JUDGMENT Rajes Kumar, J.
1. At the instance of the assessee, the Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal") has referred the following question of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as " Acf) relating to the assessment years 1983-84 to 1987-88 for opinion to this Court.
"Whether on the facts and in the circumstances of the case, the Tribunal was right in law to hold that penalty under Section 271(1)(c) was chargeable in the case of the assessee in respect of excess claim of interest made by the assessee notwithstanding the fact that the assessee has subsequently volunteered the information cooperated with the Department?"
2. For the assessment year 1983-84, the following additional question has also been referred for opinion to this Court:-
"Whether on the facts and in the circumstances of the case, the Tribunal was right in law to uphold the penalty in regard to sum of Rs. 10,22,770/- being the amount remitted by the Bank on the basis of compromise decree granted during the relevant assessment year notwithstanding the fact that the decree was satisfied in a subsequent assessment year?".
3. At the instance of the Revenue, the Tribunal has also referred the following question for the assessment years 1983-84 to 1987-88 for opinion to this Court:-
"Whether on the facts and in the circumstances of the case, the Tribunal was right in law to hold that assessee was not liable to penalty in regard to the excess claim of interest made on the basis of misunderstanding of the decree relating to the payment of interest on defaulted payments?"
4. The brief facts of the case are as follows:-
The assessee is a registered Finn. In 1974, it had purchased a hotel for which money had been borrowed from Citi Bank. The assessee having failed to fulfill the commitments made to the Citi Bank for repayment of the loan, a suit had been filed by the Bank in the year 1978 for the recovery of the dues. On the basis of the compromise between the assessee and Citi Bank, a consent decree was passed by the first Additional Civil Judge, Agra on 30.4.1982, in Suit No. 293 of 1978 for a sum of Rs. 42,45,487/- as against the liability of Rs. 52,07,872.15 as shown in the books of accounts of the assessee. As per the said decree assessee was to make the payment of Rs. 39,60,000/- by 15th November, 1984 and if the payments were made by the assessee in time as referred to above, the decree for a sum of Rs. 42,45,477/- would stand satisfied. In the event of assessee's failure to pay any of the installments as stipulated in the decree by the dates up to 31st July, 1982 or if the assessee defaulted twice to pay instalments from August 1982 onwards, the concession of Rs. 2,85,477/- would not be available to the assessee and the entire decreed amount would become immediately due with interest @ 16% p. a. Though the assessee paid some amounts from time to time towards the satisfaction of the decree, the entire amount of Rs. 39,60,000/- agreed to be paid to the bank was not paid by 15th November, 1984. A sum of Rs. 26,06,000/- was in fact paid till end of November, 1984 as against Rs. 39,60,000/- that was required to be paid. The assessee liquidated the entire amount by November, 1987. Apart from decreed amount, a sum of Rs. 3 Lakh was collected by the Bank on account of interest on defaulted payments.
5. Though, there was a compromise between the assessee and Citi Bank, the assessee did not pass any entries in the books of account reflecting the waiver of Rs. 10,22,770/- in the assessment year 1983-84. On the contrary, it had provided interest in respect of the entire outstanding and also provided for penal interest @ 16% in respect of the decreed amount. For the assessment years 1983-84 to 1987-88, it had returned originally on the basis of the books of account maintained by it in which the claim of interest was provided as mentioned above. The Assessing Officer had completed the assessments for the assessment years 1983-84, 1984-85 and 1985-86 and the claim made by the assessee had been allowed. For the assessment years 1986-87 and 1987-88, it had filed a revised return on 13.5.1988. In the revised return the interest provided in respect of the sum of Rs. 52,07,873.15 was omitted and the claim limited to the interest @ 16% on the unpaid instalments of the decreed amount. For the assessment years 1984-85 and 1985-86 at the time of giving appeal effect to the appellate orders, it had requested the Assessing Officer to include the interest wrongly claimed by it in respect of the outstanding amount of Rs. 52,07,873.15. Though, the Assessing Officer had originally included the amounts as assessable for the assessment years 1984-85 and 1985-86, while giving effect to the appellate orders, he added the interest as offered by the assessee. The CIT (Admin.) exercising the powers under Section 263 of the Act had set aside those orders as being erroneous and pre-judicial to the interest of Revenue. For assessment year 1988-89, the assessee had filed the returns on the basis of the revised computation of interest. For assessment year 1989-90, the assessee filed the return on 31st October, 1989. A sum of Rs. 16,58,101/- was shown in the profit and loss account on the credit side. In the financial notes annexed to the balance sheet in Schedule 'K' the