JUDGMENT judgment of court was delivered by R. Sudhakar J.-The issue raised in this appeal relates to imposition of penalty under section 271(1)(c) of Income-tax Act, 1961, on appellant- assessee for furnishing inaccurate particulars of income. assessee, being engaged in business of leather chemical manufacture and trading, filed its return of income on October 30, 2002, admitting total loss of Rs. 1,47,72,551 for assessment year 2002-03. It was processed under section 143(1). Subsequently, case was selected for scrutiny under section 143(3) and notice under section 143(2) was issued to assessee. On scrutiny and discussion in respect of various issues like disallowance under section 43B, bad debts, prior period expenditure, disallowance of commission payment, royalty payment claimed in computation, compensation paid for premature termination of job work contract, non-competence fee and note on claim of depreciation on non-compete fees, revised total income was computed on March 28, 2005. Since issue in this appeal is specific only to disallowance of claim of royalty and not on other issues, we propose to extract relevant portions of both explanation of assessee dated March 14, 2005, and scrutiny assessment order dated March 28, 2005, of original authority, for better clarity on said issue, as follows: "Explanation dated March 14, 2005, of assessee 3. With respect to royalty, in assessment year 2002-03 amount of Rs. 1,12,29,927 was inadvertently claimed in computation as deduction of income. Order of original authority dated March 28, 2005 7. Royalty payment claimed in computation It is seen from computation of income that assessee in computation of income has claimed deduction of royalty of Rs. 3,14,45,154. It was explained to me that royalty is paid to M/s Bayer AG Germany under agreement. In case no TDS is paid during year same is added back at first instance and in computation it is claimed as deduction on basis of TDS payments. same is done as per provisions of section 40(a)(i) of Income-tax Act, 1961. assessee was asked to file full details of TDS payments made in respect of this royalty payments. After verifying these details it was noticed that some of TDS certificates pertain to earlier year and part of royalty payment attributable to these certificates has already been claimed and allowed as deduction to assessee in earlier years. When asked about this assessee, vide their letter dated March 14, 2005, admitted error and stated that in assessment year 2002-03 sum of Rs. 1,12,29,927 which has been already claimed in earlier year was again inadvertently claimed as deduction in computation of income. In view of above fact and on basis of admission made by assessee sum of Rs. 1,12,29,927 is added to assessee's total income. As assessee has made false claim of deduction penalty under section 271(1)(c) is separately initiated." Thereafter, on same day, notice was issued under section 271(1)(c) read with section 274 of Act for initiation of penalty proceedings. However, after completion of appeal proceedings on merits before Commissioner of Income-tax (Appeals) and Income-tax Appellate Tribunal, vide order of Tribunal dated March 14, 2008, assessee was heard by letter dated July 30, 2008, to show cause as to why penalty should not be levied for furnishing inaccurate particulars of income and assessee filed reply dated August 1, 2008, and relevant portion of pleading reads as follows: "2. Royalty payment wrongly claimed. amount was claimed inadvertently and letter to this effect was given to Department during assessment proceedings without being prompted or asked by Department. This was inadvertent error which was voluntarily withdrawn. Further, it is submitted that Explanation 4 to section 271(1)(c) stating that reduction of loss would also amount to concealment of income was brought into statute with effect from assessment year 2003-04 and, hence, even as per law no penalty under section 271(1)(c) can be levied for assessment year 2002-03." After hearing submissions of assessee on above pleas, original authority completed penalty proceedings under section 271(1)(c), by order dated October 23, 2008, holding as follows: "5. As regards disallowance of royalty payment of Rs. 1,12,29,927, assessee's submission that it had withdrawn wrong claim voluntarily is not correct. It was Assessing Officer who had called for TDS details, vide this office letter dated March 10, 2005, which was received by assessee's authorised representative on same day. Only upon receiving this letter, assessee vide its letter dated March 14, 2005, admitted mistake and agreed for addition. Hence, it was not voluntary as claimed by assessee. 6. Thirdly, Supreme Court, while dealing with provisions of Explanation 4 to section 271(1)(c), in case of Virtual Soft Systems Ltd v. CIT [2007] 289 ITR 83 (SC) has held that there should be positive income to levy penalty under section 271(1)(c) prior to April 1, 2003, in view of amendment brought in by Finance Act, 2002. However, in its subsequent decision, Supreme Court in case of CIT v. Gold Coin Health Food Pvt. Ltd. [2008] 304 ITR 308 (SC) has overruled its own decision in case of Virtual Soft Systems Ltd. v. CIT referred to supra. In referred case, Supreme Court has observed that'even during period between April, 1976, and April 1, 2003, position was that penalty was leviable even in case where addition of concealed income reduces returned loss', and held that said amendment is only clarificatory in nature and, therefore, applicable for assessment years prior to April 1, 2003, also. Hence, assessee's submission is not acceptable. 7. It is, therefore, clear that assessee had made wrong claim of Rs. 1,12,29,927 towards royalty payment which it knew, is not correct and thereby furnished inaccurate particulars of income. It is upheld by Supreme Court in case of CIT v. Gold Coin Health Food Pvt. Ltd. [2008] 304 ITR 308 (SC) that penalty is leviable even in case where addition of concealed income reduced returned loss even in case of assessment prior to April 1, 2003. 