Case: Dilip N. Shroff Vs. Joint Commnr. Of Income Tax, Mumbai &amp;Anr

be a genuine difference of opinion between two experts. The District Valuer, as noticed hereinbefore, having regard to the sale instances of 1979 wherein the value of the land was fixed at Rs.500/- per sq. ft., took notice of the fact that the valuation in terms of another sale instance of 19.10.1982 wherein the land was valued at about Rs. 1823/- per sq. ft. A valuation was to be arrived at on 01.04.1981. He picked up a figure of Rs.897/- per sq. ft. No reason had been assigned in support thereof. No other or further sale instances had been given. We do not know as to whether any other sale instances were available. He merely stated that such valuation had been arrived at after taking into account the time size-shape, time gap, location-situation and also the factors like physical, social, legal and economical. Some other officer could have picked up holes in the said report. On the other hand, the opinion of the registered valuer, as would appear from the report, was that he had taken into consideration the value of the shop as Rs.1525/- per sq. ft. A duty may be enjoined on the assessee to make a correct disclosure of income but if such disclosure is based on the opinion of an expert, who is otherwise also a registered valuer having been appointed in terms of a statutory scheme, only because his opinion is not accepted or some other expert gives another opinion, the same by itself may not be sufficient for arriving at a conclusion that the assessee has furnished inaccurate particulars. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. The impugned order, therefore, suffers from non-application of mind. It was also bound to comply with the principles of natural justice. [See Malabar Industrial Co. Ltd. v. Commissioner of Income Tax, Kerala State, (2000) 2 SCC 718 ] 82. We have, however, noticed hereinbefore that the Income Tax Officer had merely held that the assessee is guilty of furnishing of inaccurate particulars and not of concealment of income; which finding was arrived at also by the Commissioner of Income Tax and the Income Tax Appellate Tribunal. 83. In K.C. Builders and Another v. Assistant Commissioner of Income Tax [(2004) 2 SCC 731] , this Court formulated the following questions for consideration :. "8. On the above pleadings and facts and circumstances of the case, the following questions of law arise for consideration by this Court:(a) Whether a penalty imposed under Section 271(1)(c) of the Income Tax Act and prosecution under Section 276-C of the Income Tax Act are simultaneous?(b) Whether the criminal prosecution gets quashed automatically when the Income Tax Appellate Tribunal which is the final court on the facts comes to the conclusion that there is no concealment of income, since no offence survives under the Income Tax Act thereafter?(c) Whether the High Court was justified in dismissing the criminal revision petition vide its impugned order ignoring the settled law as laid down by this Court that the finding of the Appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following the Income Tax Appellate Tribunals order no offence survives under the Income Tax Act and thus the quashing of the prosecution is automatic?(d) Whether the finding of the Income Tax Appellate Tribunal is binding upon the criminal court in view of the fact that the Chief Commissioner and the assessing officer who initiated the prosecution under Section 276-C(1) had no right to overrule the order of the Income Tax Appellate Tribunal? More so when the Income Tax Officer giving the effect to the order cancelled the penalty levied under Section 271(1)(c)?(e) Whether the High Courts order is liable to be set aside in view of the errors apparent on record? In K.C. Builders (supra), this Court noticed the dictionary meaning of the explanation and held: "4. The respondent assessing authority treated the difference between the income as per original return and revised income as concealed income. The Assistant Commissioner of Income Tax levied penalties under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for all the aforesaid four assessment years. Accordingly, penalty proceedings were initiated. The first appeal against the order of penalties levied for concealment of income against the appellants were confirmed by the CIT (Appeals). As per the directions of the Chief Commissioner of Income Tax, four complaints were filed in the Court of the Additional Chief Metropolitan Magistrate, Egmore, Chennai for offences under Sections 276-C(2), 277 and 278-B of the Act and Sections 120-B, 34, 193, 196 and 420 of the Indian Penal Code." 84. The learned Additional Solicitor General, however, submitted that although on the facts of the case the decision rendered is correct but the view of the court that unless there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable or the part of the assessee to conceal his income so as to evade income tax thereon may not correct. As at present advised, we do not intend to go into the said question; as in the facts and circumstances of the case, there are enough material to show that the action on the part of the appellant may not be said to be such which would attract the penal provision under Section 271(1)(c) of the Act. 85. For the reasons aforementioned, the

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]While considering as to whether the assessee has been able to discharge his burden, the assessing officer should not begin with the presumption that he isIncome Tax Officer had merely held that the assessee is guilty of furnishing of inaccurate particulars and not of concealment of income; which finding was arrived at also by the Commissioner of Income Tax and the Income Tax Appellateis of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not beenthe Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurateimpugned order, therefore, suffers from non-application of mind. It was also bound to comply with the principles of natural justice.