I.P. BANSAL, J.M. ORDER This is appeal filed by Revenue and is directed against order of CIT(A) dt. 29th July, 1 99 9 for asst. yr. 1 99 2-93. 2. Ground of appeal reads as under: "1. learned CIT(A) has erred in law and on facts in holding that penalty under s. 271(1)(c) was not leviable on amount of Rs. 8,70,941 being amount of cash sales of copper scrap." 3. return of income originally was filed at Rs. 4,94,458 on 23rd Oct., 1 99 2 which was processed under s. 143(1)(a) on 18th Dec., 1 99 2 accepting returned income. Notice under s. 143(2) was issued for first time on 12th Nov., 1 99 2 for 25th Nov., 1 99 2 on which date none appeared on behalf of assessee. second notice was issued on 30th Nov., 1 99 3 fixing date of hearing on 10th Dec., 1 99 3. assessee was required to submit GP rate with comparative figures of three years and from details AO found that GP rate for year under consideration was at 8.45 per cent as against 11.16 per cent of immediate preceding year. assessee was asked to explain steep fall in GP rate along with other information of monthwise purchase and sales. Certain other details were also called for and case was adjourned to 27th Dec., 1 99 3 on which date assessee did not furnish information as called for. Accordingly adjournment was granted on 6th Jan., 1 99 4. Thereafter chronology of fixed dates as described at p. 2 of assessment order is as under: Monthwise purchase and sales with date of On 6- delivering challans date of receipt of goods and closing 1-1 99 4 stock inventory with valuations. On 12- Complete details of purchases of January, 1 99 2 to 1-1 99 4 March, 1 99 2, billwise with date of delivery challan. On 19- Details of purchases furnished asked to attend on 25th 1-1 99 4 & Jan., 1 99 4 either Shri S.D. Shah or any other working 20-1-1 99 4 partner. 25-1-1 No partner attended asked to be present on 3rd Feb., 99 4 1 99 4 with books and bills. 3-2-1 None attended but filed revised return of income in 99 4 which sales of copper scrap of Rs. 8,70,941 declared. assessee in revised return appended following note which has been reproduced in assessment order as under : "During year, 7.771 kg. of copper scrap was purchased to use in castings manufactured. However, during course of testing it was found that it was not feasible to do so. In view of same it was decided to dispose off copper scrap. Since there were no buyers being available immediately and assessee being in need of funds cash sales was made to scrap dealers. While going through records it was found that cash so realized was left to be incorporated in books of accounts. Hence revised return of income is being filed." AO found that assessee was not dealer in copper scrap. Apparently raw material for assessee was mild steel and stainless steel scrap. As against this, AO found that assessee had purchased copper scraps as under: Name Rate Bill Quantity Date of & Value No. kgs. supplier Rs. Shah 112 16- 43 Mohanlal 3651.000 per kg. 1-92 Kajodimal 4,09,221 112 25- 45 -do- 4119.900 per kg., 1-92 4,61,729 According to AO assessee had furnished details of purchases after due pursuance and assessee also could not show any consumption of copper scraps or sale thereof and also did not show said copper scraps in its closing stock. AO observed that assessee was repeatedly asked about these purchases and consumption etc. of copper scraps and assessee instead of explaining nature of purchases and purpose of use of scrap, assessee filed revised return of income in which sales of copper scraps was disclosed and appended note stating that sale proceeds amounting to Rs. 8,70,941 were not recorded in regular books of accounts. For sake of convenience relevant observations of AO in this regard as appearing at pp. 3 & 4 of assessment order are reproduced below: "Apparently, purchase of copper scrap was not raw materials used by assessee nor assessee was dealing in scrap of copper. Further it was noticed that assessee could not show any consumption of copper scrap purchased by him nor it showed any sales thereof nor scrap of copper form part of closing stock shown by assessee. assessee was therefore repeatedly asked about these purchases and consumption etc. of copper scrap. Instead of explaining nature of purchases and purpose of use of scrap, assessee filed revised return of income in which sales of copper scrap was disclosed and appended note stating that sale proceeds amounting to Rs. 8,70,941 were not recorded in regular books of accounts. All these facts prove that assessee has not filed revised return of income voluntarily and on its own volition but same has been filed because Department persistently asked assessee to furnish details and as matter of fact came to concluding point that purchases of copper scrap were either inflated one or bogus purchases debited with intention to claim purchases at higher value and by that way reduce tax incidence on its real income. assessee