8. I, therefore, hold that assessee has suppressed income by making wrong claim of royalty payment of Rs. 1,12,29,927 which actually pertained to earlier assessment years which was claimed and allowed. Hence, it is fit case to levy penalty under section 271(1)(c) of Income-tax Act, 1961, for furnishing inaccurate particulars of income and tax on same works out to Rs. 40,09,083 and, accordingly, I levy minimum penalty of Rs. 40,09,083 being 100 per cent. of tax on concealed income of Rs. 1,12,29,927." Aggrieved by above order, assessee preferred appeal to Commissioner of Income-tax (Appeals) and by cryptic order, Commissioner of Income-tax (Appeals) allowed appeal holding that it was bona fide mistake and that assessee had admitted his mistake, there was no scope for levying penalty. Challenging said order, Department went before Tribunal and Tribunal, after detailed analysis of facts of present case and by taking note of decision of Supreme Court in MAK Data (P.) Ltd. v. CIT [2013] 358 ITR 593 (SC), came to clear conclusion that possibility of inadvertent mistake of this nature was remote and scope of passing entries in books of account twice was also remote, as assessee had claimed deduction for royalty expenses paid to M/s. Bayer AG Germany under agreement taking into account provisions of section 40(a)(ia) of Act. It also held that assessee had claimed deduction twice while filing return of income and error was unearthed during course of assessment proceedings under section 143(3) of Act on scrutiny by Assessing Officer, failing which error would not have surfaced leading to loss of revenue. It further held that since assessee did not take proper care to furnish accurate particulars of income, decision of Supreme Court relied upon by Revenue clearly justified levy of penalty and taking lenient view would encourage assessee to perpetuate such mistakes and, therefore levy of penalty amounting to Rs. 40,09,083 being 100 per cent. of tax on Rs. 1,12,29,927 for claiming deduction twice on ground of payment of royalty, was absolutely justified. Hence, present appeal has been filed by assessee. Heard learned counsel for appellant and learned standing counsel for respondent. counsel for respondent. learned counsel for appellant was at pains to point out that even at first instance Assessing Officer, under guise of scrutiny and assessment, called for certain details in letter dated March 10, 2005, for which reply was given on March 14, 2005, admitting mistake as inadvertent and when there was no mala fide intention on part of assessee to claim deduction twice for payment of royalty, there is no scope for levy of penalty under section 271(1)(c) of Act. In support of his submissions, learned counsel also relied upon decision of Division Bench of this court in CIT v. Gem Granites (Karnataka) [2014] 42 Taxmann.com 493 (Mad) and decision of Supreme Court in Price Waterhouse Coopers Pvt. Ltd. v. CIT [2012] 348 ITR 306 (SC). We have considered above submissions. So far as facts of present case are concerned, it is to be noticed that penalty has been imposed on account of disallowance of royalty payment, as same was claimed and allowed during preceding assessment year in respect of assessee. Tribunal, however, placed much reliance on decision of Supreme Court in MAK Data (P.) Ltd.'s case reported in [2013] 358 ITR 593, where assessee in that case offered to surrender certain amount received as share application money as its income from undisclosed source in assessment proceedings pursuant to survey operations and when penalty was sought to be imposed under section 271(1)(c) of Act, Supreme Court decided issue in favour of Revenue holding as follows, which has been extracted by Tribunal in paragraph 8.1 of its order, and we are inclined to reproduce same in this order: "The Assessing Officer, shall not be carried away by plea of assessee like'voluntary disclosure','buy peace','avoid litigation', 'amicable settlement', etc., to explain away its conduct. question is whether assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to section 271(1) raises presumption of concealment, when difference is noticed by Assessing Officer, between reported and assessed income. burden is then on assessee to show otherwise, by cogent and reliable evidence. When initial onus placed by Explanation, has been discharged by him, onus shifts on Revenue to show that amount in question constituted income and not otherwise. (paragraph 7) assessee has only stated that he had surrendered additional sum with view to avoid litigation, buy peace and to channelise energy and resources towards productive work and to make amicable settlement with Income-tax Department. Statute does not recognise those types of defences under Explanation 1 to section 271(1)(c) of Act. It is trite law that voluntary disclosure does not release assessee from mischief of penal proceedings under section 271(1)(c). law does not provide that when assessee makes voluntary disclosure of his concealed income, he has to be absolved from penalty. (paragraph 7) surrender of income on this case is not voluntary in sense that offer of surrender was made in view of detection made by Assessing Officer in search conducted in sister concern of assessee. In that situation, it cannot be said that surrender of income was voluntary. survey was conducted more than 10 months before assessee filed its return of income. Had it been intention of assessee to make full and true disclosure of its income, it would have filed return declaring income inclusive of amount which was surrendered later during course of assessment proceedings. Consequently, it is clear that assessee had no intention to declare its true income. It is statutory duty of assessee to record all its transactions in books of account, to explain source of payments made by it and to declare its true income in return of income filed by it from year to year. Assessing Officer has recorded categorical finding that he was satisfied that assessee had concealed true particulars of income and is liable for penalty proceedings under section 271(1)(c) read with section 274 (paragraph 9). Assessing Officer has to satisfy whether penalty proceedings be initiated or not during course of assessment proceedings and Assessing Officer is not required to record his satisfaction in particular manner or reduce it into writing (paragraph 10). In view of above, impugned penalty order passed by High Court deserved to be confirmed (paragraph 11)." Since issue relates to imposition of penalty under section 271(1)(c) of Act, said section reads as follows: "271.