Tax Case No. 372 of 1974 (Reference No. 185 of 1974)

Decided on February 9, 1977

The Judgment of the Court was delivered by

Ismail, J.:— The matter relates to penalty proceedings taken with reference to the assessment year 1963-64. The assessee filed a return of income on March 16, 1964, disclosing a total income of Rs. 27,566 which comprised the following items:

Rs. Income from property 125 Income from personal business Share income from the firm of 21,655 M/s. Murugan Talkies 5,776 27,556

2. Subsequently, on February 7, 1968, he filed a second return of income which showed the following position:

Rs. Income from property 125 Income from personal business 69,143 Share income from firm 5,776 75,044

3. The Income-tax Officer completed the assessment on December 31, 1968, on a total income of Rs. 3,15,201, which consisted of:

Rs. Income from property 1,347 Income from business 3,13,854 3,15,201

4. The business income of Rs. 3,13,854 was made up of share income from Messrs. Murugan Talkies of Rs. 2,769 (income other than property income) and Rs. 1,440, (income from “local business”) and income from export and import business of Rs. 3,09,645. The Income-tax Officer noted the following facts in computing the business income at Rs. 3,09,645.

(i) The assessee had exported handloom goods for Rs. 1,22,370 to Ceylon and the entire export value was remitted to India during the year in question. Though the assessee had estimated a profit of 5% on such exports in his letter dated February 5, 1968, in his subsequent letter dated November 20, 1968, the assessee claimed that if premia on import licences were to be estimated with reference to market quotations, then export loss should be allowed.

(ii) The assessee had not led in any evidence that there was a loss in export business. Hence, it had to be taken that there was no profit or loss on exports.

(iii) As regards the import licences (art silks and dyes) the assessee admitted that these licences were sold instead of being utilised; but the exact price for which licences were sold was not made available. The assessee had estimated the premium at 60% on art silk licences and at 30% on dyes licences. But, taking into account the market quotations, the total sale value of these licences had to be taken at Rs. 3,09,645.

(iv) In the absence of any evidence for expenditure incurred on the sale of these licences, the entire sum of Rs. 3,09,645 had to be adopted as net income on the sale of these licences. There were hundi loans in the name of some Madras bankers, the peak of which amounted to Rs. 2,55,000. All the licences could have been sold by December, 1962. There was, therefore, clear evidence that the bogus credit of Rs. 2,55,000 should be out of art silk licence.

5. Thus, the total business income was estimated at Rs. 3,13,854. The Income-tax Officer initiated proceedings under section 271(])(c) of the Income-tax Act, 1961, hereinafter referred to as “the Act”. By way of reply to the notice issued by the Inspecting Assistant Commissioner, who proposed to impose penalty on the assessee, the contention of the assessee was that a petition under section 271(4A) of the Act had been filed by the assessee along with the second return of income and that the same should be taken into consideration. It was also pointed out that the assessment had been taken on appeal and that the assessee had made a claim therein for a deduction of 50% of the licence value of the import licences in question towards middleman's profit and had also claimed loss on export remittances which were being allowed in other similar cases and that if these claims were to be allowed, the income determined would get reduced by about Rs. 1,50,000. The Inspecting Assistant Commissioner did not see any merit in these submissions and he levied the penalty in question mainly for the following reasons:

(i) In the second return filed by the assessee on February 7, 1968, a further income of about Rs. 48,000 relatable to the assessee's trafficking in import licences was disclosed. Concealment had to be adjudged with reference to the return originally filed and with reference to the revised return. Hence, the assessee was guilty of concealment.

(ii) Even the revised return was only an understatement because it did not clearly set out the basis on which the profit on sale of licences had been computed and what deductions had been claimed for expenses and on what basis. The assessee cannot, therefore, justifiably complain against the estimate adopted by the Income-tax Officer.

(iii) The records showed that it was only after the Income-tax Officer started investigation into the bogus nature of the hundi transactions that the assessee came forward with a revised return, firstly, for 1962-63 and thereafter for 1963-64. The admission as to the falsity of the hundi loans came only after the hearing on February 4, 1967 in connection with the assessment proceedings for 1962-63.

