12. We have considered the rival submissions and perused the material on record. The undisputed fact is that return filed by the assessee on 31.7.2001 did not contain any information with respect to the amount of gifts received by the assessee in the name of his children. That return was processed under section 143(1) on 1.2.2002 and notice under section 143(2) was also issued on 14.2.2002 and compliance was required to be made on 1.4.2002 which was not made. Later, Department carried out investigation into the racket of bogus gifts at Kanpur wherein unaccounted money was laundered through certain persons who surrendered themselves to provide accommodation entries by depositing unaccounted cash of the assesses in their account and then transferring it back to the assesses in the form of gifts/loans. During the course of such Investigation, Department had found the account of Shri Vimlesh Kumar and others. Shri Vimlesh Kumar was found a man of no means and it was proved in that case that he was providing accommodation entries to various persons. His bank account was examined from which it was gathered that he had given a cheque of Rs.l lakh to Master Shalab Agarwal minor son of assessee, Shri Deepak Agarwal. Thereafter, the Department required the Principal Officer of Oriental Bank of Commerce to give the details of the account of Master Shalab Agarwal. After receiving all these particulars summon was issued to assessee on 30.1.2003 asking him to provide information in respect of Master Shalab agarwal and to bring all the passbooks and copies of income tax return for assessment year 2000-01 and onwards. No compliance thereof was made. The assessee then on 5.2.2003 filed another return disclosing a sum of Rs.3 lakhs received by him as gift. Thereafter, on 11.2.2003 during the course of statement recorded by the Investigation Wing, the assessee admitted to have received gift amounting to Rs. 1 lakh each in the name of his three minor children and in absence of sufficient proof he is surrendering them voluntarily in the revised return. It is also undisputed fact that neither in the assessment order nor in the penalty order there is any information as to whether Department had any information about bogus nature of gifts in respect of two other donors namely Shri Kailash Prasad Agarwal and Smt Sashi Kala Agarwal. Even though it is in general mentioned by the AO in the penalty order that Department is in possession of copies of bank account of other donors and admission by many of them that they are providing accommodation entries. From this, it cannot be said that there was any reference to the gift given by Shri Kailash Prasad Agarwal and Smt. Sashi Kala Agarwal. On the other hand, there is a clear finding of fact by the AO in the penalty order that Shri Vimlesh Kumar, the other donor was a man of no means and it is successfully proved that he was providing bogus entries and one of such entries was given to Master Shalab Agarwal, son of the assessee. Thus, there are clear distinction as to the facts available with the Department about bogus nature of gifts given by Shri Vimlesh Kumar and by the other two alleged donors. Therefore, the gifts given by Shri Vimlesh Kumar and other two donors cannot be placed at par so far as levy of penalty under section 271(1)(c) of the Act is concerned. In the first case, i.e in the case of Shri Vimlesh Kumar, Department had positive information and summons were issued to the assessee whereas in the case of other two donors, there being no information with the Department, it could not be said that summon could relate to inquiries in respect of gifts given by these two donors. No doubt, apparently, gifts in all the three cases are not genuine and this is the reason the assessee has declared them in the revised return.
13. A gift is considered to be made out of alleged claim of natural love and affection. Donor and donee are presumed to have a intimate relationship whereby donor might be prompted to give gift to the donee. In the present case, the donees and donors had executed gift deeds, a copy of each has been filed in the paper book submitted by assessee. It is strange and not acceptable the claim of the assessee that a donor would not come forward to prove the gift given by him to the persons with whom he had so much of affection and love that prompted to him to part away his hard earned money and give gifts to the donees. There are no reasons advanced by the assessee from which it could be inferred that relationship between the donors and the donees had gone sore and therefore, donors are unlikely to come forward to prove the gift and therefore, assessee is constrained to declare the same in the revised return of income. There is also no material placed on the record by the assessee so as to infer therefrom that a transaction (gift) which originally did not carry the characteristics of income, when original return was filed, has now become taxable which necessitated to file a revised return. Onus is on the assessee to prove that circumstances have changed, something new has happened beyond his control, that he cannot prove the gifts. If no material is placed by the assessee, then change of opinion by the assessee, originally claiming that gifts are genuine and gift deeds are filed and later when Department starts enquiry into the racket, suddenly coming forward and declare the gifts as income, can not be held to be bonafide. In the present case, there is no material to show that this was a genuine omission or a wrong statement in the original return. The right to revise the return under section 139(5) is not free from fetters. It is not a case that assessee can at his own will include or exclude any item of income in the revised return. The right to revise the return’, under section 139 (5) is available only when assessee discovers any omission or wrong statement in the return originally filed. The Hon’ble Karnalaka High Court in the case of K.E.Sunil Babu. ACIT vs Steel Processors and Others, 286 ITR 315, held that a revised return is permitted to be filed if there is any bona fide mistake in the original return. The assessing authority upon proof of the bona fide reasons can accept the revised return and pass necessary orders in accordance with law. Similar view was held by Hon’ble AP High Court in the case of CIT vs Andhra Cotton Mills Ltd, 219 ITR 404 and Hon’ble Kerala High Court in the case of T.S.Radha Raju vs CIT, 214 ITR 730.
