Income Tax Appellate Tribunal - Ahmedabad
Late Shri J. B. Naik vs Deputy Commissioner Of Wealth Tax. on 10 August, 1992
Equivalent citations: (1993)45TTJ(AHD)206
ORDER
K. R. DIXIT, J.M. :
In these appeals the ground is common and, therefore, they are disposed of by this common order.
2. The ground is that the Dy. Commissioner(A) erred in rejecting the assessees claim for immunity under the Amnesty Scheme. The assessees contention is that since the return was filed before the search, he was entitled to immunity from penalty under the relevant CBDT circular and so penalty proceedings could not be initiated.
3. So far as the asst. yr. 1980-81 is concerned, the assessment order does not show that any penalty proceedings have been even initiated. The Dy. Commissioner(A), however, has rejected the assessees appeal on the ground that immunity cannot be granted where raid had been conducted. Since as stated above, the penalty proceedings had not been initiated the appeal for asst. yr. 1980-81 is misconceived and is accordingly dismissed.
4. Regarding the asst. yrs. 1981-82 and 1982-83, the assessment orders do show that penalty proceedings had been initiated. For those years also the learned Dy. Commissioner(A) has rejected the assessees appeals on the same ground i.e., that the benefit of immunity cannot be granted where raid had taken place.
5. It can be seen that the appeals are not only against the imposition of penalty but also against the initiation of penalty proceedings. Regarding initiation there is nothing in the circular prohibiting it nor is there any right of appeal against it either in the Act or in the circular.
6. Regarding the scope of immunity against penalty granted by the circular, the assessees plea is that the returns were filed before the raid. Although the circular does say that immunity cannot be granted, where a raid has taken place, reasonable meaning would be that immunity can be denied only where the disclosure has been made after and as a result of the raid. In this connection question No. 19 and the answer to it in Circular No. 451 dt. 17th Feb., 1986 [printed in (1986) 158 ITR (St) 135] may be reproduced :
"Q. No. 19. Kindly clarify the expression before detection by the Department?
Answer : If the ITO has already found material to show that there has been concealment that would mean the Department has detected the concealment. If the ITO only had prima facie belief that would not mean concealment has been detected."
This shows that the emphasis is on the finding of the material that there has been concealment and not merely on the fact that raid has taken place. Further, the position becomes more clear in answer to question No. 30. They are :
"Q. 30 Whether an assessee could make a declaration in respect of assets or income which is not the subject-matter of seizure ?
Ans. : Yes, if it has not been already found out in the course of the search."
Thus, it is clear that what is important is not the search but what has been found in the search. The essence of the matter is that immunity can be given only in respect of what is disclosed but not found in the raid. If the raid has been conducted after the return has been filed it is possible that something more may be found in the raid than what is disclosed in the return. That will not deprive an assessee of immunity regarding the disclosure made in the return before the raid. All this can be explained in the penalty proceedings after they are initiated. For this reason also there is no bar to initiation of penalty proceedings. Therefore, what has to be seen is whether the assessee has disclosed in the return everything and nothing has been found in the raid which is not so disclosed. However, as stated above mere initiation of penalty proceedings is not prevented by the circular. Therefore, the Dy. Commissioner(A)s orders for the two asst. yrs. 1981-82 and 1982-83 are confirmed but for different reasons as above.
7. In the result, all the appeals are dismissed.