(iv) In any case, the return of income having been filed after April 1, 1964, the Explanation to section 271(1) will apply, shifting the onus to the assessee to show that the difference between the income returned and the income assessed was not due to any gross or wilful neglect or fraud on his part. The assessee failed to discharge that burden and on that ground also penalty was leviable, especially in the light of the fact that as against the income of Rs. 75,044 the assessed income came to Rs. 3,09,645.

6. The assessee took up the matter on appeal to the Tribunal. Before the Tribunal, the assessee contended that after filing the original return and before any detection by the department, the assessee himself filed a petition under section 271(4A) for the assessment year 1962-63, on February 4, 1967, and in that very petition it was stated that the hundi loans were not genuine, but brought into the books for adjustment or for cash, partly out of licence income. It was also submitted further that, in view of the fact that the import debits and the art silk cloth manufacturing operations were unreal, the books did not reflect the correct position and, therefore, the peak credit thereof would not be a proper indication of the undisclosed income. The assessee also contended that in that petition itself he had declared an income of Rs. 75,078 being the profit on sale of import licences. Similarly, for the assessment year in question, that is, for 1963-64, the assessee had mentioned in his letter dated February 5, 1968, full details about the licence and, therefore, it was made before any detection. The Tribunal held that the assessee filed the revised return before the Income-tax Officer started investigation into the bogus nature of the hundi transactions of the assessee in the course of the assessment for 1962-63. The Tribunal also held that, in view of the revised return, there was no concealment of income by the assessee and for that purpose referred to the decision of this court in Commissioner of Income-tax v. Ramdas Pharmacy, [1970] 77 ITR 276 (Mad). The Tribunal further held that the Explanation to section 271(1)(c) of the Act could not be invoked in so far as the assessment year 1963-64 was concerned, because it was put on the statute book only from April 1, 1964. On these findings and conclusions, the Tribunal cancelled the penalty imposed on the assessee. It is the correctness of this order that is challenged by the Commissioner of Income-tax, Madras (Central), Madras, who applied for and obtained a reference on the following question, arising out of the order of the Tribunal, for the opinion of this court:

“Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee had not concealed the income or furnished inaccurate particulars of income and in cancelling the penalty of Rs. 47,500 levied under section 271(1)(c) of the Income-tax Act, 1961?”

7. Section 271 of the Act dealing with the levy of penalty in so far as it is relevant reads as follows:

“271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person……

(c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income,

he may direct that such person shall pay by way of penalty,…….

(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income.”

8. By section 40 of the Finance Act, 1964, with effect from April 1, 1964, the following Explanation was introduced:

“Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section.”

9. We shall now consider the meaning of the above statutory provision with reference to the facts of this case. As we have pointed out already the first return was filed by the assessee on March 16, 1964, in which he disclosed a business income of Rs. 27,431. Subsequently, the second return was filed by the assessee on February 7, 1968, in which he disclosed a business income of Rs. 74,919. By an order dated December 31, 1968, the Income-tax Officer arrived at the business income of Rs. 3,13,854. It would appear from the order of the Tribunal that the Tribunal had reduced the income so assessed, on appeal preferred by the assessee. But there is no material to show as to what was the final business income determined by the Tribunal. The further fact is that the assessee himself admitted that he had filed a petition under section 271(4A) of the Act before the Commissioner of Income-tax, wherein he stated that the credits found in his accounts were bogus, that his account books could not be relied upon and that he had not utilised the import licences, but had sold them away. From the above facts, it is clear that the assessee had concealed his income both in the first return filed on March 16, 1964, and in the second return filed on February 7, 1968. The only other question for consideration is whether the said concealment will come within the scope of the provision in section 271(1)(c) of the Act which we have extracted already or not. The section uses the expression “has concealed the particulars of his income.” It is implicit in the word “concealed” that there has been a deliberate act on the part of the assessee. The meaning of the word “concealment” as found in Shorter Oxford English Dictionary, third edition, volume I, is as follows:

“In law, the intentional suppression of truth or fact known, to the injury or prejudice of another.”

