Punjab & Haryana High Court in an important case namely CIT V M/S Careers Education and Infotech Pvt. Ltd., has held that voluntarily surrender of income cannot exonerate the assessee of its liability to pay penalty if it can be held that there was concealment of Income or furnishing of inacurate particulars. But in every case of surrender, inference of concealment of income cannot be drawn by itself by applying section 58 of Evidence Act.
The AO must establish and prove the concealment of income even if there is surrunder of income by assessee and mere surrender cannot lead to levy of penalty u/s 271(1)(c) for concealment of income.
Facts of the case: During the course of survey, the assessee surrendered additional income and also filed revised return accordingly. The Assessing Officer accepted the revised return made by the assessee but also initiated penalty proceedings. Thereafter, penalty was also levied on the assessee which was upheld by the CIT(A) following judgment of the Madras High Court in P. Govindaswamy v. CIT {2000} 244 ITR 510. Therein, it was held that since under Section 58 of the Evidence Act, 1872, admitted facts need not be proved, once the assessee made surrender, it could be taken to be admitted that the assessee had concealed income.
On appeal to Tribunal it was asserted by Tribunal that the AO has not uttered a single word in the assessment order to say that there was any concealment of income of assessee having noticed by the survey team or by the AO himself.
Tribunal further asserted that The AO has imposed the penalty considering the additional income as income from undisclosed sources and has alleged the assessee has filed revised return only after detection of concealed income during the course of survey. In case there was any detection of concealed income either by the survey team or by the AO, why the same has not been pointed out in the assessment order. Not an iota of evidence was narrated to support the addition made except the surrender made by the assessee himself. When no concealment was ever detected by the survey team or by the AO, no penalty was imposable.
On Appeal to High court the appeal was dismissed uphelding the assertion and verdict of tribunal.
Verdict of High Court: No doubt even voluntary surrender of concealed income may not exonerate the assessee of its liability to pay penalty if it can be held that there was concealment of income or furnishing of inaccurate particulars. In the present case, the Tribunal has recorded a categoric finding that there was no material to infer concealment of income or furnishing of inaccurate particulars. The contention that in every case where surrender is made inference of concealment of income must be drawn under Section 58 of the Evidence Act cannot be accepted. Judgment of the Madras High Court also does not lay down such wide proposition. The observations therein are on facts of that case. The said judgment is, thus, distinguishable.
Full Judgmement can be downloaded herebelow:
CIT V M/S Careers Education and Infotech Pvt. Ltd(P&H HC)
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The AO must establish and prove the concealment of income even if there is surrunder of income by assessee and mere surrender cannot lead to levy of penalty u/s 271(1)(c) for concealment of income.
Facts of the case: During the course of survey, the assessee surrendered additional income and also filed revised return accordingly. The Assessing Officer accepted the revised return made by the assessee but also initiated penalty proceedings. Thereafter, penalty was also levied on the assessee which was upheld by the CIT(A) following judgment of the Madras High Court in P. Govindaswamy v. CIT {2000} 244 ITR 510. Therein, it was held that since under Section 58 of the Evidence Act, 1872, admitted facts need not be proved, once the assessee made surrender, it could be taken to be admitted that the assessee had concealed income.
On appeal to Tribunal it was asserted by Tribunal that the AO has not uttered a single word in the assessment order to say that there was any concealment of income of assessee having noticed by the survey team or by the AO himself.
Tribunal further asserted that The AO has imposed the penalty considering the additional income as income from undisclosed sources and has alleged the assessee has filed revised return only after detection of concealed income during the course of survey. In case there was any detection of concealed income either by the survey team or by the AO, why the same has not been pointed out in the assessment order. Not an iota of evidence was narrated to support the addition made except the surrender made by the assessee himself. When no concealment was ever detected by the survey team or by the AO, no penalty was imposable.
On Appeal to High court the appeal was dismissed uphelding the assertion and verdict of tribunal.
Verdict of High Court: No doubt even voluntary surrender of concealed income may not exonerate the assessee of its liability to pay penalty if it can be held that there was concealment of income or furnishing of inaccurate particulars. In the present case, the Tribunal has recorded a categoric finding that there was no material to infer concealment of income or furnishing of inaccurate particulars. The contention that in every case where surrender is made inference of concealment of income must be drawn under Section 58 of the Evidence Act cannot be accepted. Judgment of the Madras High Court also does not lay down such wide proposition. The observations therein are on facts of that case. The said judgment is, thus, distinguishable.
Full Judgmement can be downloaded herebelow:
CIT V M/S Careers Education and Infotech Pvt. Ltd(P&H HC)
Share |
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