s case is therefore covered under provisions of s. 271(1)(c) for concealing and furnishing inaccurate particulars of income. assessee cannot escape from penal provisions by way of filing of revised return as revised return cannot wipe out default already committed in original return. In view of these facts penalty under s. 271(1)(c) is leviable. notice under s. 274 r/w s. 271(1)(c) is separately sent." It is on very addition penalty under s. 271(1)(c) has been levied. In penalty order it has been mentioned that assessee avoided to furnish details of purchase and inspite of repeated reminder on each and every date of hearing and after due pursuance assessee has filed details of purchases which showed purchase of copper scraps. revised return was filed by assessee only because of reasons that Department had persistently asked to furnish details in respect of purchases and consumption of copper scraps. Therefore, revised return filed by assessee was not voluntary but by efforts of Department. It is, therefore, penalty has been levied. Before AO, assessee did not furnish any explanation but requested for keeping penalty proceedings in abeyance which request was declined to be accepted by AO and he imposed penalty @ 200 per cent. Matter was carried in appeal before CIT(A). It was explained before CIT(A) that assessee had furnished details of purchase on 19/20th Jan., 1 99 4 as per order sheet entry and it was explained that assessee was in need of funds and since there was no buyer available it had to sell scrap in market. By mistake cash realized was left out from being incorporated in books of account and once mistake was discovered by assessee, it filed revised return and disclosed sales of copper scraps and since disclosure made is voluntary and before detection made by AO, penalty has wrongly been imposed. Reliance was placed on following decisions: 1. J.P. Sharma & Sons vs. CIT (1985) 151 ITR 333 (Raj) 2. CIT vs. Sri Rajaram Cloth Stores (1 99 5) 214 ITR 262 (Mad) Considering these submissions, learned CIT(A) has deleted penalty as per para 11 of impugned order which is reproduced below for sake of convenience: "11. I have carefully considered submissions made before me. As regards addition of Rs. 8,70,941 same was disclosed by appellant by way of revised return filed during course of assessment proceedings. It is also seen from assessment order that AO had asked for details of purchase which were furnished on 19th Jan., 1 99 4/20th Jan., 1 99 4. There is nothing on record to show that detection of concealment had already been made by AO before filing of revised return. No show-cause notice was issued in respect of this amount by AO and merely because details of purchases and sales were held up for some time does not necessarily mean that detection has been made. details of purchase and sales are clearly made in routine manner and since revised return has been filed by appellant well before date of assessment there was no intention of any concealment of unrecorded sales. I hold that in event of revised return having filed by appellant on its own there can be no penalty on amount of Rs. 8,70,941." 4. Revenue is aggrieved with such deletion of penalty hence in appeal. 5. Learned Departmental Representative after narrating facts, pleaded that learned CIT(A) was wrong in arriving at conclusion that there was nothing on record to show that detection of concealment had already been made by AO before filing revised return by assessee. He contended that it has been recorded in assessment order as well as in penalty order that after repeated requests by Department assessee had filed details of sales and purchases and it was only when AO had already detected concealment assessee was cornered and thus filed revised return. He contended that amount of sale of scrap was not small amount which could escape attention of assessee so as to be entered in books of accounts. assessee knowingly and deliberately did not show sale, consumption or stock of copper scrap and when it was detected by Department assessee had filed revised return. Thus, he contended that findings of learned CIT(A) that since there was no intention of concealment with regard to unrecorded sales, assessee cannot be held liable for penalty are factually wrong. To support his contention he relied on following decisions: A. A.M. Shah & Company vs. CIT (1 99 8) 150 CTR (Guj) 1 : (1 99 9) 238 ITR 415 (Guj) to raise contention that any concealment or inaccuracy in particulars of income in return occurring at any stage upto and inclusive of t h e ultimate stage of working out of total income would attract penalty provisions of s. 271(1)(c); as assessee had clearly resorted to recording bogus purchases and non-recording of certain items either in sales or stocks there was concealment of particulars of income which attracts penalty under s. 271(1)(c). B. Yamuna Restaurant vs. CIT (1 99 3) 110 CTR (Guj) 195 : (1 99 3) 201 ITR 99 (Guj) to raise contention that where there is evidence on record to prove that there was understatement of income on account of suppression of sales Tribunal was held right in levying penalty under s. 271(1)(c). C. CIT vs. D.K.B. & Co. (2000) 161 CTR (Ker) 187 : (2000) 243 ITR 618 (Ker) to contend that there cannot be estoppel against statute and there is no principle of universal application that whenever assessment has been completed by accepting order of assessee, no penalty can be imposed. D. G.C. Agarwal vs. CIT (1 99 1) 95 CTR (SC) 257 : (1 99 ) 186 ITR 571 (SC) to contend that there being no satisfactory explanation for filing false original return and conditions necessary for application of explanation to s. 271(1)(c) existing qua original return explanation rightly invoked notwithstanding filing of revised return. E. Henry Isidore vs. CIT (1 99 7) 137 CTR (Mad) 410 : (1 99 7) 222 ITR 496 (Mad) to contend that items of income definitely omitted from original return constituted concealment and contention of assessee that books were seized by Department and income was returned on estimate basis as assessee could have sought time for final return and asked for inspection and taken extracts of books which was not done. In this case Hon ble Madras High Court has relied on its earlier decision namely CIT vs. S.S.K.G. Arthanariswamy Chettiar (1980) 19 CTR (Mad) 240 : (1982) 136 ITR 145 (Mad) in which it was held that offence of concealment is complete at time of filing in which it was held that offence of concealment is complete at time of filing of original return. 6 . As against these arguments of learned Departmental Representative, learned counsel appearing on behalf of assessee drew our attention towards chronology of dates as appearing at p. 2 of assessment order and reproduced in above part of this order. Referring to said chronology it was pleaded that assessee had furnished all details required for by AO. From details assessee came to know that it left to incorporate realized amount in respect of copper scraps in books of account. It was, therefore, on 3rd Feb., 1 99 4, assessee filed revised return declaring therein additional income of Rs. 8,70,941 being sale amount of copper scraps. Till that date assessee was not confronted with query of having omitted entry of any such sale in its books of accounts. No show-cause notice was issued till that date. In these circumstances it was vehemently pleaded that action of assessee of filing revised return should be considered voluntary and before detection by Revenue. Having declared income in revised return and acceptance of same, no penalty could have been imposed under s. 271(1)(c). To raise such contention, reliance was placed by learned counsel on following decisions: A. CIT vs. Suresh Chandra Mittal (2001) 170 CTR (SC) 182 : (2001) 251 ITR 9 (SC) to contend that where assessee surrendered additional income by way o f revised return after precise queries by AO and once revised return is regularized by Revenue, explanation of assessee, that he has declared additional income to buy peace and to avoid litigation could be treated as bona fide belief and penalty therefore, cannot be levied. B. CIT vs. Hasmukhlal Gandalal (2003) 184 CTR (Guj) 23 : (2003) 264 ITR 42 (Guj) to contend that where assessee has filed revised return before completion of assessment stating correct valuation of property as arrived at by approved valuer and both appellate authorities having come to conclusion that assessee had no intention to furnish inaccurate particulars, penalty of concealment cannot be levied. C. CIT vs. Milex Cable Industries (2003) 182 CTR (Guj) 442 : (2003) 261 ITR 675 (Guj) to contend that though assessee conceded total mistake which resulted in under-estimation only after he had received notice of AO pointing out mistake, Tribunal s conclusion that assessee had no intention of concealing particulars of his income or misguiding AO was acceptable and for that penalty was held rightly not leviable. D. K.C. Builders & Anr. vs. Asstt. CIT (2004) 186 CTR (SC) 721 : (2004) 265 ITR 562 (SC) to contend that mere omission of 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 omission was attributable to intention or desire on part of assessee to hide or conceal income so as to avoid imposition of tax thereon. E. Dahod Sahakari Kharid Vechan Sangh Ltd. vs. CIT (2006) 200 CTR (Guj) 265 : (2005) 149 Taxman 456 (Guj) in said case referring to decision in aforecited case of K.C. Builders & Anr. vs. Asstt. CIT (supra) their Lordships of Hon ble jurisdictional High Court have observed that where there is no mala fide intention or mens rea found by any of authorities, mere omission from return of income of item of receipt neither amounts to concealment nor deliberate furnishing of inaccurate particulars of income. Referring to these decisions it was pleaded that it was bona fide mistake of assessee and said mistake has been corrected by filing revised return. There is no material or evidence found by Department that in fact said amount of sale of copper scrap was concealed income of assessee. Therefore CIT(A) has rightly deleted penalty. 