2004 (1) TMI 26 - HC - Income Tax

Immunity from the imposition of penalty - assessee had made clear that the surrender under section 132(4) in respect of the amount was being made with a view to buy peace and subject to the condition that no penal provision would be invoked against the assessee - Commissioner of Income-tax (Appeals) held that the assessee was entitled to immunity from the imposition of penalty read with the Explanations 1 and 5 to section 271 - assessee has made disclosure without any specific detection of concealed income and it is a well-settled law that if disclosure is made before detection of concealment, it may not attract penalty under section 271(1)(c) - Considering these aspects, the Tribunal has confirmed the order made by the appellate authority. Therefore, in our opinion, no question of law arises in this matter. Hence, this revenue s appeal is dismissed.

Summary

Issues Involved:
- Appeal against order by Income-tax Appellate Tribunal
- Confirmation of order by Commissioner of Income-tax (Appeals)
- Surrender under section 132(4) for assessment year 1986-87
- Immunity from penalty under section 271 of the Income-tax Act
- Disclosure before detection of concealed income
- Dismissal of appeal

Analysis:

The High Court of Delhi heard an appeal by the Revenue against the decision of the Income-tax Appellate Tribunal, which upheld the order made by the Commissioner of Income-tax (Appeals) for the assessment year 1986-87. The Tribunal, after considering the provisions and evidence, affirmed the Commissioner's decision. The assessee had voluntarily surrendered an amount under section 132(4) with the condition of no penal provision being invoked. The Commissioner, invoking Explanations 1 and 5 to section 271 of the Income-tax Act, granted immunity from penalty, stating that if disclosure is made before detection of concealment, it may not attract penalty under section 271(1)(c) of the Act.

The Commissioner thoroughly examined the case, including the circumstances of the disclosure, and concluded that the assessee was entitled to immunity from penalty. The Tribunal, in alignment with the Commissioner's findings, affirmed the decision. The High Court concurred with this analysis, stating that no question of law arose in the matter, leading to the dismissal of the appeal.

The Revenue contended that the Assessing Officer's decision should have been final and not subject to review by the Commissioner or the Tribunal. However, the High Court found no merit in this argument, upholding the decisions made by the lower authorities based on the provisions of the Income-tax Act.