Chartered Accountant in para 5 had mentioned that the Firm had availed loans from Citi Bank and the Bank had filed a suit for recovery as a result of which a settlement was reached during this year (i.e. financial year 1988-89) which has resulted in certain credits and the same have been treated as given in that paragraph. The Assessing Officer reopened the assessment for assessment years 1983-84,1984-85 and 1985-86 by issue of notice under Section 148. The assessee filed the returns for assessment year 1983-84, in which a sum of Rs. 10,22,770/- was shown as excess interest credited to the Citi Bank as on 30th April, 1982 and Rs. 7,11,894/- as excess interest credited to the same Bank as on 31st August, 1982. Thus, the sum of Rs. 17,34,664.23 on account of interest was offered to tax in the return filed in response to notice under Section 148. The Assessing fficer completed the assessment for the assessment year 1983-84 on an income of Rs. 14,52,846/-. Out of the claim of interest of Rs. 1,06,663/-, the Assessing Officer made a disallowance of Rs. 98,054/-. The disallowance of interest was on the basis that the interest payable to the Citi Bank @ 16% as per the decree was on the defaulted instalements whereas the assessee had claimed interest on the entire outstanding amount. Similarly for the assessement years 1984-85 and 1985-86 excess interest claimed by the assessee earlier was offered to tax. The claim of interest in the returns filed in response to notice under Section 148 was restricted to the interest on the outstanding decreed amount. The Assessing Officer allowed the claim of interest on defaulted instalements only. The matter went in appeal upto the level of the Tribunal and the latter vide order dated 16th December, 1994 in ITA Nos. 7149 to 7159/Del/91 for the assessment years 1983-84 to 1988-89 has confirmed the disallowance.
6. The Assessing Officer initiated penalty proceedings for the concealment of income and furnishing of inaccurate particulars and imposed penalty as under :-
8. The assessee appealed to the Tribunal and it was claimed that it had provided interest in the books of account as according to their understanding, the compromise with the bank wouldget finalized only as and when the entire amount was liquidated and the security realised. It was further claimed that the Bank loan had been liquidated in November, 1987 and it had voluntarily disclosed the interest and cooperated with the Department in assessing the income. It has also been pointed out that for the assessment years 1986-87 and 1987-88 since the assessments were pending it had filed revised returns offering the excess interest claimed for the assessment. It was further pointed out that for the assessment years 1983-84 to 1986-87 though assessment stood completed, it had offered full cooperation for bringing the amount to tax immediately after the decree was satisfied. There had been a raid in the premises of the assessee. A file of the Citi Bank had been seized by the Revenue and that the copy of the decree had been filed before the Assessing Officer during the assessment proceedings for the assessment year 1986-87. These factors, according to it, would establish its bonafides.
9. The Tribunal has allowed the appeal in part. It was held by the Tribunal that admittedly the assessee had made wrong claims in the original returns for the assessment years 1983-84 to 1987-88. However, information regarding the compromise decree had been given by the assessee voluntarily to the Department without detection by the Assessing Officer notwithstanding the search made on 30' March, 1984 at the premises of the assessee. On these facts, the Tribunal proceeded to consider as to whether the assessee was guilty of having concealed the income in the original returns. On consideration of evidence on record, the Tribunal came to the conclusion that there was no material on record to hold that omission of Rs. 10,22,770/- being the amount remitted by the Bank out of the outstanding and a wrong claim of Rs. 7,11,894/- made by the assessee in the original return was for bonafide reasons. It was accordingly held that the assessee was liable to penalty under Section 271(1)(c) in respect of these two claims. The Tribunal, however, was of the view that no penalty could be imposed in regard to sum of Rs. 98,054/- being the interest disallowed by the Assessing Officer on the decreetal amount. The assessee had provided interest in the books of accounts on the basis of entire outstanding out of decreetal amount. The Assessing Officer, however, allowed a deduction in respect of defaulted instalments and not on the basis of entire outstandings. The Tribunal came to the conclusion that there was a basis for a doubt in this regard when the contents of the decree passed on 30th April, 1982, are taken into account. Giving the benefit of doubt to it on the basis of possible misinterpretation of the decree, the Tribunal deleted the penalty relating to the sum of Rs. 98,054/- for the assessment year 1983-84. The Assessing Officer had imposed a penalty @ 200% which is the maximum provided under Section 271(1)(c) of the Act. Considering the facts and circumstances of the case and the conduct of the assessee, the Tribunal was of the view that penalty @ 100% only would be warranted.
