will be regularized by issue of formal notices under Section 148 of the IT Act/Section 17 of the WT Act. In cases where the assessments are pending, the taxpayer should file revised return before the ITO along with evidence of payment of taxes.
Question No. 4. - The income-tax circulars are not very clear as to whether the immunity from penalty and prosecution is guaranteed to the assessee unlike the circular in respect of wealth-tax which appears to be clear on this point?
Answer. - The immunity from penalty and prosecution applies in all cases whether of income-tax or wealth-tax where the assessee admits the truth and pays taxes properly.
Question No. 12. - Can immunity given by the circulars be availed of by assessees whose premises have been searched by the tax authorities?
Answer. - No.
Question No. 19. - Kindly clarify the expression 'before detection by the Department'.
Answer. - If the ITO has already found material to show that there has been concealment, that would mean the Department has detected the concealment. If the ITO only had prima facie belief, that would not mean concealment has been detected.
Question No. 26. - Where an order has been set aside on appeal or assessment proceedings are pending under Section 147(a)/(b), whether the assessee can surrender the amount which is the subject-matter of dispute? Whether such a surrender would be taken as a sua motu declaration before the detection by this Department?
Answer. - Such a surrender cannot be taken as a sua motu declaration but naturally a lenient view will be taken if an assessee decides to turn honest even at this stage.
Question No. 28. - Where an addition is contested in appeal, whether an assessee could make a declaration and agree to pay tax thereon?
Answer. - Yes, the assessee should withdraw that appeal and make a declaration before the administrative Commr. In such a case, a lenient view will be taken, though such a declaration cannot be taken as entirely voluntary.
Question No. 30. - Whether an assessee could make a declaration in respect of assets or income which is not the subject-matter of seizure?
Answer. - Yes, if it has not been already found out in the course of the search.
18. The aforesaid questions and answers as appearing in Circular No. 451 indicate firstly that there is no prohibition for filing a revised return in a case where assessments are pending. The immunity from penalty and prosecution is guaranteed in all cases under the IT Act or the WT Act where the assessee admits the earning of income or obtaining of wealth and pays proper taxes. However, prima facie, immunity may not be available to an assessee whose premises have been searched by the tax authority, but this has to be understood in context of the subsequent questions and answers more particularly, question No. 30 and answer thereto. Question Nos. 19, 26 and 28 can be treated as forming one group in relation to the concept of detection by the Department. The answer to question No. 19 explains the expression 'before detection by the Department' which appears in the order dt. 14th Feb., 1986 to mean a case where the AO has already found material to show that there has been concealment but not a case where the AO only had a prima facie belief. Similarly, question Nos. 26 and 28 which relate to an assessment already framed which is then set aside in appeal, or where appeal proceedings are pending, state that an assessee is entitled to declare the disputed amount but such a surrender cannot be taken to be a voluntary declaration but the assessee would be in a position to make out a case for a lenient view in such circumstances. Thus, in juxtaposition to question No. 19, question Nos. 26 and 28 and the respective answers indicate as to what is the meaning of the expression 'before detection by the Department'. When these questions and their respective answers are read and appreciated in conjunction, it is indicative of the fact that not only a revised return is permissible but in a given set of facts and circumstances of the case the return could be revised on a number of occasions, the only caveat being the item in question should not have been found to have been concealed. In other words, if only a suspicion exists insofar as the AO is concerned, namely a prima facie belief, an assessee cannot be prevented from either making a declaration or revising a declaration. Only further requirement being the declaration has to be suo motu, namely voluntarily and in good faith, the assessee must pay tax thereon by the stipulated date and co-operate in any inquiry which the Department may undertake after the declaration. At the cost of repetition, one needs to advert back to the order dt. 14th Feb., 1986 only to emphasise the fact that the declaration has to be full and true in relation to concealed income or income of which inaccurate particulars have been furnished in a return already filed.
19. Therefore, the stand of the Department that merely because a concealed income is disclosed and amnesty claimed under the Scheme an assessee becomes ineligible cannot be accepted. In fact the entire Scheme is in relation to assessees who have concealed income which has not been detected by the Department and who intend to disclose the same before such detection.
20. The second set of questions and answers as made up by question Nos. 12 and 30 and their respective answers relate to a case of an assessee against whom proceedings under Section 132 of the Act have been taken. If one reads question and answer No. 12 in isolation it might indicate that every person who is subjected to search proceedings has rendered himself ineligible to opt for the benefit under the Scheme. However, when one reads question and answer No. 30 it becomes clear that the bar is not absolute and even in a case of a person who has been subjected to search proceedings unless and until either concealed assets or concealed income have been subject-matter of seizure during course of the search the assessee will not be prohibited from making a declaration. In other words, in respect of assets or income which are not subject-matter of seizure during search proceedings an assessee would be entitled to make a declaration qua the concealed assets or the concealed income.
