Case Law Details
Merely because assessee cooperated in deciphering the seized documents would not mean that the revenue authorities could not have deciphered the same without voluntary assistance of assessee : High Court of Bombay.
Shardadevi P. Jhunjhunwala Vs. CIT, W. P. No. 428 of 1996, September 14, 2009
Gist of decision :
When the disclosure is made subsequently to the seizure of incriminating material, the disclosure is made because of adverse consequences and such disclosure is not voluntary. On the facts of the case, the disclosure was made pursuant to search and seizure of incriminating material which includes the diary. The issue whether the authorities could have deciphered the documents on their own without petitioner co-operating, is immaterial. There is nothing on record to state that in due course exercising their powers under the Act, the authorities could not have deciphered the seized material. Explanation 2 has since been omitted w.e.f. 1st Oct., 1984. What this would mean is firstly the contention raised on behalf of the petitioners that the seizure of documents by authority other than ITO/AO is not detection by the AO has to be rejected. Secondly and consequently once the documents are seized then any disclosure subsequently made would not be voluntary. The omitted Explanation only had sought to bring or to make it voluntary for a period which otherwise was not voluntary. The omission would only mean that this deemed voluntariness is now no longer legally available. The diary contained incriminating material based upon which the additional income was disclosed. Merely because petitioners co-operated in deciphering the documents would not mean that the Revenue authorities could not have deciphered the same. The test is whether any incriminating material was found. On the petitioner’s own statement the diary contained incriminating material. The application was made after that incriminating material was found. In these circumstances, the contention urged on behalf of the petitioners must be rejected. It is true that the CIT did not consider this aspect of the matter. That however, does not mean that the finding otherwise arrived at by the CIT that the disclosure was not voluntary can be faulted.
The test is of undue or genuine hardship. The genuine difficulty would also mean that there is hardship that will be occasioned if the petitioner was called upon to pay the penalty. Such hardship normally would be financial hardship that would be occasioned. The only ground made out on behalf of the petitioner is by referring to their contention as raised in the written statements which were filed that the petitioners had entrusted all their shares to Unit Trust of India to be sold at any available price but the petitioners in the said argument itself have thereafter stated as under : “This evidently shows the spirit of co-operation and desire to comply the terms of s. 273A.” It was not on the ground of financial hardship. Documentary evidence by way of balance sheet or any other material was not produced to show that the petitioners were not in a position to pay the penalty and if they had paid penalty, there would be adverse consequences on the petitioners. It was for the petitioners to produce that material to discharge the burden and for the respondents to consider the same. No such material was placed by the petitioner before respondent No. 1. In the absence of placing material, petitioners cannot be heard to complain that there was non-compliance by the CIT in considering the case under s. 273A(4). The CIT has recorded a finding that the petitioner did not produce any evidence to show that he did not have adequate financial resources. That by itself must have met the test. However, in the absence of the petitioners placing any other material on hardship, the findings recorded by the CIT cannot be faulted with.
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