(1) If Assessing Officer or Commissioner (Appeals) or Commissioner in course of any proceedings under this Act, is satisfied that any person-... (c) has concealed particulars of his income or furnished inaccurate particulars of such income,... he may direct that such person shall pay by way of penalty,-... (iii) in cases referred to in clause (c)... in addition to tax, if any, payable by him, sum which shall not be less than, but which shall not exceed three times, amount of tax sought to be evaded by reason of concealment of particulars of his income... or furnishing of inaccurate particulars of such income..." Here is case where appellant-assessee had claimed deduction for royalty payment for second time, when it was in fact claimed in preceding assessment year and allowed, and said error of computation was unearthed during course of assessment proceedings under section 143(3) by original authority, for which notice was issued under section 143(2) and order of original authority dated March 28, 2005, as extracted in earlier portion of this order, clearly shows that when TDS certificates in respect of royalty paid to M/s. Bayer AG Germany was asked to be furnished, after verifying details, it was noticed that some of TDS certificates pertained to earlier year and part of royalty payment attributed to these certificates had already been claimed and allowed as deduction to assessee in earlier years. Thereafter, when assessee was further questioned, with cryptic reply by way of letter dated March 14, 2005, no cogent and reliable evidence were shown by assessee, as such huge amount could not have been claimed as deduction by inadvertence for second time. said plea has also been repelled by Supreme Court in MAK Data (P.) Ltd.'s case (supra), as assessee should first show by cogent and reliable evidence that there was neither concealment of particulars of income nor furnished inaccurate particulars of income. We find that plea taken by assessee in letter dated March 14, 2005, is only cursory and does not give any acceptable explanation for wrong computation, as error was detected by original authority only during proceedings under section 143(3) and she has also recorded categorical finding that assessee suppressed income by making wrong claim of royalty payment, which actually pertained to earlier assessment years, which was claimed and allowed and, therefore, thought it fit to levy penalty under section 271(1)(c) of Act. decision of Supreme Court in Price Waterhouse Coopers Private Ltd.'s case (supra) is distinguishable on facts of present case, as we find that Supreme Court in that case held that tax audit report did not suggest concealment of income and on that basis finding was given that assessee did not furnish inaccurate particulars because in tax audit report filed along with return, it was unequivocally stated that provision for payment was not allowable under section 40A(7) of Act. Supreme Court also held that neither assessee in that case noticed error nor was it noticed by Assessing Officer who framed assessment order. Therefore, they came to hold that when contents of tax audit report were overlooked by all persons concerned, it was clear case of bona fide and inadvertent error and in that circumstance, penalty order was set aside. Hence, said decision is of no avail to assessee in this case. decision of Division Bench of this court in Gem Granites' case (supra) will also not enure to benefit of assessee in this case, as we find in that case that when explanation on differential amount was given by assessee therein that entries were made in account and that accountant did not make correct entry, said explanation was accepted by accountant did not make correct entry, said explanation was accepted by fact finding authority and, therefore, court thought it fit not to interfere. It merely went on premise that some explanation was offered and since initial onus had been discharged, Revenue had to show that there was concealment of particulars of income or must have furnished inaccurate particulars of income. For such conclusion, Division Bench, however, while placing reliance on decisions of Supreme Court in Union of India v. Rajasthan Spinning and Weaving Mills [2009] 13 SCC 448; [2010] 1 GSTR 66 (SC), Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 and in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158, did not distinguish facts of either of cases to hold that it was not case of concealment of particulars of income or assessee did not furnish inaccurate particulars of income. Division Bench did not choose to go into merits of that issue because explanation given by assessee therein was accepted by Tribunal. We are not inclined to be guided by decision in Gem Granites case, as facts in present case are clearly distinguishable because huge amount had been claimed during preceding assessment year based on TDS certificates and when such of those documents were sought to be verified by original authority in scrutiny assessment in respect of various issues, one relating to royalty payment was also verified on basis of TDS certificates and wrong computation was unearthed as has been pointed out by us in earlier portion of this order. In our view, Department was justified in imposing penalty under section 271(1)(c) of Act, as explanation offered by assessee is no explanation at all in eye of law. We also find that facts of present case have been thoroughly examined by Tribunal and has rightly held against assessee. Therefore, we find no question of law, much less substantial question of law arising for consideration on merits in this appeal. Accordingly, tax case appeal fails and it is dismissed. No costs. *** Lanxess India Pvt. Ltd. v. Assistant Commissioner of Income-tax