10. Consequently, there can be no doubt, with reference to the facts stated above, that both in the first return as well as in the second return the assessee had intentionally and deliberately concealed the particulars of his income.

11. The question then for consideration is whether the fact that the assessee filed a petition before the Commissioner under section 271(4A) of the Act and also filed a second return on February 7, 1968, will be sufficient to absolve him from liability to penalty under section 271(1)(c) of the Act. We may mention in this context that even in the second return the assessee had not given the true particulars of income and this is made clear by the assessee's own stand that if some of the claims put forward by him with reference to import licences had been admitted, the income determined would get reduced by about Rs. 1,50,000. As we have pointed out already the income determined by the Income-tax Officer was Rs. 3,13,854. If that income is reduced by Rs. 1,50,000 still the income from business would be Rs. 1,63,854 which is certainly not the one returned by the assessee in the second return filed on February 7, 1968. Therefore, in whichever way the matter is looked at, still the assessee had concealed particulars of his income in both the returns. Hence, we are of the opinion that the assessee cannot escape from liability to penalty under section 271(1)(c) of the Act.

12. Considerable stress appears to have been laid on the assessee's filing the second return on February 7, 1968. We are of the opinion that the filing of the second return by the assessee is not of any consequence against the background of the facts set out above.

13. Section 139 of the Act deals with filing of the return and sub-section (5) of that section states:

“If any person having furnished a return under sub-section (1) or subsection (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made.”

14. In our opinion, section 139(5) will apply only to a limited category of cases, namely, where in the original return there was any omission or any wrong statement. The very word “omission” connotes an unintentional act. Equally, the words “wrong statement” will not take in “a statement known to be false to the person who made the statement.” However, the word “discovers” occurring in section 139(5) will make it clear that at the time of discovery only, a person who has furnished a return finds out that an inadvertent omission or an unintended wrong statement had crept in the return filed by him. If a person who furnished the return was aware of the falsity of the statement and the incorrectness of the particulars of income even at the time when he filed the original return, there was no question of that person subsequently discovering the existence of the omission or creeping in of the wrong statement in the return already filed by him. Therefore, we are of the opinion that section 139(5) will apply only to cases of “omission or wrong statements” and not to cases of “concealment or false statements”. This conclusion of ours derives support from the language used in section 139(5).

15. As far as the present case is concerned, the second return filed by the assessee on February 7, 1968, whether the same was filed before any investigation was started by the income-tax department or after the investigation was started by it, will not be a revised return as contemplated by section 139(5) of the Act. All that can be stated is that if, after having filed the return on March 16, 1964, the assessee furnished further particulars to the Income-tax Officer with reference to his income, the Income-tax Officer was certainly bound to take note of those particulars, as he was bound to take note of the particulars even if they were furnished by a third party. Therefore, the fact that the assessee furnished the second return on February 7, 1968, even before any investigation was started by the income-tax department cannot be of any assistance to him, if the case does not fall within the scope of section 139(5) of the Act. As a matter of fact, whether the assessee furnished the particulars before any detection was made by the department or not may be relevant only when the Commissioner is considering the question as to whether the minimum penalty imposable under section 271(1) should be waived or reduced, on an application made by an assessee under section 271(4A) of the Act, because section 271(4A)(ii)(a) expressly states that the Commissioner may, in his discretion, reduce or waive the amount of minimum penalty imposable on a person under clause (iii) of sub-section (1), if he is satisfied that such person has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income in respect of which the penalty is imposable, or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars. However, such considerations are foreign to the scope of section 271(1)(c) of the Act. Consequently, we are of the opinion that the Tribunal was in error in holding that there had been no concealment of particulars of income in the present case.