21. The findings of the Tribunal will have to be hence appreciated in light of the aforestated position in law. The relevant extract from the order of the Tribunal may be reproduced for ready reference:
For denying the benefit of amnesty scheme, the AO should have been in possession of certain materials which can lead to a conclusion that the assessee had concealed the income. Mere suspicion of concealment would not suffice for denying the benefit of amnesty scheme. Whether in the present case, such material was available or not is the next question. On perusal of the show-cause notice available at page No. 1 of the paper book, it reveals that by 19th Feb., 1986, the AO has a suspicion about the concealed income of the assessee. This show-cause notice was subject to the reply of the assessee as well as the statement relied upon by the AO were subject to the cross examination. Thus, conclusively it cannot be said that AO was in possession of certain material which can establish the concealment by this date. After filing the reply on 19th March, 1986 to the show-cause notice of the AO, the assessee had revised his return on 31st March, 1986 and availed the benefit of amnesty scheme. On perusal of the assessment order, it reveals that additions on the basis show-cause notice have not been made. Therefore, it indicates that sufficient material was not with the AO which exhibits in the existence of concealed income. We also find that in spite of search operation carried out at the assessee's premises neither any incriminating material was found nor any addition was made on the basis of seized material. In view of reply of question No. 30, benefit of amnesty scheme cannot be denied to the assessee merely on the basis that search was carried out at the premises of the assessee. As far as the 3rd condition is concerned, i.e. co-operation of the assessee, we are of the view that the assessee has declared an income more than Rs. 117 lacs along with his wife and paid tax of Rs. 97 lacs. From the very right he has been knocking the door of Department for granting the amnesty scheme. The additions have been made in the assessment orders only on the declaration made by the assessee with some minor variation, otherwise Department was unable to lay his hand on the concealed income of the assessee. Hence, it cannot be said that assessee was not co-operative with the Department.
On appreciation of facts, we arrived at a conclusion that before detection of concealment, the assessee has filed his revised return under the amnesty scheme and fulfill all the requisite conditions for which the benefit should be granted to him.
22. The aforesaid findings of the Tribunal establish that pursuant to show-cause notice dt. 19th Feb., 1986 and cross-examination of certain persons between 6th March, 1986 to 8th March, 1986 the assessee filed a reply on 19th March, 1986 responding to the show cause notice. The Tribunal, on appreciation of the aforesaid evidence, has recorded that conclusively it could not be said that the AO was in position [sic-possession) of certain material which could establish concealment by the said date. The Tribunal thereafter goes on to observe that on perusal of the assessment order the proposed additions on the basis of show-cause notice have not been made when the assessment was finalized. The Tribunal, therefore, once again reiterates that the AO did not have sufficient material to establish existence of concealed income. The Tribunal further finds that in spite of search operation carried out at the premises of the assessee the Department did not have in its possession any incriminating material nor was any addition made on the basis of the seized material. That in fact the additions have been made in the assessment order only on the basis of the declaration made by the assessee subject to certain minor variation, otherwise the Department was not able to lay its hands on any concealed income.
23. The Tribunal has, therefore, come to the conclusion that the declaration made by the assessee was voluntary and in good faith, the declaration was full and true, the assessee had paid taxes to the tune of Rs. 97,00,000 (Rupees ninety seven lakhs) on the disclosed income and the assessee had co-operated with the Department, and all this was before detection by the Department because the Department was not in a position to point out any concrete material to establish concealment.
24. In light of the aforesaid findings of fact based on appreciation of evidence on record, it is not possible to hold that the impugned order of Tribunal suffers from any legal infirmity so as to warrant interference.
25. As against that in case of Deepak Construction Co. (supra) on which reliance has been placed by Revenue the High Court noticed following facts:
A perusal of the notice dt. 24th Feb., 1986, would show that the AO had already detected concealment of the income. He had made the following observation:
On scrutiny of squared up accounts and details filed by you it is noticed that following new deposits have been received and paid back by you during the accounting year itself. He also observed that, 'detailed scrutiny of the above data makes it crystal clear that you have introduced unaccounted money on various dates as under and taken out of books before close of the accounting year'. He lastly observed that, 'I intend to add this cash credit of Rs. 1,64,500 to the income disclosed by you, as income from undisclosed sources'.
on the basis of which the High Court came to the conclusion that the disclosure made by the said assessee was not voluntary and there was detection by the Department in the said case. Therefore, though there is no conflict as to the principles of law the said decision primarily turned on the facts found in the said case, namely, there was detection by the Department as reproduced in the extracted portion.
26. In light of what is stated hereinbefore none of the alternative contentions raised by the Counsel for Revenue merits acceptance. The two decisions in the cases of Rameshchandra M. Luthra (supra) and S.J. & S.P. Family Trust (supra) have to be appreciated in light of the fact that the orders made by the Tribunal therein were not reasoned speaking orders whereas in the facts of the present case it cannot be stated that the impugned order of the Tribunal suffers from the said vice. In fact the impugned order of Tribunal has not only succinctly set out the position in law but recorded findings of facts after appreciating evidence on record, the same record on which reliance has been placed by Revenue authorities while levying penalties.
27. Similarly, the second alternative contention to remit the matter back to the AO for undertaking the entire process de novo also cannot be accepted considering the fact that this is not a case where the Revenue was not having sufficient time or opportunity to make out its case. In fact both the AO and the appellate authority have made elaborate orders but without appreciating the correct position in law. After hearing both the sides and having gone through the record and the impugned order of the Tribunal, the Court does not find it necessary that any further or fresh material is necessary for recording a decision. Hence, there is no question of granting a second innings to the Revenue.
28. Therefore, the question is answered in the affirmative. The Tribunal was right in law and on facts in cancelling the penalties under Sections 271(1)(a), 271(1)(c) and 273(2)(a) of the Act on the ground that is stated in the impugned order and the factum of mere filing of revised returns on a number of occasions cannot show in the facts and circumstances of the case that the returns were not voluntary. The appeals are accordingly dismissed. There shall be no order as to costs.
Registry to place a copy of this order in connected matters.