10. Similarly for the subsequent assessment years also, the Tribunal found that the assessee had made excess claim of interest. In regard to the excess claim made on the basis of misunderstanding of the decree, the Tribunal deleted the penalty. However, in respect of the wrong claim made by the assessee, the penalty @ 100% has been confirmed.
11. It would be better to refer the findings recorded by the Tribunal which are as follows:-
We have given our careful consideration to the rival contentions. In this case, assessee had filed the original returns for the assessment years 1983-84 to 1987-88 claiming interest on the outstandings of Rs. 52,07,873/- notwithstanding a compromise decree passed on 30th April, 1982 as a result of which, the liability of the assessee had been reduced to Rs. 42,45,277/- with a scope for further reduction to theextent of Rs. 2,85,477/- It is a matter of record that the assessee had not disclosed the fact of having reached to a settlement with Citi Bank either in the books of accounts or in the statement of accounts filed alongwith the returns. Nor was the copy of the decree provided to the Assessing Officer. During the course of assessment proceedings for the assessment years 1983-84, 1984-85 and 1985-86, through there was a search on 30th March, 1984 at the premises of the assessee, there is no evidence on record that the fact of compromise decree had come to the knowledge of the Assessing Officer. We may hasten to add that even if the compromise decree would have been available in the records of the assessee at the time of search, the fact remains that assessee did not disclose to the Assessing Officer that terms of the compromise and the decree passed by the Court in respect of the Citi Bank loan. Assessee had claimed before the CIT (A) that a note had been appended in the return of income for assessment year 1983-84 giving the particulars of the decree but we find that such a lnote was given only in the return filed in pursuance to notice under Section 148 and not alongwith the original return. We have also found that assessee during the course of assessment proceedings for assessment year 1986-87 did furnish a copy of the compromise decree and also revised the return and offered the excess claim but for the interest amount of the outstanding decreetal amount, to tax. Assessment for assessment year 1986-87 has been made by the Assessing Officer on the basis of the revised return.Similar is the position for assessment year 1987-88. Assessee had revised the return for that year too and given up the claim of interest in respect of the sum of Rs. 52,07,873/-. The claim of interest on theentire outstandings out of the decreetal amount of Rs. 42,45,477/-was however persisted. The return for assessment year 1989-90 was filed on 31 st-October, 1989. Whereas the revised return for assessment year 1986-87 was filed on 13th May, 1988, it is mentioned in the assessment order for assessment year 1986-87 that assessee had given reasons for revising the return and that a copy of the consent decree was also enclosed. The reasons given in the revised return are reproduced here under:
"Due to certain error and oversight interest was charged at a higher figure instead of the amount settled with the bank in theconsent decree dated 30.4.1982. As per revised computatics interest at the rate of 16% p. a. calculated on product basis with quarterly rests comes to Rs. 4,43,276/-thereby leaving a surplus of Rs. 3,01,724/- being interest excess provided. The return is now revised by reducing the interest provided earlier by Rs. 3,01,724/- to loss of Rs. 1,62,693/-. A copy of consent decree is also enclosed."
From the facts stated above, one fact gets established that though the assessee hadmade wrong claims in the original returns for the assessment years 1983-84 to 1987-88, the information regarding the compromise decree was given by the assessee voluntarily without any detection by the Assessing Officer notwithstanding the search on 30th March, 1984 at the premises of the assessee. On these facts, we are called upon to decide as to whehther the assessee is guilty of having concealed the income or having furnished inaccurate particulars of income in the original returns. Section 139(1) makes it obligatory upon the assessee to furnish return of income giving true and full particulars of the income. Section 139(5) enables the assessee to file a revised return in case assessee discovers any omission or any wrong statement in the original return within a specified period. For assessment years 1983-84 to 1985-86 no such returns were filed and assessments were completed on the basis of original returns. For these three years assessee had made a wrong claim as unsder.