16. Arunachalam Chettyar v. Commissioner of Income-tax, [1931] 6 ITC 58 (Mad) [FB] is a decision of this court dealing with the corresponding provisions, namely, section 28(1)(c) of the Indian Income-tax Act, 1922, hereinafter referred to as “the 1922 Act”. In that case, the assessee made a return of his income on August 22, 1928. That return was incorrect to the extent of Rs. 34,327. After the assessee had made the return, the Income-tax Officer, while examining some other accounts made certain discoveries and in the beginning of January, 1929, he appeared to be on the point of discovering this deliberate and fraudulent omission of the assessee. Faced with this impending discovery, the assessee filed a revised return on January 7, 1929, purporting to be under section 22(3) of the 1922 Act, corresponding to section 139(5) of the Act. The Income-tax Officer assessed the assessee to income-tax on his revised return, but at the same time inflicted on him a penalty of Rs. 2,000 under section 28 of the 1922 Act owing to the concealment of income. It was this act of the assessee which led to the levy of penalty which came up to this court. This court observed (page 62):

“It is argued here that the assessee discovered on the 7th January, 1929, that his previous return was an inaccurate one and that he was, therefore, entitled to claim the benefit of section 22(3) and make a revised return and as that has been accepted no penalty can be inflicted upon him for having concealed his income. That certainly is the correct statement of what an assessee is entitled to do, if he makes a bona fide discovery that he has made a previous incorrect return but it certainly does not apply to the facts of this case which show clearly that the previous return was deliberately dishonestly made. It is seriously argued that, notwithstanding that fact, the assessee is still enabled to put in a return correcting his former inaccurate one and that he is to be absolved from liability to have any penalty inflicted upon him. That, it seems to me, is to put a premium on dishonesty and nowhere in the Income-tax Act do we find any provision which does anything of the kind. The contention that this was a discovery within the meaning of section 22(3) is of course futile. As the Income-tax Commissioner points out in his order of reference the assessee did not discover on that day that he had made an incorrect return because at the time when he made his previous return he knew it was incorrect and he could not at any subsequent time have discovered something which he knew at an earlier time. Under these circumstances, the income-tax authorities were perfectly correct and within their rights in inflicting the penalty upon the assessee.”

17. Ayyasami Nadar & Bros. v. Commissioner of Income-tax, [1956] 30 ITR 565 (Mad) is another decision of this court dealing with the corresponding provision of the 1922 Act. In that case, after the assessee filed his return, the assessee examined himself before the Income-tax Officer and in the course of his examination he conceded that certain items of credit which were shown as if the moneys belonged to outsiders were really his own moneys and the profits of the business. On this statement, the assessment was completed and penalty proceedings were initiated. The argument that was advanced on behalf of the assessee was (page 567):

“…that as the assessee had a right to submit a revised return of his income—and his admission before the Income-tax Officer should be taken as such revised return—there was no concealment of the particulars of his income in this notionally revised return.”

18. Dealing with that argument, the court stated (page 567):

“We consider that there is no substance in this point particularly in view of the finding of the income-tax authorities, that the admission by the assessee was made after the Income-tax Officer had come to know of the facts, and that in the circumstances he was forced to admit these facts. Even apart from this, we consider that section 28(1)(c) would be attracted if there had been a deliberate concealment of particulars in any return, and in the circumstances of the present case it is clear that the original return did not disclose considerable portions of the income and the finding is that the concealment was deliberate.”

19. In Vadilal Ichhachand v. Commissioner of Income-tax, [1957] 32 ITR 569 (Bom) the Bombay High Court, in dealing with section 28(1)(c) of the 1922 Act, held that the return that had to be taken into account under section 28(1)(c) of the 1922 Act was the return which if accepted would have avoided tax and which was not accepted and that, therefore, the penalty had to be calculated on the basis of the original return and the Tribunal erred in holding that the revised return subsequently filed had to be taken into account and that the assessee was not liable to penalty.

20. In Dayabhai Girdharbhai v. Commissioner of Income-tax, [1957] 32 ITR 677 (Bom) the Bombay High Court again, dealing with section 28(1)(c) of the 1922 Act, pointed out (page 680):

“Now, Mr. Pandit on behalf of the assessee, in the first instance, has argued that every assessee has a right to file a revised return under section 22, sub-section (3), and if that return is in effect accepted, the earlier return must be treated as cancelled for all purposes and no penalty can be imposed in respect of any concealment in the earlier return. Now, it is perfectly true that every assessee has the right under section 22, sub-section (3), to submit a revised return if he discovers any omission or wrong statement in his original return before the assessment is made. But the omission or wrong statement may be accidental or deliberate. Where it is accidental, no result may ensue by reason of the omission; but where the omission is deliberate, the results of such deliberate omission cannot be got rid of merely by filing a revised return.”

