1. MAK Data P. Ltd. versus Commissioner of Income Tax-II, SLP(Civil) No. 18389 of 2013, Date of Order : 30.10.2013, Supreme Court of India.

Under Explanation 1 to s. 271(1)(c), Voluntary disclosure of concealed income does not absolve assessee of s. 271(1)(c) penalty if the assessee fails to offer an explanation which is bona fide and proves that all the material facts have been disclosed

Held

(i)            The AO shall not be carried away by the plea of the assessee like “voluntary disclosure”, “buy peace”, “avoid litigation”, “amicable settlement”, etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to s. 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence.

(ii)           The assessee has only stated that he had surrendered the additional sum of Rs.40.74 lakhs with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. The statute does not recognize those types of defences under Explanation 1 to s. 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty.

(iii)          It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings u/s 271 read with s. 274 of the Act;

(iv)        The AO has to satisfy himself whether penalty proceedings be initiated or not during the course of the assessment proceedings. He is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of s. 271(1)(c) has also been elaborately discussed by the Supreme Court in UOI vs. Dharmendra Textile Processors 306 ITR 277 (SC) and CIT vs. Atul Mohan Bindal 317 ITR 1 (SC). The principle laid down by this Court has been correctly followed by the Revenue and there is no illegality in the department initiating penalty proceedings in the instant case.

2. Bharat Petroleum Corporation Limited versus Income Tax Appellate Tribunal, W.P.NO.1740 OF 2013, Date of Order : 20.09.2013, Mumbai High Court.

Tribunal has no power to dismiss appeal for non-appearance of appellant. It has to deal with the merits. An application for recall of an ex-parte dismissal order is under s. 254(2) & must be filed within 4 years from the date of the order. The Tribunal must permit “mentioning” of matters

(1) Under Rule 24, the Tribunal has no power to dismiss an appeal for non-appearance of the assessee. It has to decide the appeal on merits. The dismissal order is consequently erroneous and the assessee is entitled to have the order set aside (S. Chenniappa Mudaliar 74 ITR 41 (SC) followed; Chemipol (244) ELT 497 (Bom) distinguished);

(2) However, because dismissing an appeal for non-prosecution in the face of Rule 24 is an error apparent on the face of the record, an application to set right the error of dismissal for non-prosecution is an application u/s 254(2) and not under s. 254(1). Where Parliament has provided a specific provision to deal with a particular situation, it is not open to ignore the same and apply some other provision. Such an application has to be filed within a period of 4 years from the date of the order;

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2. Hatkesh Co.op. Hsg. Soc. Ltd. versus Asst. CIT, Circle 21(1), Appeal No. 494/Mum/2011, Date of Order : 04.09.2013, ITAT Mumbai

A Co-op Hsg Society is not a mutual association because its members can earn income from its property. The transfer fee and TDR premium charged by the Society from its members is a commercial transaction and not eligible for exemption on grounds of mutuality

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