Case Law Details
ITO Vs Ramsons Castings (P.) Ltd. (Bombay High Court-Nagpur Bench);
In the present proceedings, the assessing officer accepted the revised return of income filed by the respondent-Assessee declaring additional income of Rs. 1.40 crores. The assessing officer did not independently either in the Assessment proceedings or even in the penalty proceedings examine the contention of the respondent-Assessee that there was no excess stock as found by the Income Tax Officer during the survey proceedings. Neither any exercise was done independently to find out whether the excess stock alleged was supported by any other evidence. This particularly in the face of the respondent-Assessee asserting that the stock taking was not properly done. In-fact, at the very first instance, the respondent-Assessee did point out that no exercise was done to weigh the stock to determine the shortage if any. In-fact, the shortage was arrived at on basis of estimate and the respondent-Assessee had itself surrendered additional income to buy peace of mind and avoid unnecessary litigation. It did not accept that actual stock was more than that recorded in its books and during the proceedings also submitted a chart showing no excess stock.
It is now a settled position of law after the Apex Court order in Mak Data (supra) that an Assessee is not absolved of penalty because the additional income has been declared to buy peace. It must follow therefore that the above strategy (buy peace) by itself will not justify imposition of penalty, unless the requirement of the section under which the penalty is imposed are satisfied.
It is the above context that the Revenue places strong reliance upon paragraph 10 of the decision of the Apex Court Mak Data (P.) Ltd. (supra) to contend that facts are identical, therefore, penalty must follow. The Assessee in the above case had during survey operation made voluntary disclosure of income. Similar to the present case submits the Revenue. However, the distinction in this case is that the respondent-Assessee had at the first opportunity i.e. when statement has been recorded, contended that the manner and method of quantification of stock done during the course of survey proceeding was not correct. In-fact, even after that it was consistently writing to the Authorities that there is no excess stock and the manner in which the stock taking has been done is not correct. This was not so in the case of Mak Data (P.) Ltd. (supra). In the case of Mak Data (P.) Ltd. (supra), the Assessee did not dispute the facts of undisclosed income at any time/stage. Therefore, paragraph 10 of the decision in Mak Data (supra) will have no application in absence of the Revenue being able to show that there has been a conduct which would warrant penalty upon the respondent-Assessee namely either concealment of income or filing of inaccurate particulars of income. In the present facts, the respondent-Assessee was consistently stating that there is no excess stock in his possession. That, it was subject to central excise control and no proceeding for clandestine removal of goods etc. were initiated against the respondent-Assessee. Further, in these facts, the respondent-Assessee, the Commissioner (Appeals) and the Tribunal have held that no penalty is imposable, as the respondent-Assessee herein has consistently contended that there is no excess stock. This contention has not been examined and commented upon the Revenue before imposing of penalty. Thus, the impugned order of the Tribunal calls for no interference.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:-
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