For the assessment year 1983-84, though there was a compromise between the assessee and the Citi Bank as a result of which, the liability of the assessee got reduced by a sum of Rs. 10,22,770/-, assessee did not offer this amount to tax under Section 41 of the Act. Not only this, the assessee provided interest in respect of the entire amount of Rs. 52,07,873/- and claimed it as a deduction. No satisfactory explanation has beengiven for this omission in the original return of income. The explanation of the assessee is that the decree was subject to certain condition and the same would be satisfied only on liquidation of the entire loss. This explanation is not convincing. We have got a copy of the decree and do not find any provision under which the waiver of Rs. 10,22,770/- could get revived under any circumstances. The sum of Rs. 42,45,477/- had been determined as the sum payable by the assessee. Assessee was required tomake payments in a phased manner and in the event of default, the Citi Bank had the option to demand the entire decreetal amount outstanding in lumpsum and interest @ 16%. There was no way the Bank could demand the difference between Rs. 52,07,873/- being the amount outstanding at on 30th April, 1982 as per books of account of the assessee and the amount of Rs. 42,45,477/- the amount determined by the Court as the decreetal amount under any circumstances.
We may point out that though the assessee has cooperated with the Department and has volunteered the information during the course of assessment proceedings for the assessment year 1986-87 yet one cannot undermine the importance of disclosing the income in the original return. The penalty has been imposed for concealment of income in the original return. For the assessment years 1983-84 to 1985-86, assessments had been completed and income had escaped assessment. The disclosure of income by the assessee voluntarily does not necessarily absolve the assessee from imposition of penalty. The imposition of penalty and waiver of penalty under Section 273A are two separate proceeding. Whereas in law penalty is imposable for assessee's failure to disclose the correct income in the return of income and if subsequently assessee voluntarily disclosed the income pays the taxes and cooperates with the Department,, a case might be made out for waiver of the penalty but that is a matter to be considered by the administrative authorities. In penalty proceedings the issue that weight heavily is as to whether assessee had consciously concealed the income or furnished inaccurate particulars of income at the time of filing the original returns. Once a finding is recorded that the assessee had failed to disclose the income in the original assessment consciously, assessee would be liable to penalty notwithstanding the fact that he has later on volunteered the information and cooperated with the Department in getting the amount assessed to tax. His subsequent conduct, as already stated, would be relevant for waiver of penalty. But in so far as the assessee as per out finding had failed to disclose the true income in its original return for the assessment year 1983-84, they are liable to penalty under Section 271(1)(c). We are, therefore, satisfied that the assessee is liable to penalty in respect of Rs. 10,22,770/- for the assessment year 1983-84. We also dod not see any justification for the assessee to have claimed interest in respect of the entire amount of Rs. 52,07,873/-. The said interest was not payable at all in view of the compromise decree. The assessee has itself surrendered the amount of Rs. 7,11,894/- being the excess interest claimed in the original return. No doubt assessee had volunteered the information during the course of assessment proceedings for the assessment year 1986-87 yet as already observed that is not sufficient for absolving the assessee from liability of the penalty. Assessee may commit a bonafide mistake in the original return and may subsequently rectify that mistake by filing a revised return or by giving information to the Assessing Officer relating to such mistake or omission. If the mistake or omission is bonafide, penalty may not be attracted. However, the burden in this regard is upon the assessee to establish that the mistake oromission in the original return was botiafide. Considering the material on record, we are unable to hold that the omission of Rs. 10,22,770/- and a wrong claim of Rs. 7,11,894/- in the original return was for bonafide reasons. In the absence of any satisfactory explanation or material available on record supporting the claim of the assessee, we are of the view that penalty under Section 271(1)(c) is attracted in respect of the above two amounts. There is, however, no justification for sustaining the penalty in respectof Rs. 98,054/- being the interest disallowed by the Assessing Officer on the decreetal amount. Assessee had provided interest on the basis of entire outstandings out of decreetal amount. The Assessing Officer, however, allowed a deduction in respect of defaulted instalments and not on the basis of entire outstandings. There is a basis for doubt, if we go to the comments of the decree passed on 30th April, 1982. Para 1 of the decree provides as under:-
"The dependants do hereby acknowledge their liability to the plaintiff in the sum of Rs. 42,45,477/- being the outstanding in their loan account as on April 30, 1982. The dependants further acknowledge their liability to pay interest on the saidamount at the rate of 16% p. a. with effect from the date hereof. Accordingly afinal mortgaged decree in respect of."