14. In the present case, what is sought to be included in the revised return by the assessee is the amount of gifts as assessee’s income. The fact that gifts are genuine or bogus is in the very knowledge of the assessee. If they are genuine then there is no reason or necessity to treat them as mistake or omission prompting the assessee to file the revised return by including the same as income. If they are bogus then it is very much in the knowledge of the assessee even at the time when it filed original return on 31.7.2003. Therefore, if the gifts are bogus then they are bogus as on 31.7.2003 as well as on 5.2.2003. Omission means something which assessee was not aware and was discovered later after filing original return. Discovering mistake in the original return means that assessee was not in the knowledge of certain facts and figures or about mathematical calculations carried out to arrive at the income declared in the original return. If such wrong statement or arithmetical mistakes arc discovered or where something which was no! in the knowledge of the assessee was discovered as omitted from declaring in the original return then such cases would fall for being covered in the revised return. But the fact of gifts as to whether they are genuine or bogus could not be said to be discovered subsequently after filing of the original return. If the gifts are bogus they are bogus right from the day one and if they are genuine they are genuine right from the day one. Otherwise, there has to be material to show that there was a bonafide change of circumstances. We are thus unable to accept the contention of Id.AR that assessee has discovered certain omission or wrong statement which prompted him to file revised return by including the amount of gifts as his income in the revised return. In our considered view, revised return filed on 5.2.2003, does not qualify as revised return within the meaning of Section 139(5) as there is no discovery of any omission or wrong statement in the original return filed on 31.7.2003.
29. Thus, on the basis of above authorities, we cull the principle that an assessee has a right to file revised return under section 139(5) if he discovers an omission or wrong statement in the original return. Such discovery should be bona fide and there should be material on record to show that omission was unintentional and due to inadvertence. Further where AO starts inquiry and has prima-facie belief that certain amount of income has not been disclosed by the assessee in the original return and after coming to know that AO is seized with the matter, assessee declares such item of income by filing revised return then it could not be said that assessee had declared additional item of income voluntarily or after discovery of certain omission or wrong statement. There has to be material on record to show that omission or mistake or wrong statement was bona fide and by inadvertence. Section 139(5) has not been enacted for providing an escape route to the assessee when he is caught in the penal provisions relating to evasion of tax and AO is in the process of collecting evidence to nail him down. It is not necessary that AO should have established concealment of income prior to filing of revised return by the assessee within the ambit of Section 139(5). It is not the intention of law to give a right to file a revised return to those assesses who know very well at the time of filing original return that gifts taken by them are not genuine, but are only in an arranged affair and when investigations are started then they came forward and declare them as their income in their revised return. As already discussed above, gift is not an item which could be said to be discovered subsequently as being the income of the assessee required to be disclosed in the revised return. However, there are certain circumstances as already pointed out which may prompt an assessee to declare gift as his income bin there has lo be some material tin record to show that such circumstances existed.
30. In the present case, assessee has not put up any material to show that there were circumstances and event taken place after filing original return that he has decided to change his opinion and declare the gifts as income. Accordingly, we hold that assessee is guilty of filing inaccurate particulars of income and also concealing particulars of income by not declaring gifts as his income in the original return. The case of the assessee also falls in Explanation 1 where explanation cannot be said to be bona fide as there is no material on record to prove his bonafide.
31. However, considering the fact that AO had material on his file with respect to one gift only by way of statement of Shri Vimlesh Kumar, related bank accounts of Shalab Agarwal, minor son of the assessee, we hold that assessee is guilty of filing inaccurate particulars of income in case of one gift only. Though there is no material on record to suggest that there is a bona fide change of mind in respect of other two gifts, but considering various authorities as above, the declaration of other two gifts as income in the revised return do not fall strictly within the scope of Section 271 (1XC) of the Act as it can be said that AO having no material in respect of other two gifts even to frame a prima-facie belief that they are bogus or they represent assessee’s concealed income, a declaration thereof in the revised return can be said to be voluntary.
32. As a result, penalty in respect of one gift is restored. The order of ID CIT(A) in canceling penalty in respect of other two gifts is confirmed.