N.RANJIT Vs. COMMISSIONER OF INCOME TAX-V

JUDGEMENT

(1.) THIS Tax Case Appeal, relating to the assessment year 2002-03, filed by the assessee against the order of the Tribunal challenging the levy of penalty, was admitted on the following substantial questions of law:

(2.) THE assessee is an individual. He filed return of income on 29.07.2002, admitting salary income of Rs.21,07,645/-. On 11.03.2005, there was an enquiry by the Investigation Unit I(3), Chennai, in the assessee's wife's case as regards certain mutual fund transaction made by her. In the course of enquiry, a statement was recorded from the assessee herein on 01.04.2005. On 09.05.2005, the assessee herein is stated to have filed a revised return for the year 2002-03, wherein, he offered an amount of Rs.79,08,118/- under the head of 'capital gains'.

(3.) THE Assessing Officer, however, rejected the said contention and pointed out to the chronological order of events that had taken place, leading to the filing of the revised return. The Assessing Officer pointed out that prior to 2005, the Investigation Wing of the Department received an information from CIB on the mutual fund transactions by Mrs.Kanchana, the assessee's wife. Thereupon, Kanchana, wife of the assessee, was called upon to show the source of huge funding for investment in mutual funds. This led to further investigation. During the course of recording of sworn statement dated 01.04.2005, the assessee did not admit the transactions in shares and the source of acquisition of shares. After referring to the statements recorded and the answers to the queries raised, the Assessing Officer pointed out that confronted with the situation that the Department had evidence against the assessee as regards the earning of income on the transaction in shares, the assessee was forced to admit the same by filing revised returns, admitting long term capital gains of Rs.79,08,118/-. Thus, looking at the conduct of the assessee, the Assessing Officer came to the conclusion that there was no voluntariness on the part of the assessee in filing the revised return. Thus the wilful act of concealment of particulars and furnishing inaccurate particulars being there, he levied minimum penalty of Rs.8,06,628/-.