At page 4 of the order, the decree provided as under:-
"On the defendants finding to pay to the plaintiff any of the instalments over April, 1982 to July, 1982 or defected twice in making the payments of the monthly instalements starting August, 1982 within 30 days from the due date stipulated herein together with interest thereon ( i.e. on the up paid instalements) calculated at 16% p. a. from thedue date till the date of payment, the entire amount of the decretion then outstanding shall become immediately, due and payable to the plaintiff as the plaintiff shall be entitled to take steps in court for the sale of the said mortgaged properties and the sale of the said properties and the mortgage decree shall then not be held in abeyance. The plaintiff shall also be entitled in that event to execute the decree personally against the defendants 1 to 5 who shall be jointly and severally liable lunder the decree.
The penalty in respect of Rs. 98,054/- is thus not justified where the benefit of doubt given to the assesseee. The penalty in respect of the sum of Rs. 98,054/- is accordingly deleted."
The Assessing Officer has imposed the penalty at 200%. The CIT (A) has directed to calculate the penalty @ 150%. Conmsidering the fact that the assessee had given the information voluntarily during the assessment and Assessing Officer had not detected any concealment during the course of assessment proceedings for assessment year 1986-87, the penalty at the minimum imposable would be justified. We accordingly direct the Assessing Officer to calculate the penalty @ 100% only.
For the assessment year 1984-85 also assessee had made excess claim of interest on thebasis of outstandings of Rs. 52,07,873.15. Assessee had surrendered a sum of Rs. 2,60,472/- at the time of filing of the return in response to notice under Section 148. In fact this amount was offered for taxation to the Assessing Officer even prior to the notice issued under Section 148. The Assessing Officer had made further disallowance of Rs. 4,42,114/-. The disallowance of Rs. 4,42,114/- on account of interest on the basis of the entire decreetal amount outstanding and not on the basis of the defaulted instalments has been confirmed by the Tribunal. For the reasons given in regard to assessment year 1983-84 as above, the assessee shall be liable to penalty in respect of sum of Rs. 2,60,742/-. However, with regard to the sum of Rs. 4,42,114/- the facts are paramateria the same as for assessment year 1983-84. For that year we have held that penaltyin respect of similar claim would not be attracted. We accordingly direct the Assessing Officer to recalculate the penalty @ 100% in respect of Rs. 2,60,742/- only. The Assessing Officer has calculated the penalty on the basis of difference between the returned income and finally assessed income. We have allowed some relief to the assessee in the quantum appeal. The Assessing Officer while recalculating the penalty shall take into account the finally assessed income and exclude from that the sum of Rs. 4,42,114/- in respect of which, we have held lthat penalty is not liable. The penalty shall be calculated @ 100% in accordance with law.
For the assessment year 1985-86, assessee had originally returned loss of Rs. 2,43,410/-. This was assessed at Rs. 3,39,356/-. Assessee had claimed interest of Rs. 6,99,637/- in the original return. However, later on the sum of Rs. 2,21,300/- was surrendered by the assessee out of the said claim. The Assessing Officer worked out the interest on the basis of compromise decree at Rs. 1,40,135/-.. The difference of Rs. 3,38,194/- was disallowed. For the reasons as given for assessment year 1983-84, assessee in our view, will not be liable to penalty in respect of sum of Rs. 3,38,194/-. As a result of quantum appeal, assessee's income would further get reduced. The Assessing Officer shall recalculate the penalty @ 100% after excluding a sum of Rs. 3,38,194/-.
