2004 (10) TMI 54 - HC - Income Tax

Imposition of penalty under section 271(1)(c) Tribunal set aside the penalty holding, inter alia, that since the assessee filed revised returns, disclosing his income and the same was accepted by the Revenue, the disclosure does not amount to either concealment so as to attract the rigour of section 271(1)(c) - We concur with the finding so recorded by the Tribunal as it is based on exercise of discretion and the facts brought on record. We, thus, do not wish to interfere in such order based on discretionary exercise of power by the Tribunal. Revenue appeal dismissed

Summary

Issues:
- Appeal filed by the Revenue under section 260A of the Income-tax Act, 1961 against the order passed by the Income-tax Appellate Tribunal.
- Justification of penalties under section 271(1)(c) of the Act for revised returns filed after search and subsequent inquiries by the Department.
- Imposition of penalty under section 271(1)(c) on the assessee for assessment years 1985-86, 1986-87, and 1987-88.

Analysis:
The judgment concerns an appeal filed by the Revenue against a common order passed by the Income-tax Appellate Tribunal, which also governs other connected appeals. The substantial questions of law referred in the appeal revolve around the justification of penalties under section 271(1)(c) of the Income-tax Act. The Tribunal had set aside the penalty imposed by the Assessing Officer, stating that the revised returns filed by the assessee, disclosing additional income, were accepted by the Revenue, and thus did not amount to concealment under section 271(1)(c). The Tribunal exercised discretion in setting aside the penalty, which the High Court concurred with, declining to interfere in the matter.

The High Court noted that a previous appeal filed by the Revenue against the same impugned order had been dismissed by a Division Bench, affirming the Tribunal's decision. The dismissal of the earlier appeal without reasons was deemed binding on subsequent appeals, including the present ones. The court emphasized that the dismissal of one appeal from the same set of cases necessitates the disposal of all appeals similarly. The Revenue's argument that the earlier dismissal lacked reasoning was rejected, as the finality of the dismissal order, not appealed to the Supreme Court, bound the court.

Regarding the imposition of penalties for the assessment years 1985-86, 1986-87, and 1987-88, the Tribunal's decision to set aside the penalty was upheld by the High Court. The court highlighted that the Tribunal's discretion and factual findings supported the decision, leading to the dismissal of the appeal. Ultimately, the appeal filed by the Revenue was dismissed, with no order as to costs, based on the findings and conclusions drawn from the Tribunal's decision and the exercise of discretionary power.