Commissioner of Income Tax vs Dr. R. Gopalakrishnan

M.M. Sundresh, J.—The Revenue has come forward with this appeal challenging the order dt. 4th Dec., 2009 passed by the Tribunal, Chennai ''C'' Bench in ITA No. 203/Mad/2009 by formulating the following substantial question of law:

Whether on the facts and in the circumstances of the case, the Tribunal was right in canceling the penalty levied on the Assessee u/s 271(1)(c) holding that the revised return admitting a total income of Rs. 1,07,90,517 as against the income of Rs. 24,50,811 disclosed in the original return was filed voluntarily ignoring the fact that the said revised return was filed only after the Department came into possession of the details of cash payments received by the Assessee from M/s Apollo Hospitals Ltd. towards professional fees not disclosed by the Assessee in the original return?

The brief facts required are as follows:

(i) The Assessee is an orthopedic surgeon. The Revenue unearthed certain documents from M/s Apollo Hospitals Ltd. From the aforesaid documents, it was found out that the payments made by the hospital in favour of the Assessee have not been taxed. Therefore, based upon the same, a summons was issued to the Assessee by the AO.

(ii) In the meanwhile, the Assessee filed a revised return u/s 139(5) of the IT Act on 9th March, 2006. On the basis of the revised return, the assessment was completed u/s 143(3) of the IT Act on the total income of Rs. 1,07,90,517. The AO has initiated penalty proceedings u/s 271(1)(c) of the IT Act on the ground that the revised return filed by the Assessee would amount to willful suppression and concealment of the income.

(iii) Challenging the said proceedings of the AO dt. 27th May, 2008 for the asst. yr. 2005-06, the Assessee filed an appeal before the CIT(A)-VI, who, by an order dt. 7th Jan., 2009 in IT Appeal No. 26 of 2008-09, confirmed the assessment order. However, the Assessee''s further appeal before the Tribunal has ended in his favour. Challenging the said order of the Tribunal, the Revenue has filed the present appeal.

Heard Mr. K. Subramaniam, learned senior standing Counsel appearing for the Appellant.

Mr. K. Subramaniam, learned senior standing Counsel has strenuously contended that the Assessee has filed the revised return on 9th March, 2006 only pursuant to the documents obtained from M/s Apollo Hospitals. Learned Counsel further submitted that in as much as revised return was filed on 9th March, 2006 after obtaining documents from M/s Apollo Hospital, it cannot be construed that the same has been filed voluntarily and hence the penalty is justified, since the Assessee has concealed this income.

It is seen from the records that the Assessee was never put on notice and there is nothing to suggest that he was aware of the documents obtained from M/s Apollo Hospitals. In order to fasten the penalty on the Assessee, there should be a specific finding that there is deliberate and willful suppression on the part of the Assessee. In other words, the revised return will have to be treated as voluntary one until the contrary is proved.

A reading of Section 139(5) would clearly show that if a person having filed the return already, discovers any omission or any wrong statement, he may furnish a revised return at any time before expiry of one year before the end of the relevant assessment year. Admittedly, the Assessee has filed the revised return within the time specified in the section. The appellate authority has relied upon the decision of the Hon''ble Supreme Court reported in the case of Union of India (UOI) and Others Vs. Dharamendra Textile Processors and Others, . The said judgment relied upon by the first appellate authority was clarified in the subsequent judgment by the Hon''ble Supreme Court in the decision reported in the case of Union of India v. Rajasthan Spinning and Weaving Mills (2009) 23 DTR (SC) 158 wherein it has been held that there has to be a specific finding that the non-disclosure of income is willful and deliberate. The said judgment of the Hon''ble apex Court was also followed in Commissioner of Central Excise, Pune Vs. SKF India Ltd., .

Considering the aforesaid judgment and also facts involved in the present case on hand, there is no material to hold that the suppression on the part of the Assessee is wilful and deliberate. We are of the opinion that the order passed by the Tribunal does not warrant any interference. Accordingly, the question of law is answered against the Revenue. The appeal is dismissed.