B INDIRA RANI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IT Ref. 160/1999 and 161/1999 arise out of ITA Nos. 879 and 880/Coch/1991 on the file of Tribunal, Cochin Bench. Assessment years concerned are 1979 -80 and 1980 -81. The following questions of law arise for consideration :

(2.) THE AO issued notice under Section 147(a) to reopen the assessment with the approval of the CIT. Reassessment was completed on an income of Rs. 1,64,910 which included Rs. 55,000 added as income from other sources. For the asst. yr. 1980 -81 the assesses had filed the original return on 18th Aug., 1980, admitting a total income of Rs. 42,653. The assessment was completed on a total income of Rs. 88,450. On a search conducted assesses made a disclosure under Section 273A on a sum of Rs. 74,500 as investment in a vehicle. Later, she filed a revised return on 21st May, 1985, offering a further sum of Rs. 13,231 as income on account of investment in immovable property. In the revised return the total income declared was Rs. 1,76,181. For this year also the AO issued notice under Section 147(a) with the approval of the CIT for reopening the assessment. The reassessment was completed on a total sum of Rs. 2,55,680 which included Rs. 78,000 added as income from other sources. The AO initiated penalty proceedings under Section 271(1)(c) and levied a penalty of Rs. 74,934 for the asst. yr. 1979 -80 and Rs. 1,18,723 for the asst. yr. 1980 -81. The CIT(A) concurred with the AO that penalty was leviable on account of the concealment of income by the assessee. But the appellate authority felt that for the asst. yr. 1979 -80 in computing the penalty the addition of Rs. 55,000 as income from other sources was to be excluded. For the asst. yr. 1980 -81 the direction given by the CIT(A) was to exclude the sum of Rs. 78,000 for the purpose of computing the penalty. Assessee took up the matter in appeal before the Tribunal and contended that the CIT(A) was not justified in upholding the penalty. The Tribunal upheld the penalty, but made an observation that the assessee could seek other remedy by way of reduction or waiver before the CIT. The assessee is aggrieved by those orders and hence these revisions.

(3.) COUNSEL appearing for the Revenue submitted that the assessee had not disclosed the income by way of investment in vehicles and landed properties. Only after search was conducted the assessee first made the declaration under Section 273A. Counsel further submitted that even without the aid of the Explanation the main provision of Section 271(1)(c) would be sufficient to justify the penalty. Counsel also placed reliance on various decisions such as Niranjan and Co. (P) Ltd. v. CIT : [1986]159ITR153(SC) , N. Sundareswaran v. CIT : [1972]84ITR173(Ker) , Western Automobiles v. CIT : [1978]112ITR1048(Bom) , CIT v. A. Sreenivasa Pai : [2000]242ITR29(Ker) , CIT v. K.P. Madhushudhanan : [2000]246ITR218(Ker) , CIT v. Kishorekumar Shamji : [2000]244ITR702(Ker) . etc.