21. Sivagaminatha Moopanar & Sons v. Commissioner Of Income-Tax, Madras., [1964] 52 ITR 591 (Mad) is yet another decision of this court dealing with section 28(1)(c) of the 1922 Act. In that judgment, this court observed (page 596):

“If an assessee, therefore, makes a false return knowing it to be false, the fact that he subsequently discloses the true particulars of income cannot prevent the application of the section which is intended to punish fraud or contumacy on the part of the assessee. Indeed in such a case it would not even be open to the assessee to submit a revised return: see Arunachalam Chettyar v. Commissioner of Income-tax, [1931] 6 ITC 58 (Mad) [FB]. The point, therefore, is not whether all the particulars were given at the time of the return or at or before the assessment, but whether at any time the assessee deliberately concealed particulars or gave false particulars. That obviously is a question of fact. In the decision of the question certain tests are applied to find whether the suppression, etc., was deliberate. Where for example the original return is incorrect, but the assessee voluntarily submits the correct return before the assessment, the Tribunal would be justified in coming to the conclusion that there was no concealment. This would be so even if the assessee put forward a false case after giving voluntarily the particulars. But where the disclosure was under circumstances which make it not a voluntary act of the assessee, there would be a justification for the finding that there was a concealment because there was an intention to conceal and actual concealment at the beginning, the attempt having been frustrated by other causes. It cannot, therefore, be held that wherever particulars are given before the actual assessment, there would be no concealment.”

22. After referring to the decision in Ayyaswami Nadar & Brothers v. Commissioner of Income-tax, [1956] 30 ITR 565 (Mad), to which we have already drawn attention, this court observed [1964] 52 ITR 591, 597 (Mad):

“It follows that, if the assessee, at the time of submitting the original return intended to conceal a part of his income or deliberately gave false particulars at that time, the mere fact that he subsequently rectified the omission by giving the full particulars would not avoid the applicability of section 28(1)(c).”

23. We may point out, with respect, that there would appear to be a mixing up of two things—(1) the act of filing of the subsequent return giving full particulars of the income, while in the original return the assessee had deliberately furnished inaccurate particulars of income, and (2) the stage and the time at which the subsequent return was filed, namely, whether it was done voluntarily or at the time when the department had probed into the matter and was at the point of discovering the concealment made by the assessee.

24. As we have pointed out already, the second aspect will have no relevancy whatever to a case where there was concealment in the original return, because the concealment must necessarily imply a deliberate and intentional act, on the part of the assessee. After having originally concealed the income, if an assessee subsequently files a fresh return voluntarily before the income-tax department has made any investigation or detected concealment of income, even then he cannot escape from the consequence of his having concealed the income and he will be liable to penalty. If, on the other hand, the defect in the original return was merely an inadvertent omission or unintended wrong statement, certainly the assessee had a right to have the same corrected and to file a revised return under section 22(3) of the 1922 Act or under section 139(5) of the Act and whether the assessee so files a revised return voluntarily or after the Income-tax Officer has noticed the omission or wrong statement will be totally immaterial.

25. Our attention was drawn to a decision of the Jammu and Kashmir High Court in Bakshi Mohd. Yusuf and Bakshi Mohd. Shaft v. Commissioner of Income-tax, [1974] 93 ITR 38 (J & K). In that case, the conclusion of the court was (page 44):

“……….. there is hardly any circumstance which goes to prove culpable negligence or wilful omission on the part of the assessees so as to suggest that their conduct in not giving correct particulars in their returns was deliberate.”

26. In view of this particular finding of the court on the facts of that case, that decision does not advance the case any further.