7 . Learned Departmental Representative in reply to argument of 7 . Learned Departmental Representative in reply to argument of learned Authorised Representative referred to decision of Hon ble Madras High Court in case of P. Govindaswami vs. CIT (2000) 244 ITR 510 (Mad) n d contended that there is no need for Department to prove that assessee had concealed income in respect of sale of copper scrap as assessee itself has admitted addition thereof. Referring to above decision he pleaded that according to s. 58 of Evidence Act admitted fact need not t all to be proved. Therefore, he pleaded that learned CIT(A) has wrongly deleted penalty. 8 . We have carefully considered rival submissions in light of material placed before us. As matter of fact assessee did not record sale amount of Rs. 8,70,941 in its books of account which was received by assessee on account of sale of copper scraps which was purchased by assessee during year under consideration. original return of income was filed by assessee without considering sale price of abovementioned copper scrap. During course of assessment proceedings when details of sales and purchases were required to be furnished by AO assessee submitted revised return which included sale price of copper scrap as income. reason given for filing revised return stated in note has been inscribed in para 3 of this order. In note it was mentioned that copper scrap was purchased for use in castings manufacture, however, during course of casting it was found that it was not feasible to do so. Thus it was decided to dispose of copper scraps. It is further mentioned that since there was no buyer available immediately and assessee was in need of funds, cash sales were made to scrap dealers and while going through records it was found that cash so realized was left to be incorporated in books of accounts, therefore, revised return is being filed before CIT(A) also it was explained that assessee was badly in need of funds and since there was no buyer available it had to sell scrap in market and by mistake cash realized was left out to be incorporated in books of account and once mistake was discovered by assessee it filed revised return and disclosed sales of copper scraps and since disclosure is voluntary and before detection made by AO, penalty has wrongly been imposed. 9 . Before proceeding further it will be relevant to examine Expln. 1 to s. 271(1)(c). "Explanation 1. Where in respect of any facts material to computation of total income of any person under this Act, (A) such person fails to offer explanation or offers explanation which is found by AO or CIT(A) or CIT to be false, or (B) such person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all facts relating to same and material to computation of his total income have been disclosed by him, then, amount added or disallowed in computing total income of such person as result thereof shall, for purposes of cl. (c) of this sub- section, be deemed to represent income in respect of which particulars have been concealed." plain statutory language of these two clauses i.e. (A) and (B) get referable to two separate and independent situations. first cl. (A) contemplates failure to offer explanation or offer of explanation which is found to be false. At other end, second situation covered by cl. (B) relates to position that assessee is not able to substantiate explanation offered by him. Thus it is quite clear that two situations are independent and separate. Initially consequence is provided in language of Expln. 1 it created what is known as "deeming situation". It would thus be seen that amount added or disallowed in above process of computation is deemed to represent income in respect of which particulars have been concealed. In other words addition of amount or otherwise disallowance of amount in computation of total income would assume deemed character of concealment by reason of Expln. 1. Therefore, statutory requirement of s. 271(1)(c) requires satisfaction of officer as regards concealment gets understood in light of above deeming situation. From fact it can be seen that assessee has offered explanation and, therefore, it has to be examined whether assessee is able to substantiate said explanation and whether he is able to prove that such explanation is bona fide that all facts relating to same and material to computation of income were disclosed. Thus in our view case of assessee will be covered by cl. (B) of Expln. 