For the assessment years 1986-87 and 1987-88, assessments have been made by the Assessing Officer on the basis of the revised returns. Assessee had undisputedly made excess claim in the original returns. Filing of the revised return does not absolve the assessee from liability of the penalty unless assessee establishes that, there was a bonafide mistake or omission in the original return. This view is supported by the decision of the Gauhati High Court in thecase of P.C. Aggarwal v. CIT (1976), 102 ITR 408. In this case, it was held on the basis of material on record that the revised returns were merely the result of inadvertent mistakes or omissions. In that case, the Tribunal had come to the conclusion that the assessee had submitted inaccurate particulars of his income while filing the original returned. This decision of the Gauhati High Court has been confirmed by the Hon'ble Supreme Court in the case of G.C. Aggarwal v. CIT (1990) 186 ITR, 571.
Since in this case, assessee has failed to explain satisfactorily as to how a wrong claim was made lin the original returns by taking the outstandings of Rs. 52,07,873/-as on 30lh April, 1982 as against the decreetal amount of Rs. 45,477/-, we are of the view that provisions of Section 271(1)(c) are attracted notwithstanding that Assessing Officer had failed to detect the concealment. The assessee was, however, not liable to penalty in respect of lsum of Rs. 2,71,689/- for 1986 and in respect of Rs. 2,82,753/- for the assessment year 1987-88. The Assessing Officer is directed to recalculate the penalty @ 100% on the basis of finally assessed income after enclosing the provisional assessment..
12. We have heard Sri S. D. Singh, learned Counsel for the assessee and Sri Shambhu Chopra, learned Standing Counsel for the Revenue.
13. Learned Counsel for the assessee submitted that the assessee has made entries in the books of account relating to the interest as per its own understanding and without any detection, voluntarily informed the Department about the compromise decree and submitted interest canned in excess for assessment. Thus, it is a case of bonafide on behalf of the assessee and therefore, penalty is not exigible. In support of his contention, he relied upon the decision of Apex Court in the case of K.C. Builders and Anr. v. Asstt. Commissioner of Income Tax reported in 265 ITR page 562 and the decision of this Court in the case of C.I.T. v. Smt. Shashi Agarwal and Ors. reported in 272 ITR page 36.
14. Learned Standing Counsel relied upon the order of the Assessing Officer and further submitted that in the present case, the assessee though aware about the compromise decree still had made a wrong entry in the books of account and claimed excess interest. He submitted that merely because subsequently the assessee has informed about the compromise decree to the Department voluntarily it does not absolve the assessee from penalty as it had concealed the income by claiming wrong deduction in the returns and original assessment proceeding and even it had not disclosed anything about the decree during the course of assessment proceedings. He further submitted that the conduct of the assessee has to be examined at the stage of filing of original return and subsequent conduct is wholly irrelevant. He submitted that the Tribunal on the facts and circumstances of the case has recorded the categorical findings that the action of the assessee was not bonafide and in fact, income has been knowingly concealed. The finding of the Tribunal is the finding of fact and does not require any interference.
15. We have given our anxious consideration to the submissions made by the learned Counsel for the parties and perused the order of Tribunal and the authorities below. Section 271(1)(c) of the Act as it stood at the relevant time reads as follows:-
Section 271(1) - If the Income Tax Officer or theAppellate Assistant Commissioner or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person-
(a)....
(b)....
(c) has concealed theparticulars of his income or furnished inaccurate particulars of such income.
16. By Section 40 of the Finance Act, 1964, the word 'deliberately" was omitted from Section 271(1)(c). The provisions of Section 271(1)(c) has been considered by the Apex Court in the case of K. C. Builders and Anr. v. Asstt. Commissioner of Income Tax (supra), Apex Court observed as follows:-
"One of the amendments made to the abovementiond provisions is the omission of the word "deliberately" from the expression "deliberately furnished inaccurate particulars of such income". It is implicit in the word "concealed" that there has been deliberate Act on the part of the assessee. The meaning of the word "concealment" as found in the Shorter Oxford English Dictionary, third edition, Volume 1, is as follows:-
" In law, the intentional suppression of truth orfact known, to the injury or prejudice of another."
The word "concealment" inherently earned with it the element of mens tea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if it takes out the case from the purview of non-diclosed, it cannot by itself take outhe case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax therein. In order that a penalty under Section 271(1)(iii) may be imposed, it has to be proved that the assessee has consciously made the conealment or furnished inaccurate particulars of his income."