27. The Gauhati High Court in F.C Agarwal v. Commissioner of Income-tax, [1976] 102 ITR 408 (Gauhati) had occasion to deal with the scope of section 139(5) and section 271(1)(c) of the Act. After referring to the provisions of section 139 including sub-section (5) thereof, the court observed (page 418):

“If after having furnished the return the assessee discovers that some omission has taken place or some wrong statement has crept in in the return, he may file a revised return wherein he may correct the omission or the wrong statement made in the original return. Sub-section (5) further provides that in order to enable an assessee to file a revised return as contemplated under sub-section (5) the omission or wrong statement that might have occurred or crept in in the original return, must be discovered by the assessee himself. In other words, if after examining the return and accounts in the proceedings the discovery of the omission or wrong statement is made by the departmental authority and thereafter the revised return purported to be under sub-section (5) is filed, that will not be considered as a revised return under sub-section (5). As a proposition of law it may be correct that if a revised return as contemplated under sub-section (5) is submitted before the assessment is made after the assessee having discovered some omission or some wrong statement in the original return and in the revised return he makes correction of the omission or the wrong statement, a penalty proceeding for concealment of the particulars of income or furnishing inaccurate particulars of such income as contemplated under clause (c) of sub-section (1) of section 271 may not be attracted. But, to avoid the penalty proceeding as contemplated under section 271(1)(c) by reason of submission of revised return, the revised return itself must be within the correct ambit and scope of sub-section (5) of section 139 of the Act. If it cannot be said that a revised return in fact does come within the correct ambit and scope of section 139(5), then immunity from section 271(1)(c) cannot be availed of by the assessee.”

28. If we may say so with respect, we entirely agree with the above observations of the Gauhati High Court. We may also point out that the liability to penalty under section 271(1)(c) of the Act and the filing of a revised return under section 139(5) of the Act are mutually exclusive. Section 139(5) of the Act proceeds on the basis of omission or wrong statement which had crept into the original return being inadvertent and unintentional, while section 271(1)(c) of the Act proceeds on the basis of concealment being deliberate and the furnishing of inaccurate particulars being wilful and intentional. Consequently, if a case falls within the scope of section 139(5) of the Act, there would be no chance for levy of penalty under section 271(1)(c) of the Act. If, on the other hand, the case does not fall within the scope of section 139(5) of the Act the fact that the assessee purported to file a revised return will not absolve him from liability to penalty under section 271(1)(c) of the Act, if he had concealed particulars of income or deliberately furnished inaccurate particulars of income in the original return already filed by him.

29. Now, if remains for us to consider the decision of this court in Commissioner of Income-tax v. Ramdas Pharmacy, [1970] 77 ITR 276 (Mad) referred to already and relied on by the Tribunal itself. The facts of that case lie within a very narrow compass. For the assessment year 1952-53, the assessee which was an unregistered firm carrying on business in drugs and chemicals filed a return of income on September 11, 1952, disclosing a net profit of Rs. 54,107. The Income-tax Officer felt that the gross profit disclosed by the assessee was too low. He also scrutinised the account books of the assessee and discovered certain discrepancies. He further discovered huge deposits amounting to Rs. 2,79,112 in the bank accounts of some of the partners of the firm. When called upon to explain these discrepancies and the deposits, the partners representing the assessee-firm explained that there were some differences between the partners, that partners Nos. 4 and 5 were carrying on business in the same line in contravention of the partnership, that in order to offset extra profits, the remaining partners had prepared bills showing lesser sale price than the actual sale price and deposited the extra sale proceeds in the names of its three partners and that remittances to Messrs. Amrit Laboratories Ltd. were made with the extra cash, but the entries were postponed to dates when the cash balance as per the cash book maintained were sufficient to accommodate the remittances already made. The assessee-firm sent a letter dated May 16, 1953, stating that the profit actually made by the firm during the relevant year amounted to Rs. 82,725 and on June 6, 1953, the assessee-firm actually filed a revised return disclosing the said income of Rs. 82,725. It is against the background of these facts, the question came to be considered whether the assessee was liable to penalty under section 28(1)(c) of the 1922 Act or not. The Tribunal held that the assessee was not liable to penalty. After referring to the earlier decisions, this court referred to the facts as stated above and stated (page 290):