1. explanation of assessee before AO as well as CIT(A) was that copper scraps was purchased for use in casting manufacture. As regards this claim of assessee AO has found that assessee has never done copper casting and these were purchases made during year and no casting was done for copper. It was explained in note filed before AO that during course of testing it was found that it was not feasible to use copper scraps in casting. No evidence whatsoever has been produced by assessee to substantiate that any testing was done for casting of copper. next explanation of assessee is that it was in need of funds and due to non-availability of buyers copper scrap was sold in market by way of cash sales. No evidence has been filed to support such contention also and no evidence has been furnished to show that when these cash sales were made. It is also not explained that there was need of funds and how said need of funds was met with particularly when sale price of copper scrap was available with assessee as cash amount. amount of Rs. 8,70,941 is substantial sum. If amount was required for business needs of assessee then it is unlikely that assessee would not enter realized amount in its books of account. Moreover assessee concern is partnership concern, amount of Rs. 8,70,941 being substantial sum cannot escape attention of all partners to be entered in books of account. Rather it suggests that copper scrap was purchased by assessee with view to claim more expenses to reduce incidence of taxation and same was sold outside books of account and intention of assessee right from beginning was not to show or disclose sale price of copper scrap in books of account. Thus explanation given has not been substantiated at all by assessee and assessee failed to prove that explanation furnished by it was bona fide and facts relating to same and material to computation of its total income were disclosed. Therefore, in our opinion AO was right in considering sale price of copper scraps as deemed concealment of income. Now coming to case law relied upon by learned Authorised Representative of assessee. decision in case of CIT vs. Suresh Chanda Mittal (supra) will have no bearing on present case as it is not case of assessee that it declared additional income to buy peace or to avoid litigation. In present case assessee himself admitted that amount disclosed in revised return is income of assessee. decision in case of CIT vs. Hasmukhlal Gandalal (supra) has also no bearing to present case as in that case question related to valuation of property and both appellate authorities had concluded that assessee had no intention to furnish inaccurate particulars. decision in case of CIT vs. Milex Cable Industries (supra) also cannot be applied to facts of present case as in said case there was mistake in total which came to notice of assessee when it was pointed out by AO and it was conclusion of Tribunal that assessee had no intention to conceal particulars of its income. In case of K.C. Builders & Anr. vs. Asstt. CIT (supra) Hon ble Supreme Court has held that mere omission of item of receipt does neither amount to concealment nor furnishing of inaccurate particulars of income unless and until there is some evidence to show or circumstances found from which it can be gathered that omission was attributable to intention or desire on part of assessee to hide or conceal income so as to avoid imposition of tax thereon. However, in present case, as pointed out earlier there are circumstances from which it can be gathered that there was intention or desire on part of assessee to hide or conceal income so as to avoid imposition of tax. Similar is position is with decision of Hon ble Gujarat High Court in case of Dahod Sahakari Kharid Vechan Sangh Ltd. vs. CIT (supra) where their Lordships have followed aforecited decision of Hon ble Supreme Court in case of K.C. Builders & Anr. vs. Asstt. CIT (supra). 10. So far as it relates to contention of learned Authorised Representative that as revised return was filed before detection by Revenue, therefore, no penalty should be levied, we may observe that when assessee files revised return in fact it is admitted that original return was not correct and complete and it is intended to be substituted by revised return which according to assessee, is correct and complete. It is quite possible and natural that in submitting return and disclosing full particulars of income in return some bona fide omission or some wrong statement may have occurred. In order to obviate this possibility, legislature enacted s. 139(5) enabling assessee to furnish revised return. But to come under said provision, omission or wrong statement that might have occurred or crept in (i) must be bona fide and (ii) must have been discovered by assessee himself. If, however, omission or wrong statement is discovered by Department as result of enquiry thereafter revised return is furnished making amendments that will not amount to revised return as contemplated under s. 139(5). Sec. 139(5) is nothing more than to permit assessee when genuine omission or wrong statement