2004 (12) TMI 65 - HC - Income Tax

Penalty - Whether the tax would be chargeable on the income in which all the particulars have been concealed Assessee have shown loss in income and the Tribunal has held that in the case of loss even after concealment is added then also no tax will be leviable, therefore, the provisions of section 271(1)(c) of the Income-tax Act is not attracted - Tribunal has not committed any error in holding that no penalty can be imposed when the income is not assessed to income-tax under section 271(1)(c) Revenue s appeal has no merit and is dismissed summarily.

Summary

Issues:
Interpretation of Explanation 4 to section 271(1)(c) of the Income-tax Act, 1961 in relation to concealment of income and imposition of penalty.

Analysis:
The appellant argued that the Income-tax Appellate Tribunal failed to consider Explanation 4 to section 271(1)(c) of the Income-tax Act, which deals with the concealment of income. The appellant contended that under Explanation 4, if the concealed income exceeds the total income assessed, then tax would be chargeable on the concealed income. The main issue was whether tax should be levied on the entire concealed income or only on the portion that exceeds the total income assessed. The Tribunal, in this case, referred to a Supreme Court judgment and held that if there is a loss shown in income, even after adding the concealed amount, no tax would be leviable. Therefore, the Tribunal concluded that the provisions of section 271(1)(c) were not applicable in this scenario.

The High Court analyzed the situation and found that the appellant failed to establish that the assessee would be liable for income tax even after including the concealed income. The Court agreed with the Tribunal's decision that no penalty could be imposed if the income was not assessed for income tax under section 271(1)(c) of the Income-tax Act. The Court summarily dismissed the appeal, stating that no substantial question of law arose, and the appeal lacked merit.