17. Now it has to be examined that whether for the years under consideration, there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or or conceal the income so as to avoid the imposition of tax therein. In the assessment years 1983-84, 1984-85 and 1985-86 inspite of the consent decree being passed by First Additional Civil Judge, Agra on 30.4.1982 in Suit No. 293 of 1978 reducing the liability from Rs. 52,07,872.15 to Rs. 42,45,487/-, the assessee, in its books of account, had provided interest in respect of entire outstanding amount of Rs. 52,07,873.15 and also provided for penal interest @ 16% in respect of the decreed amount. There appears to be no reason that when the order was passed by the First Additional Civil Judge, Agra on 30.4.1982 why such an entry was made in the books of account and the claim of higher interest was made, though, it was not legally due. This act of the assessee can not be said to be un intentional or unconscious act. In the returns filed for the assessment years 1983-84, 1984-85 and 1985-86, reference of decree passed by the First Additional Civil Judge, Agra was not made. Even during the course of assessment proceedings, the said decree was not brought to the notice of the Assessing Authority which resulted in the allowance of excess amount of the interest. Thus, though, the decree was in existence before filing of the return and during the course of assessment proceedings still higher interest had been claimed on the entire outstanding amount and the decree has not been brought to the notice of the Assessing Authority, amounts to consciously claiming of the excess interest and furnishing of inaccurate particulars. Subsequent disclosure of the decree and request to include excess interest wrongly claimed at the stage when the Assessing Authority was giving effect of the Appellate order, does not make any difference. It may be a circumstance which leads the assessee to disclose the correct fact and to offer to tax excess amount of interest claimed. Subsequent offer by the assessee to tax the excess interest claimed and allowed and cooperation in the assessment proceeding would not make any difference to the act of the assessee which had already been committed while filing the return by claiming excess deduction of interest and concealing the fact of the decree, though, before filing the return, the decree was in existence. It is not the case of the assessee that the decree was not in its knowledge and it could not be, because entry of penal interest @ 16% was made on the decreed amount but it is surprising that the interest had been provided on the entire outstanding amount of Rs. 52,07,873-15. The explanation of the assessee was that the decree was subject to certain condition and the same would be satisfied only on liquidation of the entire loan is found unconvincing and worthless. The Tribunal has observed that "the decree do not find any provision under which waiver of Rs. 10,22,770/- could get revived under any circumstances. The sum of Rs. 42,45,477/- had been determined as the sum payable by the assessee. Assessee was required to make payments in a phased manner and in the event of default, the Citi Bank had the option to demand the entire decreetal amount outstanding in lumpsum and interest @ 16%. There was no way the Bank ' could demand the difference between Rs. 52,07,873/- being the amount outstanding at on 30th April, 1982 as per books of account of the assessee and the amount of Rs. 42,45,477/- the amount determined by the Court as the decreetal amount under any circumstances." Thus for these three years, we are of theopinion that there was a case of intentional and conscious concealment of income and furnishing of inaccurate particulars of income. In the circumstances, for the assessment years 1983-84, 1984-85 and 1985-86 levy of penalty is upheld.
18. So far as the assessment years 1986-87 and 1987-88 are concerned, we find that the levy of penalty is not justified. For these two years, during the course of assessment proceeding, the assessee had voluntarily filed the revised return offering the interest claimed in the original return. There is no material that the revised return was filed after detection of the excess amount claimed by the assessee. The Assessing Authority has also completed the assessment on the basis of the revised return. In the circumstances, for these years, it can not be said that there was conscious concealment of income.
19. So far as, question raised by the Revenue, is concerned, Tribunal has dealt with the issue in details and we do not find any error in it.
20. In view of the foregoing discussions, question for the assessment years 1983-84, 1984-85 and 1985-86 referred at the instance of assessee and the additional question for the assessment year 1983-84 are answered in affirmative, i.e., in favour of the Revenue and against the assessee. But for the assessment years 1986-87 and 1987-88 question referred above at the instance of the assessee, is answered in negative, i.e., in favour of the assessee and against the Revenue. Question referred at the instance of the Revenue is answered in affirmative, i.e., in favour of the assessee and against the Revenue. In view of the divided success, the parties are left to bear their own costs.