is detected, to file revised return in time before assessment is made. This could only mean that right to file revised return may be exercised to cure omission or wrong statement when it was inadvertent or accidental and not deliberate. Such revised return does not save consequences of intentional filing of false or incorrect return. Where, in order to make good omission in originally filed return, assessee voluntarily furnishes revised return inclusive of so omitted income, question arises whether filing of revised return will not expatiate contumacious conduct, if any, on part of assessee in not having disclosed true income in originally filed return. Blameworthiness attached to assessee with reference to original return cannot be avoided by filing fresh return after concealment was detected by AO. Where revised return is made by assessee on his own volition before concealment was detected in course of assessment proceedings, conduct of assessee has to be taken note of. Sec. 139(5) applies only to cases of omission or wrong statement and not to cases of concealment or false statements. Thus s. 139(5) has application to limited category of cases, namely, where in original return there was omission or any wrong statement. very word "omission" denotes omission bona fide. Equally, words "wrong statement" will not take in "a statement known to be false to person who made statement". However, word "discovered" coming in s. 139(5) makes it clear that at time of discovering only person who has furnished return finds out that inadvertent omission or unintended wrong statement had crept in return filed by him. If person who filed return was aware of falsity of statement and incorrectness of particulars of income even at time when he filed original returns, there was no question of that person subsequently discovering existence of omission or creeping in of wrong statement in return already filed by him. In other words, return filed so as to include concealed income cannot be treated as revised return because omission to file correct income in original return cannot be said in such circumstances to be due to any bona fide mistake or omission. Onus is, therefore, on assessee to show that omission or wrong statement was discovered subsequent to filing of original return. This onus can be discharged with reference to material aspects to be brought on record by assessee. In instant case, few relevant dates are necessary to be noted. Original return was filed at income of Rs. 4,94,458 on 23rd Oct., 1 99 2. Notice under s. 143(2) was issued for first time on 12th Nov., 1 99 2 for 25th Nov., 1 99 2. assessee was required to submit details with respect to sales and purchases along with all relevant details. Thus enquiry was started by AO with regard to sale and purchase of assessee when he found that GP for year under consideration was very much low as compared to immediate preceding year. Thus AO started probe to verify sale and purchases recorded by assessee. Prior to year under consideration, assessee had never dealt in copper scraps. assessee purchased copper scraps only during month of January i.e. at fag end of relevant accounting year. purchases were also substantial i.e. above Rs. 8 lakhs. According to note furnished with revised return assessee was in need of funds, therefore, it sold copper scraps purchased by it by way of cash sales. If so was position, then it was very much required that assessee should have entered said cash received out of sales in books of account. This explanation of assessee is thus not substantiated and is contrary to facts as assessee did not enter cash received by it from sales despite there was necessity of funds. only inference which can be drawn from note given by assessee in revised return and subsequent explanation that assessee did not credit amount of sale of copper scraps in books of accounts to show lesser income in original return of income. This inference is further strengthened from fact that return of income of assessee is filed at Rs. 4,94,458 and amount not disclosed by assessee was almost double to said amount and that amount was not so small which could escape attention of assessee from being entered in books of account by inadvertent mistake or omission. 11. In view of above discussion of legal and factual position, we are of opinion that AO had rightly held assessee is liable for penalty of concealment despite having filed revised return and CIT(A) was wrong in deleting penalty. order of CIT(A) is, therefore, set aside. However, we find that penalty levied by AO is 200 per cent as against minimum penalty leviable @ 100 per cent. Keeping in view facts of present case, we find that levy of penalty @ 100 per cent will be justified. Therefore, we direct AO to reduce penalty to 100 per cent. appeal filed by Revenue is, therefore, partly allowed. *** DEPUTY COMMISSIONER OF INCOME TAX v. GREY CAST FOUNDRY WORKS