“The Tribunal took the view that, as the assessee has made a true disclosure of his income in the revised return before the assessment is completed, the assessee cannot be said to have deliberately concealed the true income. Normally, whether there was a deliberate concealment of income or not is a question of fact and the Tribunal has, on the facts and circumstances of this case, held that the assessee had not deliberately concealed income and that, therefore, the penalty levied under section 28(1)(c) was not justifiable. The Tribunal felt that merely because the assessing and appellate authorities made an addition to the income on the basis of an estimate of the gross profit, it will not lead to the inference that there was deliberate concealment of income on the part of the assessee in the revised return. We are not in a position to say that the assessment of the evidence in the case by the Tribunal and its conclusion thereon is in any way vitiated. We are also of the view that the explanation offered by the assessee for not disclosing the sum of Rs. 28,618 in the first return is possible of acceptance and in the face of such acceptable explanation, a deliberate intention on the part of the assessee-firm to conceal the income cannot be inferred.”

30. From the above extract from the judgment and also the facts to which we have drawn attention, it is clear that that decision was rendered on the particular facts of that case and the judgment itself makes that clear. Since the assessee in that case had offered an explanation as to why certain amount was not disclosed in the original return filed and that explanation was accepted by the Tribunal and the court, the finding was that there was no deliberate intention to conceal the income. In view of this specific finding with reference to the facts of that case, we cannot hold that this decision of this court takes a view different from the legal position emerging from the other decisions to which we have already drawn attention.

31. In the course of the said decision, this court observed (page 289):

“We are, at the same time, not willing to accept the contention put forward on behalf of the revenue that the filing of the second return is of no consequence at all, while considering the liability of the assessee under section 28(1)(c) of the Act. As expressed by this court in Sivagaminatha Moopanar & Sons v. Commissioner Of Income-Tax, Madras., [1964] 52 ITR 591 (Mad), it is not possible to construe the original return alone in isolation without reference to the assessee's conduct subsequent to the filing of the original return. We are of the view that all the facts and circumstances commencing with the filing of the original return and ending with the assessment may be taken as relevant for considering the assessee's liability for penalty under section 28(1)(c).”

32. We are of the opinion that the above observation has to be understood against the background of the facts of that case. As a matter of fact, all the facts and circumstances commencing with the filing of the original return and ending with the assessment may be taken as relevant for considering whether the assessee had concealed particulars of income or furnished inaccurate particulars of income, as contemplated by section 28(1)(c) of the 1922 Act and only when there is a finding that the assessee had concealed particulars of income or deliberately furnished inaccurate particulars of income in the original return, the question as to his liability to penalty will arise.

33. The last decision is that of the Gujarat High Court in D.V Patel & Co. v. Commissioner of Income-tax, [1975] 100 ITR 524 (Guj), which avowedly dealt with the Explanation to section 271(1)(c) of the Act introduced with effect from April 1, 1964. In the course of the judgment, that decision merely referred to the decision of this court in Commissioner of Income-tax v. Ramdas Pharmacy, [1970] 77 ITR 276 (Mad), and extracted a portion of the head-note to that decision as reported in the Income Tax Reports. That decision dealing with the Explanation has not taken a view different from the one which we have indicated as flowing from the decisions we have discussed.

34. In view of the conclusion of ours, it is unnecessary to consider whether the Explanation to section 271(1)(c) of the Act introduced with effect from April 1, 1964, is attracted or not to the facts of this case. Consequently, we answer the question referred to this court in the negative and against the assessee. Since the Tribunal held that the asses-see was not liable to penalty at all, it did not go into the quantum of the penalty and in view of our present decision the Tribunal will have now to go into the quantum of penalty. There will be no order as to costs.

35. The assessee was not represented before us and, therefore, we requested Mr. S.V Subramaniam, Advocate, to assist us as amicus curiae and he has drawn our attention to all the relevant decisions bearing on the question in issue and we record our appreciation of the assistance rendered by him.